Is Your Will Valid?
Do you have a valid will? Having a valid will is the best way to make sure your assets are protected in case you pass away. Most people don’t know that if you die without one, the state government in which you live will determine how your estate is divided up.
Dying ‘intestate’ – the legal term for dying without a valid will – could mean that you don’t get to choose which people inherit your estate, particularly if they are not directly related to you. But most importantly, it could mean that large assets like your home and other property do not go to the people you want to take care of the most after you’ve gone. With a valid will, you can give two essential pieces of information to your loved ones like who receives the assets, money possession as well as who is in charge of managing the estate. Here's exactly what a valid will represents.
What is a valid will?
A will is a legal document that clearly sets out your wishes for the distribution of your assets after your death. In order for it to be valid, your will needs to comply with certain legal criteria. For example, you must be over the age of 18 and of sound mind to make a will, it must be in writing, it must be signed by you and witnessed by two people who are not beneficiaries of the will and you must have ‘testamentary capacity’.
Testamentary capacity means that you must be fully aware of the extent of your debts and assets and the will must take into consideration all the people who would normally be expected to benefit from your estate. Because of these requirements, it is advisable to seek legal advice when preparing your will, as you may require professional guidance on everything that must be included.
For your will to remain valid, it needs to be kept fully up to date with your current circumstances, so you should update your will every five years and every time your family or financial situation changes. For example, your family situation may change if you get divorced, remarry or your children get married, or if you have a new grandchild. Your financial situation may change if you become unemployed or retire, purchase a new property, change your investments, incur additional debts or the value of your estate increases or decreases for any reason. By working with Brisbane Wills and Estates they ensure that it's al legal and valid, so as long as you keep them updated with any changes to your situation you'll have nothing to worry about.
What happens to your home loan if you die?
Unfortunately, your debts do not disappear when you pass away. The person who inherits your property will also inherit your mortgage repayments. What’s more, in the event of your death, the lender has the right to demand repayment of the loan in full from this beneficiary, which may mean the property will have to be sold off quickly to repay the debt.
In order to ensure that your beneficiaries are not left struggling to pay off your home loan or other debts, we recommend that you consider Life Insurance or perhaps, Mortgage Protection Insurance. We can provide you with cost-effective insurance options, so talk to us if you need help.
How do you prepare your will?
You can prepare your own will by obtaining a legal will kit from any Australia Post Office. However unless your family and financial situation is very straight forward, we recommend that you seek professional legal advice to ensure your will is legally sound and cannot be contested in court. If your will is not legally sound, the court can overturn it and divide your assets as they see fit.
If you do not currently have a valid will, consider talking to our Wills and Estate Planning team. As mentioned earlier, we can also help you to arrange suitable insurance options through our Mortgage & Finance team so that your loved ones are not left struggling to repay your home loan or other debts after you go.