Do I Have to Divide Assets Equally When Making a Will in Qld?
Factors You Should Consider for Smooth Estate Administration
Creating a will is an essential part of estate planning, allowing you to dictate how your assets will be distributed after your passing. In Queensland, as is in many other jurisdictions, there is no strict legal requirement to divide your wealth equally among your beneficiaries. The freedom to distribute your assets as you see fit is one of the fundamental principles of will-making. However, it's important to understand the nuances, considerations, and potential consequences of unequal asset distribution when making your will.
Here are some things to consider:
1. The principle of testamentary freedom
The principle of testamentary freedom refers to your right to decide how your estate will be distributed after your death. In Queensland, this principle is generally upheld, allowing you to allocate your assets to reflect your preferences and values. This means that you have the legal authority to specify who receives what from your estate without having to follow an equal distribution pattern — however, this freedom can only be exercised by those who hold testamentary capacity.
Testamentary capacity
Testamentary capacity assesses the mental clarity of a testator (the person making the will) when they drafted their will. To be considered a valid legal document, a will requires the testator to possess sound judgment, comprehension, and recollection. A testator is presumed to possess testamentary capacity unless proven otherwise with evidence presented to the court.
2. Family provision
While you have the freedom to distribute your wealth as you see fit, there is a legal mechanism that can be used by certain family members or dependents if they feel that your will does not adequately provide for them. This mechanism is known as a family provision claim, and it allows eligible individuals to contest the will in court. If a family provision claim is successful, the court may order a redistribution of the deceased's assets to ensure that the claimant receives a reasonable financial provision from the deceased person's estate.
Eligibility for claims for family provision
Not all individuals can make a family provision claim, and eligibility criteria vary. Typically, eligible claimants may include spouses, de facto partners, children (including step-children and adult children), and other dependants. The Supreme Court will consider factors such as the claimant's financial needs, their relationship with the deceased person and whether adequate provision has been made for them in the will (provided it was a valid will).
Balancing testamentary freedom and claims for family provision
Balancing your freedom to distribute assets as you wish also has the potential for a member of the family to make a claim for family provision. It's vital to consider your relationships, moral obligations, and the financial needs of your beneficiaries when making decisions about asset distribution.
3. Moral obligations and family dynamics
While you are not legally required to divide your assets equally, you should be mindful of your moral obligations and family dynamics. Unequal distribution of assets can sometimes lead to disputes, hurt feelings, or strained relationships among your beneficiaries. It's important to think carefully about the potential consequences of your choices.
4. Documenting your intentions
To help prevent disputes and challenges during estate administration, a prudent practice is to document your reasons for any unequal asset distribution. While you are not obligated to provide detailed explanations of your intended distribution, a brief statement (usually in the form of a Statutory Declaration) can clarify your intentions. For example, you might explain why one child is receiving a larger share of your estate due to financial need, a history of caregiving or an estranged relationship with other children.
How should I structure my will if I want to unequally distribute my assets?
If you decide that unequal distribution of your estate is the best approach for your situation, there are several strategies you may wish to consider. These include:
Gifts during your lifetime: You can make gifts or financial transfers to specific beneficiaries during your lifetime. This may help address their financial needs or provide support when they need it most. Keep in mind that in New South Wales gifts made within three years of your death may be subject to certain legal restrictions and that bequeathing assets prior to your death may have taxation and other financial implications for both you and the beneficiary.
Specific bequests: Instead of dividing your estate into equal shares, you can specify particular assets or sums of money to be given to individual beneficiaries. For example, you might leave a specific property or a valuable piece of jewellery to a particular family member.
Trusts: Establishing trusts may be a useful tool for distributing the assets in your deceased estate per your wishes. A trust allows you to set aside assets for the benefit of a specific individual while providing for their ongoing financial needs. This can be particularly helpful if you have concerns about a beneficiary's ability to manage a substantial inheritance.
Equalising in other ways: If you want to treat your beneficiaries fairly but not equally, consider alternative methods. For example, you might provide one beneficiary with financial support for education or housing during your lifetime, which can be considered when determining the final distribution of your assets.
Reviewing and updating your will
Your financial and personal circumstances will inevitably change over time, which can necessitate updates to your will. It's important to regularly review and revise your will to ensure that it continues to reflect your intentions and meets the needs of your beneficiaries. Life events such as marriage, divorce, the birth of children, or changes in your financial situation or family relationships may all warrant changes to your will.
Seeking legal advice when creating or updating your will in Queensland
Estate planning is a complex area of law, and making a will involves more than just how you divide your estate. It's important to consult with a lawyer specialising in estate planning and wills. Typically, estate planning lawyers provide expert guidance based on your specific circumstances, ensuring that your will is legally valid and well-documented.
Bradley & Bray Lawyers are experienced wills, estates & succession lawyers based on the Sunshine Coast. We assist many Queenslanders in navigating the legal requirements and potential challenges of making a will, estate proceedings and estate distribution.
Our estate planning team has many years of knowledge and experience to guide you in drafting your will and other relevant documents, and ensuring your estate administration goes smoothly and benefits the people who matter the most to you.
We can help you in:
Identifying and understanding the eligibility criteria for family provision claims.
Crafting a will that reflects your wishes and minimises the risk of disputes.
Ensuring that your will complies with Queensland's laws and regulations.
Remember that estate planning is a personal and evolving process, and it's essential to regularly review and update your will to ensure that it remains in line with your intentions and current circumstances. By taking a thoughtful and informed approach to making your will, you can provide for your loved ones and leave a lasting legacy that reflects your values and priorities — contact Bradley & Bray Lawyers to find out how.
Disclaimer: This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm, or another firm to provide legal advice in relation to your matter. Bradley & Bray lawyers takes no responsibility for any use of the information provided in this article.
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