When American actor Phillip Seymour Hoffman died suddenly early this year, he left specific instructions in a will written a decade earlier. He said he did not want his then infant son to become a trust fund kid, so he left him out of the will.
Ten years later, the talented actor’s fame soared, as did his fortune to $35 million. He fathered another two children with partner, Mimi O’Donnell, who he reportedly split from in 2013.
The initial will, written in 2004, had not taken into account a decade of life changes. His vast estate went to O’Donnell, leaving his children without any money, but with specific instructions for his son, now 10, to grow up near “cultural hubs”.
Hoffman’s case is not an isolated one, he is another statistic in the number of people who either fail to make a will or update one. According to data from the Australian Securities and Investments Commission, half of all Australians die without a will.
Lawyer, Greg Alfonzetti, says the only people who really don’t need to fuss with a will are those who have no assets.
However, he adds that in this day and age most working Australians will have some savings, particularly with compulsory superannuation, which is a benefit payable on the death of a person and becomes an asset as part of their estate.
Anyone who owns property, particularly, has children or who are in a relationship should absolutely have a will.
“If you’re long time married and you plan to make your partner the sole beneficiary then a will made in the early stages of the relationship should hold,” Mr Alfonzetti said.
“If you had a will before you married, then it’s important to understand that the will become invalid once you marry. You will need to review your will arrangements.
“Another scenario is if you have entered into a new de facto relationship, you must have a will, as this partner can become the sole beneficiary. This may not be ideal if you have other competing interests such as, siblings, parents or children from previous marriages.”
Here are five mistakes you should avoid in your will.
1. Failing to update or make a will.
Make sure you have a will, and, importantly, update it. As Hoffman’s example shows, a lot can happen in 10 years. Relationships and finances can change. If circumstances do not change, then there is no reason to change a will, such as the case for a long time married couple, who plan to leave assets to the remaining partner.
2. Choosing the wrong executor
The executor has a lot of power. They become the sole signatory to redeem funds. Appoint someone you can trust. A good idea is to appoint two or three executors to act jointly. You can appoint a lawyer or the public trustee. In most cases, people choose a family member. If it is a simple situation, such as a married person, then they will choose their spouse, as they are going to get everything. Choosing an executor far away from your solicitor could cost time and money, but the advent of email does make this a little easier.
3. Debt carried forward
Thankfully, your debt can not be carried forward, so this means the beneficiary does not inherit debt. The law requires that before assets are distributed, the debts of the deceased be paid for by their estate.
4. Your will is hard to find
If you choose to hide your will, make sure you give a copy of the will to the executor and to one or two people who you trust.
5. If you exclude an individual, explain why
If there is someone you wish to exclude, for example a child, a de facto or former spouse, then it is very important to stipulate why you have made the decision, otherwise that person could challenge the will under the succession act.