Importance of having a Will

THE IMPORTANCE OF HAVING A WILL IN NEW SOUTH WALES

 

Planning for what happens to your estate after you die is an important step to ensure that your wishes are clear to your family, and to minimise stress and confusion for those left behind. A well-drafted Will is a critical part of this plan.

 

A Will is a formal written document which sets out how you want your property (“estate”) to be distributed when you die. Whilst a Will can appear to be a simple document, there are many formalities which need to be observed to ensure a Will accurately reflects your wishes. This includes ensuring your Will is properly signed and witnessed according to law.

 

Some important considerations include:

 

  • Your choice of Executor to seek Probate (the person who will be responsible for enforcing your wishes)
  • How your debts will be settled
  • How your funeral and testamentary costs will be paid
  • Who receives your property, including superannuation
  • Gifts to family, friends and organisations which are important to you
  • Tax implications of your gifts

 

Creating a valid Will can ensure instructions are in place for care and guardianship of minors and other dependants and is a way to leave gifts to children for when they grow up.

 

What happens if I don’t have a Will?

 

If you die without a Will (or ‘die intestate’), your possessions and assets will be divided as per the Succession Act 2006 (NSW). This Act passes your estate automatically to your spouse or relatives in a prescribed order which may differ from your wishes.

 

Dying without a Will means that gifts cannot be left to friends.

 

Wills for Marriage, Partners and Divorce

 

Having a clear and properly executed Will is important whenever there is a significant change in your relationship. This includes when you are married, or when a marriage comes to an end, and if you are cohabitating with a partner.

 

If you have a blended family, it is important to ensure that your Will reflects care arrangements for any dependents in your household.

 

Emergency Wills

 

If you or a family member believe that there is an urgent need for a Will to be drawn due to illness or injury, please get in touch with us before it is too late to do so. Please call our office and let us know the emergency and we will discuss with you how we can help. Our solicitors often visit hospitals and nursing homes by arrangement.

 

Get started on your Will today  

 

With over eight decades of experience in Estate planning, the team at Redmond Hale Simpson is ready to answer any questions you have about making a Will. We offer fixed price Wills packages.

 

Read more here or get in touch today.

Understanding Property Ownership Types

Understanding Property Ownership Types
 

There are mainly two types of property ownership: Joint Tenancy and Tenancy in Common, with each having significant distinctions. Upon purchasing a property, its ownership type is specified on the transfer document. Joint Tenancy is noted for the right of survivorship; this means that if one owner dies, their share directly transfers to the remaining owner(s), overriding wills or separation agreements.

Conversely, Tenancy in Common permits the distribution of each owner’s property share according to their will, without an automatic right of survivorship.

Recognising the differences in ownership structures is crucial for several reasons, including considerations for taxes, estate planning, and safeguarding assets. Often, purchasers of property might not fully grasp the implications of each ownership structure, leading to a desire for changes that come with substantial costs. Relationship alterations frequently necessitate ownership adjustments.

Changing Ownership

It is possible to change ownership types, but such changes can incur tax implications. Specifically, altering property ownership often triggers Stamp Duty expenses in New South Wales (NSW), calculated on the property’s market value at transfer time. For example, a switch from Joint Tenancy to a single owner for a property valued at $1.5 million could lead to an approximate Stamp Duty of $28,000, barring exemptions.

Estate Planning

To align estate management with personal wishes posthumously, individuals might change their property’s ownership type. Transitioning from joint tenancy to tenancy in common allows an owner to dictate their property share’s distribution through their will, offering more control over their estate.

Relationship Changes

Changes in personal relationships, such as marriage or entering a de facto partnership, might prompt the addition of a spouse or partner to the property title, shifting the ownership to either joint tenancy or tenancy in common. Similarly, separation or divorce could require removing a spouse or partner from the title. In NSW, property transfers between partners, whether married, separated, or in de facto relationships, may qualify for stamp duty exemptions.

Financial Considerations

Owners might also modify their property ownership type for tax optimisation, investment strategy alignment, or asset protection. Shifting to tenants in common, for example, allows for specifying different ownership shares, possibly offering tax benefits or aligning with individual investment preferences. Strategic financial planning might necessitate such changes for enhanced tax efficiency or investment outcomes.

Other Factors

Several other considerations can influence ownership changes.

Under the NSW Succession Act, the court can include a deceased’s ‘notional estate’—property controlled or benefitted from before death—in family provision claims, potentially affecting joint tenancy properties. Additionally, severing joint tenancy following a relationship breakdown can clearly define and protect each party’s interest, often a strategic estate planning move to ensure assets are distributed as desired, circumventing the automatic transfer inherent in joint tenancy laws.

In the context of family law, in the aftermath of a relationship breakdown, it may become necessary to sever this joint tenancy to ensure that each party’s interest in the property is clearly defined and protected and may prevent improper dealing of that property. In the broader context of estate planning following a relationship breakdown, severing joint tenancy is often a strategic step to ensure that assets are distributed according to the party’s wishes. It is a preventive measure against the risk of significant assets, like the family home, bypassing the intended estate plan due to the operation of joint tenancy laws.

Process

In NSW, changing property ownership involves legal steps, including completing specific forms for the Land Registry Services and potentially dealing with Revenue NSW for stamp duty matters. Consulting legal and financial professionals is essential to navigate these changes legally and effectively.

Changing tenancy is a significant decision with profound implications for property rights and estate planning. Individuals considering this should seek legal and financial advice to understand the implications fully and ensure that their interests are protected.

Disclaimer

This information is provided for general informational purposes only and should not be considered legal advice. Property ownership and its implications can vary significantly depending on individual circumstances, legal jurisdiction, and changes in law. It is crucial to consult with a qualified legal professional to understand the specific implications of your situation. Do not rely on this information for making legal decisions. Seek personalised legal advice to ensure your decisions are informed by the most current legal standards and practices and are suitable to your situation.