Why choosing the right executor is importantWhen making a will a person must decide who their executor will be. An executor is the person in the will who will distribute the estate as per the terms of the will. An executor has an important job and must be someone who can be trusted to be impartial. This decision is even harder when a person is a part of a blended family as in some circumstances it is not appropriate to appoint a family member. It is recommended that to alleviate confusion and potential conflicts within the family a professional executor is appointed. This process is arranged when creating a will.
Why a simple will is not appropriateA standard will between a married couple usually states that the surviving partner will inherit all assets and upon the death of the surviving partner the children will then receive the assets. This therefore may not be appropriate in the case of blended families as children may not receive their inheritance when their biological parent dies, as they must wait until their stepparent dies. A way to avoid this issue is to create a testamentary trust. A testamentary trust is a trust that is created by a will. A testamentary trust ensures that the inheritance reaches the intended beneficiaries. The terms of the trust are outlined in the will. This means there can be restrictions on certain beneficiaries such as when and how they get access to the estate funds. This may allow the will maker to have control of their assets after they have passed away. When making a testamentary trust it is important to consider who the trustee will be, as they will hold the key to the administration of the trust. It may be that you allow the beneficiaries to be the trustees or for a managerial trustee to be engaged. This decision needs to be given careful consideration when drafting your will.
Understanding how assets are ownedWhen deciding what assets are to be given to beneficiaries, the first step is to understand how the assets are owned. For example, a property can be owned solely, as joint tenants or tenants in common. It is important to understand the difference in these types of ownership as this can affect how assets are distributed.
Joint proprietorsBy owning a property with a partner as joint tenants, the ownership of the property will automatically pass to the survivor upon the death of one partner. This may not be the ideal scenario in the case of blended families. It may be more appropriate to own a property as tenants in common. This allows for the deceased’s share in the property to be included and distributed as per the terms of the will.
Life interestsAnother option that can be exercised when creating a will is to create a life interest. This may be considered when a couple owns a property as tenants in common and want to leave each of their shares in the property to their own children. By creating a life interest, the surviving partner can live in the property and treat the property as their own until death or at another time stipulated. After this time has elapsed or the partner has died, the life interest ceases, and the property can be distributed as per the terms of the will.
ConclusionIf you are planning to draft a will, please speak to Grant Mackenzie or Will Elder at Phillips and Wilkins. They will be able to provide you with advice regarding drafting a will and how to best provide for your loved ones.
Grant has been a partner at Phillips & Wilkins since 1990 having joined the firm in 1983. He is a member of the Law Institute of Victoria Elder Law Committee. Learn more about Grant's legal experience.