Understanding your Will

Know the basics before it’s too late

What is mental capacity, and how do you know whether it has been lost?

Sometimes you may be the person who has to decide whether another person has mental capacity to sign documents or make decisions for themselves.  It may be your parents. Generally, when a person has capacity to make particular decisions they can:

Understand the facts and choices involved.

Weigh up the consequences

Communicate that decision.

The legal test for capacity in simple terms is:

Capacity = understanding the nature and effect of the document at the time it is made.

Capacity can come and go, it can be better in the morning than at night. This does not mean that someone has no capacity.

If you intend to make a Will, Power of Attorney or Enduring Guardianship, you must have capacity. If you do not have capacity, then you cannot sign the document.  Don’t wait until it’s too late. Make your Will, Power of Attorney and Enduring Guardianship now, as life is short.

The importance of having a Will

I give advice to many people in relation to their Wills. In more than 30 years’ experience, I understand and know the difficulties, cost, anxiety and unnecessary friction between family members when there is no Will, or the current Will has not been updated within the circumstances of the testators.

If there is change in financial circumstances, for example, a specific gift such as a farm, a house, a boat or shares are left to a particular child and, if that property or asset is sold and the Will is not changed, then that child will miss out on that part of their inheritance. It becomes even more complicated if the sale of the property or asset was transacted by way of Power of Attorney, and not by the person, himself or herself.

The financial and emotional cost of not having a Will can far outweigh a properly considered and well thought out Will that covers changes in one’s life circumstances.

Wills, to a non-legal person, can be full of ‘jargon’ that one does not understand.  Set out below are a few legal terms that might be found in a Will, which may help you understand the document.  More often than not, the best Will is a simple Will, unless your circumstances are complicated. Complications may occur if you have a second or third marriage, a blended family, disabled children, a black sheep in the family, a very large asset pool, family trusts, superannuation entitlements and the list can go on. The moral of the story is to get good advice about your Will now, and not leave it to others to try to fix the problem after your death. If not properly thought out and carefully crafted, your Will can be contested, or not have the outcome you wish.

James Paton

 

Leave a Reply

Your email address will not be published. Required fields are marked *