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The importance of making a will for parents in Australia

Published on September 23, 2024 by Gillian KirwanGillian Kirwan

Creating a will is one of the most significant steps an individual can take to ensure their wishes are honoured after their passing. For parents especially, a will is crucial to provide for their children’s future and secure their legacy. This article will look at the key considerations for parents in Australia when making a will, including inheritance age, calamity clauses, and best practice for new parents.

Why every parent needs a will

A will serves as a legal document that outlines how an individual’s assets should be distributed upon their death. Without a will, an estate is distributed according to the intestacy laws of the relevant state or territory, which may not align with the deceased’s wishes. For parents, a will is particularly vital as it can:

• Appoint guardians for minor children – parents can specify who should take care of their children if both parents pass away. This ensures that the children are cared for by trusted individuals.
• Distribute assets – parents can nominate how their assets, including property, savings, and personal belongings, are divided among their children and other beneficiaries.
• Set up trusts – trusts can be established to manage assets for children until they reach a certain age, ensuring financial stability and proper management of funds.

Key considerations in a will

1. Inheritance age

One critical aspect of a will is specifying the age at which children should inherit their share of the estate. While the legal age of majority in Australia is 18, many parents choose to delay inheritance until a later age, to ensure that their children are mature enough to manage their inheritance responsibly. This decision often depends on the child’s financial acumen and the complexity of the estate.

2. Calamity clauses

A calamity clause is a provision in a will that addresses the scenario where both parents die simultaneously or within a short period. This clause can ensure that the estate is distributed according to specific wishes, rather than defaulting to intestacy rules. For instance, parents might want to set aside funds for their children’s education or specify how guardians should use the estate for the children’s benefit.

When to make a will

1. Upon becoming a parent

The best time to make a will is as soon as one becomes a parent. The arrival of a child significantly changes an individual’s priorities, and having a will ensures that the child’s future is secure from the outset. This initial will can always be updated as circumstances change.

2. Major life events

It’s essential to update a will following significant life events. These can include:

• Marriage or divorce – marriage generally revokes a will, and divorce can affect how assets are distributed. It’s crucial to update a will to reflect these changes.
• Birth of additional children – each new child should be considered in the will to ensure they are adequately provided for.
• Acquisition of major assets – significant purchases, like a home or business, should be included in the will to ensure they are distributed according to the owner’s wishes.

3. Periodic reviews

Even without major life events, it’s wise to review and potentially update a will every few years. This ensures that it continues to reflect the individual’s current wishes and circumstances.

Legal requirements and best practices

1. Legal validity

For a will to be legally valid in Australia, it must meet several requirements including: –

• A written document – the will must be in writing.
• Be signed and witnessed – the will must be signed by the testator (the person making the will) and witnessed by two individuals who are not beneficiaries.
• Have capacity – the testator must have the legal capacity to make a will, meaning they understand the nature of the document and the implications of their decisions.

2. Consulting a lawyer

While it is possible to create a will without legal assistance, consulting a lawyer can ensure that the will is comprehensive and legally sound. A lawyer can provide advice on complex issues, such as tax implications and the best ways to structure bequests. Seeing a lawyer for your estate matters is best practice.

Common mistakes to avoid

1. Not updating the will

One of the most common mistakes is failing to update a will after major life changes. This oversight can lead to unintended consequences, such as assets going to an ex-spouse or children being left out

2. Lack of specificity

Vague language in a will can lead to disputes among beneficiaries. It’s crucial to be as specific as possible regarding asset distribution and guardian appointments.

3. Not considering all assets

Some assets, like superannuation, may not be covered by a will. It’s essential to understand how these assets will be distributed and make any necessary arrangements outside the will.

Making a will is a fundamental responsibility for parents in Australia. It ensures that your children are cared for, and your assets are distributed according to your wishes. By considering inheritance age, including calamity clauses, and updating the will after significant life events, parents can provide security and peace of mind for their families.

Creating and maintaining a valid will is a critical step in responsible estate planning.

Please note that this article does not constitute legal advice. If you are seeking professional advice on any legal matters, you can contact Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will be able to assist you.