Wills, Intestacies, Estates and Funerals

Wills

The Need for a Will

Generally wills have to be in writing and properly signed and witnessed in the precise way laid down in the statute in order to be valid. A will is a document in which the testator directs how her or his property is to be divided and whom it is to go to. The testator also directs in the will who is to be her or his executor. A will can appoint a testamentary guardian to care for minor children. A will can be used to create a trust.

Every adult person over the age of 18 should have a will. (The Wills Act s 8A gives the Supreme Court power to enable a minor (a person under the age of 18) to make a will. There are a number of reasons for having a well-drafted up-to-date will:

• to avoid the hardship caused to the family if they have to search for a will, or for distant relatives (next of kin), after the testator's death;
• to appoint the executors of your choice. If no executor is appointed then the court has to decide who will administer the estate. This is an inconvenient process and is more expensive than simply appointing an executor in your will;
• to appoint a guardian of your minor children (that is, those of your children who are under 18 years old at your death);
• to avoid having your estate divided according to the law of intestacy. If you don't have a will then your estate is distributed according to the intestacy law: the law will decide according to a set pattern who will receive your property. The intestacy rules are set out in the Administration and Probate Act Part 3A. The intestacy rules, which differ for each State or Territory, may not accord with your wishes;
• to choose who is to get your property and in what proportions. You cannot make a specific gift to take effect on death without a will. Taxation problems, and uncertainty are reduced to a minimum; and
• to avoid the additional cost and inconvenience of obtaining letters of Administration as opposed to a grant of Probate.

You will have to pay to have a solicitor draft a will for you, but the money you spend you should regard as well spent. It is a gift to your family, and one which will be greatly appreciated. Many families have experienced the misery caused by a testator who has left a badly drawn home made will, or who has perhaps left no will at all. Either can cause great unhappiness to the family.

Making a Will

Any person who is 18 years old or older (or, even if he or she is under 18 years old, if he or she is married or making a will in contemplation of marriage), may make a valid will. With Supreme Court permission, a minor can make a will: Wills Act s 8A.

A married person, or unmarried partner, can make a will without the knowledge of her or his spouse or partner. It is important for a person under pressure from a spouse or partner to know this fact, and for the solicitor drafting the will to ensure that a person making a will is advised that a will can be made without the knowledge of the spouse or partner. This is particularly important if the will is being made in the presence of the testator's spouse or partner. A person can also alter their will without the knowledge or permission of their spouse or partner.

The law requires that a person who wishes to make a will must have the mental capacity to do so. The tests for capacity were laid down in a famous case called Banks v Goodfellow (1870). The tests for capacity established in that case are:

• the testator must understand the nature of the act of making a will;
• the testator must understand the extent of the property he or she is disposing of;
• the testator must understand and appreciate the claims that those close to the testator have on him or her; and
• there must be no disorder of the mind which distorts his or her testamentary gifts.

A person who has suffered a stroke and is unable to speak may still satisfy these tests and be capable of making a will. Such a person should be encouraged to consult a lawyer and to make a will if this is what they want to do; it is cruel to discourage them. But such a person should NOT be pressured to make a will, or put under any pressure at all to include any particular provisions in a will they are making. Like everyone else, they must be completely free to make or not to make their own will. If a major beneficiary is present while instructions are being taken by the solicitor, the finger of suspicion may later point at the beneficiary, who may lose her or his benefit.

Should you make your own will?

IT IS NOT A GOOD IDEA TO MAKE YOUR OWN WILL.

The cheapest way to make a will is to buy a will form from a stationers or to buy a will kit. The trouble with these will forms and kits is that they often cause great unhappiness to the family. It is very difficult to know what the legal meaning of the words used by a lay testator is. Even the simplest words turn out to be ambiguous. It is very expensive to get a will interpreted by the court. Interpreting a will has to be done by the Supreme Court, since magistrates have no jurisdiction to interpret wills. This means that, because of costs, many doubtful wills are never resolved, and resentments remain in the family for generations thereafter. If the parties do get the Supreme Court to resolve the difficulties of interpretation, the expenses will constitute a large and unwelcome deduction, usually from the estate.

Get your will professionally drafted

A professionally drawn will is an essential for a person who cares about her or his family. A home-made will is likely to cause severe and expensive difficulties and delays for the family, and is definitely a false economy.

A professional will drafter is aware of the traps in drafting a will -- for instance, is a bequest of property which happens to be mortgaged to be given subject to, or free of, the mortgage? A professional will drafter will also be able to look at the wider issues generally known as estate planning to advise on whether one's affairs could be organised to better advantage. A professional will drafter is able to avoid Capital Gains Tax pitfalls. If you have a will professionally drafted, the savings in subsequent legal costs for the family are likely to outweigh by far the initial cost.

There are three classes of professional will drafters -- solicitors, the Public Trustee and trustee companies.

A. Drafting by a solicitor

The first possibility is to engage a knowledgeable solicitor to prepare your will. A good solicitor will advise you on the choice of executors and trustees (executors are normally also named in the will as trustees, even if the will does not expressly set up a trust.) If your major beneficiaries are of full age and capacity, it is common practice to appoint some or all of them as your executors. This gives the named executors the opportunity to decide when the time comes whether to administer the estate themselves, or to entrust the administration of the estate to a professional person selected by the lay executors to do the administration of the estate at the time when it has to be done.

If the major beneficiaries are minor children, some close members of the family or friends can be appointed as executors and trustees, but in this case the choice of executors and trustees is difficult and not without risk (the family members or friends may prove not to be up to the task), and it may be better to appoint a professional such as the Public Trustee or a trustee company as executor and trustee. It is not usual to appoint your solicitor as executor or trustee (see Choice of executors and trustees).

Solicitors' charges vary, but a common figure might be around $600.00 for a straightforward will. Two corresponding wills say of husband and wife can be prepared for not much more than the price of one will.

B. Drafting by the Public Trustee

The second alternative is to get the Public Trustee to prepare the will. The Public Trustee will do a well-drawn will at very little cost, but the Public Trustee insists on being named in the will as the executor and trustee. (See Choice of executors and trustees). The work done by the Public Trustee is of high quality, and the services offered are valuable, Consult the website, www.publictrustee.act.gov.au, and for more detail see Choice of executors and trustees at E. Public Trustee as executor and trustee and Contacts and Links.

C. Drafting by a trustee company

The third alternative is to get a trustee company to prepare the will. Some trustee companies will do a will for free. Again trustee companies require to be named as executor and trustee. their charges for performing the duties of executor and of trustee are likely to be substantial.

Revising your will

Bear in mind that your circumstances are likely to change with the passing of time and therefore you should review your will if there are subsequent births or deaths or marriages or divorces in the family, or if you dispose of any property which you have mentioned in your will. In any event a will should be reviewed regularly. You should read the copy of your will which you keep at home every two or three years, or when some major change in your circumstances occurs.

Some wills cannot be drafted to work well far into the future. This is particularly true if the testator is a member of a blended family, and provision has to be made in the will for the testator's children from a previous relationship: such wills can only be drafted for the situation as it now is, and as the situation changes the will goes out of date and must be reconsidered. Such wills must be reviewed at frequent intervals. See also Automatic revocation by marriage; effect of divorce.

Validity of a will

A. Formal requirements

Before signing a will the testator must fully understand all the provisions of the will and be satisfied that it accurately reflects his or her testamentary intentions. In the ACT the formalities are set out in the Wills Act ss 9, 10. The Supreme Court in the ACT has a power to admit to probate a will which does not comply with the formalities if the court is satisfied that the document was intended to be the will of the testator -- Wills Act s 11A.

B. The signing ceremony

(i) witnesses

(a) you must have two witnesses;

(b) the witnesses should both be over the age of 18 years;

(c) a witness should not be the husband or wife of a beneficiary or engaged to marry a beneficiary; and

(d) witnesses in the ACT must sign in the presence of each other as well as in the presence of the testator.

Note that beneficiaries who sign wills are no longer excluded from inheriting under the will: Wills Act s 15. This alters the old rule.

(ii) signing the will

(a) You as testator should read your will through very carefully to be sure that every page is there and that the will is correct in every detail.

(b) You and your witnesses should all use the same pen.

(c) The pen may be either biro or ink. It may be a blue pen. Do not use any type of pen which can be erased.

(d) You and your witnesses must all be present during the entire process of signing and all persons present must watch each signature being written.

(e) You do not have to tell your witnesses the contents of the will.

(f) Be absolutely sure that you sign your own will and that each page is a page of your own will and not that of another person.

(g) Make sure that you date the will.

(h) Using your normal signature sign the will at the end of the will. The testator must be the first to sign.

(i) The first witness must then sign at the end of the will near the testator's signature and add the witness's full name, occupation and address. Then the second witness must sign alongside the signature of the first witness in the space provided and add his or her full name, occupation and address.

(j) The testator must then sign using his or her normal signature at the bottom of each of the other pages of the will, and then each witness should sign, using normal signatures at the bottom of each of the other pages of the will, near the signature of the testator.

(k) If any alterations have been made to the will those alterations must be signed by the testator and both of the witnesses in the margin near the alterations in the same manner as the will itself is signed and witnessed.

Section 11A of the Wills Act enables the Supreme Court to hold that a document is a valid will even where it is not executed with the required formalities, if the court is satisfied that the testator intended the document to be his or her will. The process is expensive and time-consuming, and no-one would willingly make an informal will relying on the executors and beneficiaries to apply to the Supreme Court afterwards to uphold it.

Because informal documents may be admitted to proof as wills in the ACT and some of the States, it is important not to create doubtful documents which look as if they might be intended to be wills.

Foreign wills and wills made out of State

Wills made in other States or Territories or overseas will be accepted in the ACT if they are valid according to the law of the jurisdiction where they were made: Wills Act Part 2A.

What you can Put Into your Will

Both spouses dying together

In general where a beneficiary dies before the testator or testatrix, the gift lapses and is of no effect. If the beneficiary survives the testator even by a very short time (even as short as a minute) the beneficiary inherits from the testator in that time. Where it is uncertain who died first there is a statute (Administration and Probate Act s 49P) which deals with the situation and ensures that the gift does not fail completely. It is therefore not necessary to deal with the situation of the two spouses dying simultaneously.

If a gift is made by will to a child or children of the testator and one of those children dies before the testator leaving a child or children who survive the testator by a period of not less than 30 days, the gift to the child who died before the testator does not lapse, but passes to the descendants of the deceased child: Wills Act s 31.

Disposal of the body

If you have strong views about the disposal of your body you should make those views known to your executors and close family members during your lifetime, say, by letter. There is a danger in putting those views in your will because the will may not be found until a week or so after you have died and by then the wrong thing has been done. If you wish to make your body available for medical research you should also consult with the hospital concerned about the best way of making sure that your wishes are carried out. This matter is discussed in more detail at Arranging the Funeral and The Use of the Body or Organs for Scientific or Medical Purposes.

Gifts

Gifts can be of various kinds. The basic principle is to keep the gifts simple, fair and general. For example, "I give my whole estate to be divided equally between those of my children who survive me" is much safer than an unequal division between children; it is also greatly to be preferred to a list of bequests of specific assets. In fact, only a minority of wills contain any specific gifts of particular assets.

Where a testator wants to provide for a person with a disability, or the testator wants to make a gift but wants to protect the subject matter of the gift from the beneficiary (who may be an alcoholic or a bankruptcy risk) the will can contain more complex provisions such as protective or discretionary trusts. A trust or a life estate can also be used to keep property in the family, particularly if the beneficiary is, say, married to a person who will put undue pressure on the beneficiary to hand over the property.

Trusts and life estates usually cause much more trouble than they are worth, and they impose considerable continuing administration expenses on the estate. However, they have their uses, and occasionally they are really needed.

Where long-term provisions are contained in the will the choice of trustees is difficult: see Choice of executors and trustees.

Choice of executors and trustees

A. Executors generally

The choice of executors and trustees is interwoven with the tasks they perform. The persons appointed as executors are almost always also appointed as trustees as well, so that, for example, as trustees they have the long term task of protecting and managing the estate assets for the benefit of the testator's young children until they come of age. In this note when we use the word "executors" we mean "executors and trustees".

It is important to note that no-one who is appointed executor is under any legal obligation to accept the appointment, even if they have told the testator that they would. Appointing as executor a person who does not benefit from the will places a considerable burden on that person, and if you are thinking of appointing as executor someone who is not a beneficiary, you should talk to that person, and see if they really are prepared to, and capable of, taking the responsibility.

No natural person who is appointed executor need actually do the technical or professional work of administering the estate. It is always open to an executor to get a solicitor, trustee company or the Public Trustee (see Glossary of Legal Words Used, under "Public Trustee") to do all or any of the work of administering the estate, and indeed, this is the usual thing to do. Only a minority of lay executors actually do the work of administration themselves. By appointing lay executors you are leaving it open to them -- indeed, inviting them -- to shop around for a professional to do the work of administration, but leaving the final decision-making responsibility -- overseeing the work of administration -- to the appointed executors themselves. For example, it is common to have the solicitors deal with transfer of real property, but the lay executor will often deal with government bodies who need to be advised of the death of the deceased (like Medicare) and divide up the personal effects of the deceased such as jewellery and household goods according to the provisions of the will and the wishes of the family.

Where there are longer term trusts as well as the shorter term task of administering the estate, the appointed executors may decide to do give the work of trustees to a professional trustee, such as the Public Trustee: see Choice of executors and trustees at E. Public Trustee as executor and trustee.

If the executors are to be natural persons, there should always be at least two. Indeed, two is the best number, as it could be disastrous if the sole executor dies before completing the administration. Having more than two executors may prove to be inconvenient.

There is no objection to appointing as executor of a will a person who is also a beneficiary under it. Indeed, in most cases, particularly in the case of corresponding wills between domestic partners such as a husband and wife, this is the usual thing to do. Each gives the whole estate to the other, and appoints the other as executor. Again, where the estate is given to the testator's children, it is usual to appoint the children, or say two of the children, as the executors (assuming that the children are adults). For long term trusts it may be appropriate to appoint family members as executors and other, independent, trustees because of the possibility of conflict of interest between the trustee and the beneficiaries of the trust -- the Public Trustee could be a good choice, at least as a co-trustee to work with the individual trustee or trustees if family members are chosen for this task. The Public Trustee is a salaried public servant who is impartial, professional and experienced, and the Public Trustee's office has a high reputation in the community. Trustee companies can also be considered at this point: see Choice of executors and trustees at E. Public Trustee as executor and trustee.

If there is no suitable family member for executor, or if it is likely that the only available family members are likely to disagree, then you should consider appointing the Public Trustee as your executor.

Even if your beneficiaries are adults you should probably not appoint them as your executors if they are likely to disagree seriously, or if the nature of the estate or the demands imposed by the will are likely to cause the executors undue responsibility or stress. In this case too you might consider appointing the Public Trustee as executor. If you are considering having your will made by the Public Trustee, discuss your wishes and anxieties with her or him at the time, and get reassurance that as your executor the Public Trustee will carry out your wishes sensitively and appropriately. If there is a house in the estate, will it be sold, or will it be preserved and let for the children to have when they grow up?

Where there is a need for a long term provisions such as life estates or trusts, or where there are no suitable close family members to act as executors, it may be useful to appoint a professional such as the Public Trustee, or in certain cases, a trustee company as executor or trustee. The question of cost to the estate, as well as the advantages and disadvantages to the estate, should be discussed with the Public Trustee or the trustee company as the case may be.

There is always a risk in appointing lay trustees (such as family members without legal training), for instance where property has to be held for minors, as laypeople often do not keep proper accounts, and the family environment makes it impossible or embarrassing for the beneficiaries to challenge the actions of the lay trustee (who is perhaps their uncle or aunt) later. Some lay executors even refuse (quite improperly) to show the will to members of the family who ask to see it. There is a considerable risk in appointing as a trustee a person whose interests will conflict with those of the trust beneficiary, for instance, it would be unwise to appoint the beneficiary of the residue as trustee of a trust for another family member, and then provide that on the termination of the trust the remaining trust funds are to fall into residue -- the trustee's interest in preserving the trust fund for his or her own eventual benefit would conflict with his or her duty to apply the trust funds for the benefit of the trust beneficiary.

Being executor is onerous and thankless, so you should not be keen to appoint a family friend who will take no benefit under the will. In this case a legacy to the family friend to compensate him or her for time or trouble would be in order. While appointing lay executors (whether they are beneficiaries or not) gives them the power to choose an appropriate professional person to do the work of administration and of trustee when the time comes, the risks are that the lay executors may decide to do the work themselves and do it very inefficiently, or they may get into disagreements with other interested persons. On the other hand, many a lay executor does a competent job of administering a deceased estate; usually, but not always, with professional help.

It is not usually a good idea to appoint your solicitor as your executor. He or she may leave the firm, move interstate or retire from practice -- or the firm may amalgamate or divide.

An executor who lives outside the ACT may obtain a grant of probate in the ACT if certain conditions are met.

B. Executors where there are minor children

If the children are young then the choice of executor is sensitive and difficult (an executor cannot act as executor until reaching the age of 18 years.) If there is an obvious family member who can look after the money safely and effectively for the children, (or can supervise a solicitor or some other professional person such as the Public Trustee who is managing the money) then that family member can be one of the executors. The other executor would probably be another family member, the assumption being that the two family members will get on well with each other and cooperate well. It is not generally a good idea to appoint a husband and wife as joint executors (or, for that matter, as joint guardians), as the marriage might break down, and then cooperation between the two is likely to be at an end.

One of the two family members you choose as executors might well be suitable to be appointed as the guardian of the minor children (it is not generally appropriate to appoint joint guardians). It is common for the children to be under the care and control of the person appointed as guardian, though this is not legally necessary, as it is perfectly possible for guardianship and care and control to be separated.

C. Executor's powers and minor children

Particularly where there is a possibility that minor beneficiaries will survive the testator, the executor's powers should include adequate powers to administer the estate and to invest it as well as powers to maintain, educate, benefit and advance the children until they reach 18 when they will be old enough to come into their inheritance.

D. Long term administration: trusts, life estates, minor beneficiaries, large estates

The position of the life tenant of an estate consisting of fixed interest investments may not be pleasant. However, it may be preferable to that of the life tenant of or minor ben­eficiary entitled to share in an estate invested in shares or debentures of companies which have provided the more spectacular crashes of the last few decades. Unless the testator is able to appoint executors of financial knowledge and discretion, the expansion of the investment powers creates a risk.

Where a life interest, trust or conditional gift is created, or where minor beneficiaries have to be cared for, it may be important to choose a disinterested, impartial trustee. The choice can be very difficult. Where a continuing trust is created, the choice of trustees will depend particularly on the type and purpose of the trust, the length of time for which it is to endure, as well as the complexity and nature of the portfolio of assets.

An institutional trustee with appropriate experience and expertise such as the Public Trustee or a trustee company may be a solution. The Public Trustee and trustee companies have experience and expertise, and will often be a better choice than an individual trustee, or, worse still, an inexperienced lay trustee.

Consult with the Public Trustee or trustee company before making the appointment in the will, and, with the consent of the testator, discuss the will as drafted with the institutional executor.

E. Public Trustee as executor and trustee

The Public Trustee for the ACT comments that effective trust administration is a complex area demanding specialist knowledge, vigilance, diligence, prudence, openness, independence, longevity, accessibility, expertise across several disciplines, compliance with regulations and accurate record keeping. The Public Trustee has expertise in management of funds, protection of capital and the creation of wealth. The Public Trustee employs lawyers, accountants, financial planners, tax agents and experienced trust officers with appropriate tools and resources. The fees are not disproportionate, especially when tax savings and good asset management are taken into account. The Public Trustee's primary concern is always to protect and further the interests of trust beneficiaries, especially vulnerable persons.

Power of appointment

There is something to be said for giving beneficiaries a "power of appointment" (that is, a power to appoint and remove the trustee). If this power is not given and the trustee becomes expensive, intransigent, difficult to work with or obstructive, the beneficiaries may want a different trustee appointed. But unless a power of appointment is given, the testator's appointment of trustee (institutional or individual) is in practice irrevocable once the testator has died: it is expensive and indeed virtually impossible for a beneficiary to get a trustee appointed by will removed except in extreme situations. See generally Geddes, Rowland and Studdert, paras [40D.13]ff; Porteous v Rinehart (1998) at 518 per White J: "It is rare for a court to remove an executor or trustee, save in exceptional circumstances"; Pope v Pope (2001) (Doyle CJ, Duggan and Bleby JJ); Weir v Matthews (2001) (Young CJ); Greenland v Baldwin (2006) (McMurdo P, Jerrard JA and Helman J) (a solicitor trustee).

If the appointment turns out expensive, frustrating or burdensome, the beneficiaries will just have to learn to live with it -- so the quality of the initial appointment is crucial. Giving to the beneficiary or beneficiaries a power of appointment is a strong and valuable protection, but it is not always available or appropriate.

General principle

Where the main beneficiaries (the beneficiaries of the residue) are adults and are entitled absolutely -- that is, where the will imposes no conditions or long-term obligations which affect the residuary beneficiaries -- the principle is still to appoint as executors the main beneficiaries, for they are motivated to complete the administration, and they are always free to obtain expert professional help.

Appointment of guardian for minor children

A surviving parent will continue to be the guardian of the minor child of the testator. As a result it is not usually necessary to deal with the guardianship of children where the other parent is expected to continue alive. However, corresponding wills of a husband and wife usually deal with two situations: the other spouse survives the testator by 30 days, and the other spouse does not survive the testator by 30 days. The testator usually wishes to provide for someone to be the guardian of the young children if the other spouse does not survive the testator. It is not usually necessary to appoint a guardian for children who have reached teenage years, indeed, the appointment of a guardian may inhibit the family when it tries to find a home for the orphaned children.

A step-parent does not automatically become the guardian of the children on the deceased's death. The law of testamentary guardianship in the ACT is governed by the Testamentary Guardianship Act 1984 (ACT) ('the Testamentary Guardianship Act'). It is therefore usual to appoint a testamentary guardian for the case where the children are orphaned, but not for the case where one parent survives.

The powers of a testamentary guardian (appointed under the Testamentary Guardianship Act) are set out in s 7 of that Act.

Section 7 (1) provides:

A testamentary guardian of a child has responsibility for the long term welfare of the child and has, in relation to that child, all the powers, rights and duties that are vested by law or custom in the guardian of a child, other than--

(a) the right to have the daily care and control of the child; and

(b) the right and responsibility to make decisions concerning the daily care and control of the child.

Section 7 (2) provides that the guardian may take into her or his custody, and may manage, the real and personal property of the child (not being property held by a trustee under a trust) until he or she ceases to be the guardian of the child. Other powers of the testamentary guardian are set out in s 7. Under s 7 the guardian is responsible for accounting to the child, when the child attains the age of 18 years, for the guardian's custody and management of that property.

Though the powers of a testamentary guardian (appointed under the Testamentary Guardianship Act) are not fully defined, it appears that having a guardian is valuable to the child in that without the consent of a guardian the child may have difficulty performing certain activities. These would include making decisions concerning the education, religion and medical treatment of the child. The guardian would also be able to consent to the child's marriage and the issue of a passport, and litigate on behalf of the child.

Make financial provision for guardians and carers

If you are considering making provision for the possibility that your minor children might be orphaned and will have to be cared for by some family member or friend, you should discuss with the person drafting your will the need to ensure that the guardian or carer does not suffer financial hardship by reason of taking on the care of the children.

Although the law allows guardians and carers to recover their expenses from the estate, they may tend to stint themselves, and suffer financially as a result of caring for the children. Also, it may be very difficult for the person caring for the children to identify clearly which of their expenses are strictly for the benefit of the children, and which are for their own benefit -- for example, if the guardian or the person caring for the children has to buy a larger car or a larger house to accommodate the children. The will should make some specific provision about this.

Gifts to charities

A. Perpetuities

Gifts to charities are not bound by the rule against perpetuities (the rule which prevents trusts and other long term arrangements lasting more that 80 years from the death of the testator). It follows that testators can be encouraged to create charitable funds and foundations which will endure indefinitely. There are many important foundations which have endured for a very long time, and have been of immense benefit. The Rhodes Scholarship, the Nobel Prize and the Archibald Prize are examples. This encouragement is strengthened by changes to the tax law which have made bequests to charities more attractive.

B. Philanthropy, community foundations and Prescribed Private Funds

Philanthropy Australia, according to its website www.philanthropy.org.au is:

the national peak body for philanthropy and is a not-for-profit membership organisation. Our Members are trusts and foundations, families and individuals who want to make a difference through their own philanthropy and to encourage others to become philanthropists.

There are regional foundations, such as the Capital Region Community Foundation "Greatergood" (for the ACT region). Its website is www.greatergood.org.au. These community foundations provide average Australians with the capacity to have their own perpetual funds. Many people and families have taken advantage of these opportunities, and in doing so have given lasting benefit to the community.

The gateway to these community foundations is the Community Foundations Gateway. According to its website communityfoundations.philanthropy.org.au, the foundation is

a comprehensive source of information for those involved in, researching, or interested in becoming involved in community foundations in Australia.

The Community Foundations Gateway is managed by Philanthropy Australia.

The Foundation for Rural & Regional Renewal encourages the development of regional community foundations, and uses seed funding and challenge grants for regional development projects.

Government is keen to encourage private foundations to foster involvement of the private sector in funding of charitable and community causes. Prescribed Private Funds are one form of government encouragement. According to the Australian Tax Office website www.ato.gov.au/nonprofit/content.aspx?doc=/content/20926.htm:

[a] prescribed private fund is a trust to which businesses, families and individuals can make tax deductible donations. It is prescribed by law. The fund may make distributions only to other deductible gift recipients that have been either endorsed by the ATO or are listed by name in the income tax law.

To be prescribed the fund must comply with the government's requirements. Gifts made to a prescribed private fund on or after 1 July 1999 can be allowable tax deductions.

Difficult Wills Problems

Blended families

A blended family is one in which one (or both) of the partners has a child or children from a previous relationship. Blended families create very difficult wills problems, and an estate plan should be worked out. A testator who has a spouse or partner and children from a previous relationship really needs to have a professionally drafted will. If the testator leaves her or his whole estate to the surviving spouse or partner who is not the parent of the testator's children, and later dies, the surviving spouse or partner will take the estate. The surviving spouse or partner might then remarry, and, under the influence of new loyalties, make a will leaving her or his whole estate (including what he or she inherited from the testator) to the new spouse and the offspring of the new relationship. The testator's children from the previous relationship will be forgotten and get nothing. The situation must be dealt with carefully and sensitively by an individually crafted will. In sum, it is not good enough to give the whole estate to the new partner, in the hope that the new partner will "take care of" the testator's children from a previous relationship.

It might be mentioned that the intestacy rules will not deal satisfactorily with the situation on the death of the testator either. If a person who has a spouse or partner and children from a previous relationship dies intestate (that is, without leaving a will), the surviving spouse or partner will take the great bulk of the estate and the same problem arises.

Superannuation must be taken into account in doing an estate plan for a testator in a blended family. Superannuation is often the largest asset, and it usually cannot be dealt with by will.

Again, professional advice is essential where a testator has good reason for excluding some person from the inheritance (such as a former partner or spouse, or a child or stepchild or grandchild who has been a dependant of the testator): see Family Provision.

Testator providing for child with disability

Difficult problems arise when a person has a child who is disabled or unreliable with money or married to a person whom the testator does not trust. Again, professional advice is extremely important here.

Superannuation and life insurance

In giving instructions to a solicitor to draft your will, you should discuss the effect of superannuation and life insurance on the distribution of the totality of your assets after your death. Superannuation can have a very large and sometimes unexpected impact. Professional advice is needed.

Reasonable access to the will, refusal to give

Sometimes a person who is holding the will is unnecessarily restrictive about allowing interested persons access to the will or to documents which may be testamentary. The Court Procedures Rules r 3111, and see r 3115(1)(c);empower the court to order any person in possession of a testamentary document to produce the document to the court. An interested person who is being refused reasonable access to the will can use this provision to gain such access.

Helping a Testator Draft a Will in your own Favour

You should not help another person draft a will in your own favour, or, worse still, draft a will for another person in your own favour, as the court will regard these facts as suspicious circumstances, and may require you to satisfy the court that the transaction was righteous. This may be a difficult and embarrassing task, and if you fail you will get nothing under the will -- see Wintle v Nye (1959). Even encouraging a sick or elderly parent to make a will which benefits you may be risky: not only may the court in due course consider that you have crossed over into the area of suspicion, but you may suddenly arouse the suspicions of, and alienate, your parent, who may then cut you out of the will altogether.

Sample Will

Because drafting a will is a job for a professional lawyer we do not offer a sample will in this publication.

General caution relating to making or altering your will

Get professional advice.

It is most unwise to make, alter or revoke your will without professional advice. The misery caused to the testator's family by litigation, long delays, huge expenses, bitterness and uncertainty is terrible and very long lasting, and it happens regularly with homemade wills, wills altered at home, and wills apparently revoked at home.

After Making your Will

Where to keep your will

It is important that you keep your will in a safe place, but it is just as important that those who come after and need to find it can do so. One of the cruellest things you can do to your family is to leave them saying that "I think Dad had a will, but I don't know where it is". The court is most cautious about allowing an estate to be administered if there is doubt about whether there is a will because of the difficulty and unpleasantness involved in trying to claw back assets already distributed to what later turn out to be the wrong beneficiaries. In such a case the distribution of the estate could be held up for years.

Your solicitor will advise you about the best place to keep a will. Many solicitors keep wills in their firm's safes, but some nowadays refuse to, because of a High Court decision -- Hawkins v Clayton (1988) -- in which a solicitor who retained the will was held liable in negligence to the executor (who was the principal beneficiary) for not finding him after the testatrix had died. The suggestion is made in the report of the case that the solicitor may be under a duty to find out whether the testator has died -- an impossible task. Many Canberra firms have staff whose job it is to read the Canberra Times' death and funeral notices each day to check to see if they hold the will of a person who has died. Incidentally, Hawkins v Clayton also shows the disaster which can follow if a testator decides to make or change a will, and then puts off doing so until too late.

Another place to keep a will is in the branch of the bank you normally bank at. The Registrar of Probates in the ACT also keeps wills. The Public Trustee keeps original wills, and also deeds to property and other important documents, in safekeeping for a fee. However, this service is only for people who are clients of the Public Trustee.

Do not keep your original will at home, because, if there is a fire, the original and the copy are both lost. Also, some disappointed would-be beneficiary might go through your papers when you are very ill, or after your death, find the will and the copy and decide to destroy both. This is a crime, but it might not be detected.

Making sure the will is found after death

There is no safe mechanism for making sure the will is found after death. So the onus is on the testator to make absolutely certain that the will is found promptly after death. If you keep a copy of the will at home with your private papers, you should leave a note on the envelope containing the copy of the will saying where the original is to be found (including the bank safety deposit box number, if that is where the will is). It is dreadful for a bereaved family to have to search for a missing will. The administration of the estate can be held up for many years.

List of assets

Place a list of your assets in the envelope with the copy of your will. Assets may be hard to find. You should list bank, credit union savings accounts, superannuation, property, insurance policies, share holdings, trusts and so on to make the task of the executor much easier.

Make a note on the list of assets saying that the list is NOT part of the will, and that you do NOT want it to have testamentary effect. This is important, otherwise a question might arise whether the list (even though it is not executed with the formalities for a will) should be included as part of the will under the Wills Act s 11A, which is described at A. Formal requirements.

Codicil to a will

A codicil is a separate addition to an earlier will. You usually use it to correct an error in it or to make some small change. It is not usually a good idea to make a codicil because there is room for serious mistakes. A codicil has to be made with the same formalities as a will.

Changing a will before or after signing it

If you draft your own will, you may make a mistake in drafting and wish to correct it before the will is signed and witnessed. On the other hand you may, after signing the will and having it witnessed, wish to make a change to it.

Both may be done but special formalities must be complied with.

It is essential that every alteration in a will be signed near the alteration by the testator and by two witnesses (who need not be the same two witnesses who signed the will). The signatures must be made in exactly the same sequence and manner as if they were being made to execute the will itself. If the alterations are not properly signed and witnessed they will generally not have any effect and the will must usually be read as if the alteration had never been made. The Wills Act s 11A gives the Supreme Court power to admit to probate alterations that have not been formally executed.

Generally, it is better to execute a clean will rather than one containing alterations. So, redraft the will to eliminate corrections. If corrections or alterations have to be made after execution, redraft the will and execute it anew.

If you decide that some change needs to be made to your will, you should not attempt to alter the will yourself. You should consult a solicitor. The law reports are bespattered with cases where testators have written on their own, properly executed, wills, and the results are often drastically unsatisfactory.

Revising the will

Read the copy of the will every couple of years, or whenever a major event takes place in your family or there is an important change in the taxation laws. If the will makes sense, well and good. If it is out of date, get it fixed professionally. Notice that marriage usually revokes a will, and divorce revokes gifts to and appointments of the divorced spouse: see Automatic revocation by marriage; effect of divorce.

Revoking a Will

Automatic revocation by marriage; effect of divorce

A will is automatically revoked by marriage unless it is expressed to be made in contemplation of that marriage: Wills Act s 20. To remain valid after marriage, a will made before marriage should clearly state that it is made "in contemplation of my intended marriage to ... and is/is not conditional upon the marriage taking place".

If a will made before the testator's marriage is terminated by divorce, gifts to the testator's spouse become void when the marriage is terminated, and so does an appointment of the divorced spouse as executor. (Some other appointments of the divorced spouse also become void.) The rest of the will remains valid.

There is an exception. If the will is expressed to be made in contemplation of dissolution of the marriage, then gifts to and appointments of the divorced spouse remain valid after the divorce: Wills Act s 20A.

Revocation by action of the testator directed towards revocation

There are several ways in which a testator can revoke his or her will: see Wills Act s 21. The most common are the following:

• by specifically saying in a later will that all previous wills are revoked. It is normal to include a revocation clause in a will, as it prevents worry about whether an old will might be lurking in the background. A revocation clause could take this form: "I revoke all previous testamentary acts"; or
• by destroying the original of the earlier will with the intention of revoking it.

Reviving a Will

When a testator revokes a will by destroying it the testator then has no will at all. If the testator intended by destroying his or her will to revive an earlier will her or his intention will be frustrated because a will cannot be revived in this way. An earlier will can become valid only if the testator re-executes the old will once again with the full formalities, or, if the testator executes a codicil which shows an intention to revive the old, revoked, will. The Wills Act s 22 deals with revival of wills.

It is possible that the Supreme Court might exercise its power under the Wills Act s 11A to give effect to a will which has been revoked, but which the testator now intends to be his or her will.

Contesting a Will

There are several ways in which a will may be contested. In each case you will need to consult a solicitor.

Is the will valid?

A court may declare that a will is invalid on several grounds:

• the will was not properly signed and witnessed (bearing in mind the Supreme Court's power to grant probate to a will which lacks formalities: Wills Act s 11A;
• the will was superseded by a later will made by the testator;
• the testator did not have the mental capacity to make a will;
• if material in the will has been obliterated by the testator after it was signed partial invalidity may result;
• the will has been revoked by the testator; and
• there are suspicious circumstances surrounding the making of the will -- that is, a person who benefited under the will drafted it, or the testator was unduly influenced, or the victim of fraud, in drawing up the will.

The last--mentioned ground for declaring a will invalid (suspicious circumstances) needs further comment: where a person who has helped in the preparation of a will is also a beneficiary under that will, that person may have to satisfy the court that there was nothing improper in drawing up the will or helping the testator to draw up the will. It is therefore very unwise for a person to help a family member to draw up a will, particularly if the family member is old or weak.

Interpreting wills -- what does the will mean?

Wills, particularly home made wills, are liable to present difficulties of interpretation. The executor or any other person who may be affected by the meaning of the will may ask the court to decide what the will means. Sometimes apparently very simple words create severe problems.

For example, a testator writes in his or her will "I give my piano to my son's wife Ann". this seems clear enough at first glance. say, however, the testator, after making the will, sells the piano and buys another. Does the gift in the will cover the new piano? This is a question which is very difficult to decide. Again, say the testator's son and his wife Ann get divorced after the will is made. Does Ann, the testator's son's ex-wife, take the piano? This is another very difficult question.

The court has very limited power to go behind the will in deciding what the testator actually meant. Further, only the Supreme Court has jurisdiction to interpret wills, so interpretation of a will by the court is very expensive. Two things follow from this:

• wills should be professionally drafted; and
• where a will is difficult to interpret, those involved would usually be well advised to negotiate a compromise if possible.

Family member not adequately provided for

A close family member or person with a moral claim on the deceased can ask the court to order that provision for them be made out of the estate if the provision made for them is inadequate. This ground for challenging the will is called Family Provision. It is very important, and is dealt with in the next Part Family Provision.