Hope for the best, plan for the worst – why you need a Will

While we don’t talk about death, we shouldn’t ignore it. This article highlights why you need to have an up-to-date Will as part of your financial plan.

A Will is a legal document that sets out how you want your assets distributed when you die. More importantly, if your children are minors, your Will should identify who their guardian(s) will be. Ideally, the guardian should be close to them and share the same values that you have. Your Will should also provide details of how your children will be looked after financially. One option is to include a trust as part of your will to ensure there is ongoing financial support. This isn’t necessarily expensive, but it is important to get it right.

Without a will, your assets will be distributed via a legal formula. The issues with this are:

• Your family inherits less because the process is slower and more costly.
• The assets are distributed according to a predetermined formula. For example, your spouse would only get the first $150,000 plus a share of the remainder.
• The beneficiaries may pay more tax than required.

In most cases, marriage automatically revokes a Will. So, if you are recently married and haven’t done so already, you need to get yourself (and your spouse) a new Will.

Wills for people in a second marriage are usually more complex, especially if there are children from previous relationships. The needs of these children often need to be considered separately from children of the current marriage (or relationship).

In a marriage where the parents don’t have children from previous relationships, the wills are typically the same for each parent: if they die, everything goes to their spouse. If they both die, everything goes to their children.

However, in a second or subsequent relationship, it is more complicated. When one or both spouses have children from another relationship, they often need to take care that they do not leave everything to their spouse. If they do, there is a chance that one partner’s wealth ends up going to the other partner’s children.

Finally, if you are divorced it is important to make sure your will is updated. If your former partner is still a nominated beneficiary, they may still be entitled to your assets.

If you would like to discuss this further, please book a chat via the button below or contact us at 0417034252 or office@constructwealth.com.au.