6 Common Mistakes People Make When Writing Their Wills in NSW

A will is a legally binding written document that specifies how a person’s possessions and property will be divided and distributed among beneficiaries upon their demise. It is an important part of estate planning and can provide peace of mind to both the person creating the will and their loved ones. According to Empower Law Group, many people make common mistakes when writing their wills in NSW that can result in unintended consequences or legal challenges. In this article, we will discuss the 6 most common mistakes people make when writing their wills in NSW and how to avoid them.

1. Not Seeking Professional Advice

One of the biggest mistakes people make when writing their wills in NSW is not seeking professional advice. While it may be tempting to try to save money by writing your own will or using a free online template, this can lead to significant problems down the line. A poorly drafted will may be challenged in court, resulting in expensive and time-consuming litigation. It may also fail to achieve the desired outcomes or create unintended tax consequences.

To avoid these issues, it is essential to seek professional advice from an experienced NSW estate planning lawyer. A qualified lawyer can help you understand the legal requirements for creating a valid will, advise you on the best way to structure your will to achieve your goals, and ensure that your will is legally binding and enforceable.

2. Failing to Update Your Will

Another common mistake people make when writing their wills is failing to update them regularly. Your circumstances and wishes may change over time, and it is essential to update your will to reflect these changes. For example, you may get married, divorced, have children, or acquire new assets that need to be included in your will.

Failing to update your will can result in unintended consequences, such as leaving assets to the wrong people or leaving out important beneficiaries. It may also result in legal challenges that could have been avoided with proper planning.

To avoid these issues, it is essential to review your will regularly and update it as needed. A good rule of thumb is to review your will every 3-5 years or after major life events.

3. Not Understanding NSW Inheritance Laws

Another common mistake people make when writing their wills in NSW is not understanding the state’s inheritance laws. In NSW, the law provides certain rights to spouses, children, and other close relatives, which may affect how your assets are distributed. For example, if you have a spouse and children, your spouse will be entitled to a share of your estate, regardless of the provisions in your will.

It is essential to understand these laws and how they may impact your estate planning goals. An experienced NSW estate planning lawyer can help you navigate these laws and create a will that meets your needs while ensuring compliance with the state’s inheritance laws.

4. Failing to Consider Tax Implications

Another common mistake people make when writing their wills in NSW is failing to consider tax implications. Inheritance tax, also known as estate tax or death tax, is a tax levied on the assets of a deceased person. In NSW, there is no inheritance tax, but there are other taxes that may apply, such as capital gains tax or stamp duty.

Failing to consider these tax implications can result in unintended tax consequences for your beneficiaries or the estate. It may also result in missed opportunities to minimise taxes through effective estate planning strategies.

5. Failing to Appoint a Guardian

Failing to appoint a guardian for minor children is another common mistake people make when writing their wills in NSW. If you have children who are under the age of 18, it is important to appoint a guardian in your will to ensure that they are cared for if something happens to you and your spouse or partner. If you fail to appoint a guardian, the court will be left to decide who will take care of your children, which may not be in line with your wishes or values.

6. Not Providing for Contingencies in Your Will

When writing a will in NSW, it is important to consider what will happen if your initial plans do not work out as intended. Failure to include contingencies in your will can lead to unintended consequences or legal challenges down the line. Here are a few common contingencies you may want to consider when drafting your will.

What Happens If Your Beneficiary Predeceases You?

One common contingency to consider is what will happen if one of your beneficiaries predeceases you. If you do not have a contingency plan in place, their share of your estate may pass to their own heirs, which may not be in line with your wishes.

To avoid this issue, you may want to include a provision in your will that outlines what will happen if a beneficiary predeceases you. For example, you could state that their share of your estate will pass to another beneficiary or be divided equally among your surviving beneficiaries.

What Happens if Your Executor is Unable or Unwilling to Serve?

Another important contingency to consider is what will happen if your chosen executor is unable or unwilling to serve. Your executor is responsible for carrying out the instructions in your will, so it is important to have a backup plan in case they are unable to fulfil their duties.

To address this issue, you may want to name an alternate executor in your will who can step in if your primary executor is unable to serve. Alternatively, you could name a professional executor, such as a solicitor or accountant, who can take over if necessary.

What Happens if Your Estate is Insolvent?

Another important contingency to consider is what will happen if your estate is insolvent, meaning that your debts exceed your assets. If you do not have a contingency plan in place, your beneficiaries may not receive the assets you intended to leave them.

To address this issue, you may want to include a provision in your will that outlines how your debts will be paid off and how your remaining assets will be distributed. You may also want to consider purchasing life insurance or other forms of protection to ensure that your beneficiaries are not left with debts they cannot afford to pay.

What Happens if Your Beneficiaries Cannot be Located?

Finally, you may want to consider what will happen if one of your beneficiaries cannot be located. If a beneficiary is missing or cannot be found, their share of your estate may be left in limbo, which can create legal challenges and delays.

To address this issue, you may want to include a provision in your will that outlines what will happen if a beneficiary cannot be located. For example, you could state that their share of your estate will be held in trust until they can be located, or that it will be distributed to another beneficiary or charity if they cannot be found within a certain period of time.

The Key Takeaways

Writing a will is an important step in ensuring that your wishes are carried out after you pass away. However, it is crucial to avoid common mistakes, such as failing to include contingencies in your will. By considering potential scenarios where your initial plans may not work out as intended, you can ensure that your beneficiaries are taken care of and that your estate is distributed in line with your wishes.

Remember to be specific in your will, include digital assets, choose the right executor, and store your will properly. In addition, consider contingencies such as what happens if a beneficiary predeceases you, if your executor is unable or unwilling to serve, if your estate is insolvent, or if your beneficiaries cannot be located. By taking the time to address these issues, you can avoid legal challenges and ensure that your wishes are carried out in a timely and efficient manner.