Chances are we’ve all heard a horror story about a will.
There’s something about free money that brings out the worst in people. Expectations are high and feelings get hurt. Emotions over grief just add to the potent mix.
If someone feels like they are missing out, things often turn nasty. It doesn’t help that with the boomers passing away, an intergenerational wealth transfer unlikely to be seen again is on its way, and with more money in the pot comes more greed.
Unfortunately, it’s impossible to make an iron-clad will. With all the legal hurdles in the world, if someone wants to contest your will, they usually can.
It can be frustrating to think your will may be contested after you die. It’s your money and your wishes. So how can you ensure your will will be honoured? There are a few tactics.
Prepare to share
Firstly, before you even write up your will, start talking.
There’s an increasingly popular practice in farming and business families called succession planning. To be frank, I think many families could benefit from something similar.
At a basic level, a succession plan provides a guideline on how assets will be transferred to the incoming generation. A lot of legal action could be avoided if everyone was clear about what would happen before the will was read.
So, start talking to your beneficiaries about what you have planned and their expectations, because this could ease a lot of tension after a death.
However, be prepared for some pushback.
For example, you plan to give a bit more money to support a child who has struggled with life over a more successful sibling, but that could be seen as rewarding failure and breed resentment.
Many succession plans often include formal mediation, so don’t be disheartened if professional and legal support is required.
No-one left behind
You can also structure your will to avoid legal action. The most common circumstances around contesting a will are family members believing they have not been adequately provided for.
These figures are a bit out of date, but are probably still relevant. A study by UNSW Law Journal found that the largest category of cases contesting wills relate to family provision claims. The study found 86 per cent of claims were brought by immediate family: either children of the deceased (63 per cent) or partners (including ex-partners) (23 per cent).
You can avoid any potential conflict by adequately providing for all beneficiaries. Of course, this can still be contested, but if you have made a clear effort to provide for all of your beneficiaries, it’s going to go over better with the court than if you leave one family member out, or give them less, and they contest the will.
Legal advice is the key here. A good lawyer should advise you that singling one or more beneficiaries out may set the estate up for an expensive legal battle.
For example, you promise a larger portion of your estate as a reward to a child who lives near you and has provided support over the years. The courts may, and have, ruled that the only reason another child did not provide support was due to distance and financial hardship and is still entitled to an equal share.
You may wish to punish a potential beneficiary by leaving them out of the estate or leaving them a token amount, but be aware while they will have to pay for any legal action they initiate, the estate will have to pay to defend itself, and depending on the outcome may also have to reimburse the claimant for their costs. As a result the estate could be considerably depleted, which will be to the financial detriment of other beneficiaries.
Two easy legal tactics
Tactic No. 1: nominate a beneficiary for superannuation and life insurance payouts. Where there is a binding nomination in place, the payout is simply made to the nominee, and the policies never become part of the deceased estate.
Tactic No.2: make sure property is owned jointly with the person who is the intended beneficiary of that asset. When one joint owner dies, ownership of the asset will revert to the surviving owner and will not be part of the deceased estate. This approach also works for jointly held bank accounts.
Make sure it’s legal
You may have your will finely detailed on the back of an envelope with every last wish down to who gets the goldfish, but unless it’s legally lodged and witnessed at the very least, you are almost certainly setting yourself up for it to be contested.
Perhaps the most public case of this in Australia was the fallout of famous artist Brett Whitely’s failure to make a formal will.
Whitely allegedly promised his girlfriend, daughter, mother and sister they would all be taken care of, and while several people testified in court they had seen a will, it could not be found. The case ended up dragging through the courts for years. Ultimately his daughter Arkie received the lion’s share of the estate, but I imagine the lawyers’ costs were prodigious. If you want some idea about the motivation for the legal action, the highest sale price recorded for the artist was $6,136,364 for Henri’s Armchair 1974-75 sold in 2020.
If the cost is an issue, you can get a will done professionally for as little as $600 if it’s relatively straightforward, or you can buy a will kit online and do it yourself.
Give it away
One good way to ease your concerns about who gets what is to give it away before you pass away. This can be a win-win strategy. You can see your beneficiaries enjoying your largesse, the money or gifts go to who you want to, and there is little to fight over after you die.
Have you got a horror will story? Why not share it in the comments section below?
