The
Law
September/October 2001
Where there is a WILL
By Tom Williams, Solicitor
If you don't want to think about your own death - DON'T READ ON!
If however, you do realise that you can't escape death
and taxes, then I recommend that you prepare a Will. The main purpose
of any Will is to identify fully your personal and business affairs
so that these can be easily transferred to your surviving family with
the least amount of emotional strain on the survivors.
This article is not intended to describe how to prepare
a Will, but rather the necessity of possessing a Will that reflects
your current personal and business responsibilities. Your Will should
be seen as a vital component of your business documentation - along
with your Australian Business Number and any franchises agreements which
you have signed.
All these documents are inter-related and should be prepared
in consultation of both your lawyer and your financial adviser; for
example, any agreements must contain provision for the carrying on of
the business in the event of your death. Your Will must also reference
your business affairs.
Your Will must fulfil a number of functions;
it should:
- Itemise all of your assets (possessions) and make provision
for your personal and business commitments;
- Detail how these assets are to be distributed amongst
your family and friends (Beneficiaries);
- Provide for the future welfare of your family (estate
planning);
- Explain how you may wish to dispose of your body. For
example, whether you prefer burial as opposed to cremation and what
type of religious service you desire; and
- Expresses your personal views in regard to organ donation.
A Will is particularly important if you have children
under 18 years. I recommend that you identify the person (or couple)
you wish to look after the children (guardians) should neither parent
survive.
The Guardians will be responsible for the day-to-day upbringing
of your children until adulthood. Their responsibilities extend to such
matters as selection of the school and the type of religious instructions
the children will receive. It is important that you feel comfortable
on the choice of Guardians, be they members of your immediate family,
or a couple who have children of similar age and interests as your own.
Even if you now possess a Will, it may be outdated due
to your changed life circumstances - for example, since the preparation
of your last Will you may have married or gotten a divorce or had children.
I recommend that everybody review and update their Will at least every
3 to 5 years.
As mentioned above, I further recommend that all Wills
be prepared by a lawyer, in conjunction with advice from your financial
advisor. Both these professionals are in a position to advise you on
the best approaches to estate planning that minimises your (and your
family's) taxation liability in light of the ever-changing taxation
legislation.
The independent advice from your legal and financial advisers
is based on their knowledge of your day-to-day business affairs and
the advisers can provide that all agreements involving you contain provisions
for the carrying on and assignment of your business interests in the
event of your untimely death.
Service station and convenience store franchises normally contain
provisions relating to personal service obligations or indirect assignment
provisions restricting the assignment of the storeholding within family
companies without consent from the franchisor.
Should you die without leaving a valid Will, you are legally
termed "in testate". This imposes yet a further burden on
the surviving members of your family, whilst they are coping with their
personal loss. Without a Will, it is nearly impossible for the survivors
to determine how you planned to divide your property and business interest
within the family - from your interest in the business to who gets your
aluminium fishing boat.
Nowadays most people's three biggest
assets are:
- the home;
- the business; and
- the superannuation entitlement.
The identification of the above assets, their allocation
and disposal is of crucial importance to the surviving members of your
family and their future wellbeing. If the house is jointly owned with
your spouse as "tenants in common" then it is preferable that
your share of ownership be identified and disposed of through a Will.
Similarly, any share in a business should also be transferred through
the provisions contained in a Will.
I believe one of the most important parts of a Will is
the identification and allocation of small personal items - your mother's
wedding ring to your eldest daughter, an autographed cricket bat signed
by Don Bradman to your eldest son, or a painting which has remained
in the family for generations to your second cousin.
Although these are items of little monetary value, these
gifts enable your survivors to feel that you wanted to be remembered
by them. Likewise, should you wish to give any money to charity, you
should clearly specify the exact purpose for which the gift is intended.
In conclusion, I recommend that all persons over l8 years of age should
have a Will. This is especially important if you are in business or
have children under 18 years of age. Your lawyer will be glad to draft
a Will for you, and for every adult member of your family.