27 September 2023

Where there’s a will: The high cost of not writing a will

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James Hall* says a new study has revealed the lack of care Australians take with their wills and the hundreds of thousands of dollars going to waste when they die.

Photo: Welcomia

A new survey has found more than half of Australians don’t have a will, which an estates law expert warns can be a costly “nightmare” for loved ones left behind.

Alarmingly, the study commissioned by Maurice Blackburn Lawyers reveals almost 40 per cent admitted to having almost no idea what happens when someone dies without a will.

If there are no legal documents, the distribution of assets can be delayed and opens up loved ones to the possibility of having cash and property swooped up by former partners or estranged family members.

The first issue, says the firm’s national head of wills and estates law, Andrew Simpson, is no one would have been directed to take charge to split the assets.

“Straight away on the day of death you have problems that arise when there is no will,” Mr Simpson told news.com.au.

“There might be more than one person who thinks they have the authority to fulfil that role so then you get a dispute.”

Because it is common in modern Australia for people to remarry and have blended families, Mr Simpson says this creates confusion and conflict with who has rights to what’s left behind.

“It’s terribly messy,” he said.

“It’s a shocker.

“The classic one we see is the blended family where the husband owned the family home, he died without a will and the widow expected to inherit the whole house and they don’t.”

“The step-kids then come knocking on the door and say we’re entitled to part of this property, we want it sold, we want you out and we want our bit.”

“Often the house needs to be sold to pay legal fees once they have fought about it for a year.”

“Dying without a will now with blended families is an absolute nightmare and it’s a recipe for dispute.”

Mr Simpson said he was shocked that only 6 per cent of people from the survey thought a separation or divorce would prompt a change to their will.

“That’s a staggering figure given that if you die without a will and are separated but not divorced, then your separated partner will still get a significant part of your estate,” he said.

“Yet only 6 per cent think that’s a good time to update your will; it’s amazing.”

He says another common issue is younger people who have fallen out with a parent.

“They may think they’re too young or don’t have assets worthy of a will, but the law says in that circumstance the estate is divided equally between the parents,” Mr Simpson said.

“All of a sudden the estranged parent is up 50 per cent even though there’s been a long period of no contact.”

The wills and estates lawyer told news.com.au a lot of people don’t think they have enough money to warrant the need for a plan, but he says simple life insurance and superannuation can add up to quite a hefty payout.

“What they don’t realise is we’re all worth much more dead than we are alive because we’ve got super and super funds have life insurance, and at our death that will often just be paid out to the estate,” he said.

“If there’s no will, then you’ve got the same problem of it potentially going to unwanted people who there’s been a dispute about who in fact is entitled to it.”

The legal cost of disputing a will is significant, but Mr Simpson says it can also be emotionally draining for loved ones.

“We often hear people involved in wills disputes saying they haven’t even had a chance to mourn the loss of their father or mother because they’ve been in an estate dispute since the day they died,” he said.

“They regularly say they just want the process to be over so they can get back to their life.”

He implored anyone who doesn’t have a will to get cracking and organise one as soon as they can.

“A lot of people think that it’s going to be very difficult, it’s going to be very expensive, it’s going to be very time-consuming,” Mr Simpson said.

“The reality is that most disputes that arise from an estate with a lack of a will could have been fixed by a one pager — a very simple document.”

“It doesn’t have to be complicated.”

“Just doing the very basics in most cases will get the job done.”

* James Hall is a finance reporter at news.com.au HQ. He tweets at @James_P_Hall.

This article first appeared at www.news.com.au

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