When life treats us with unexpected twists and turns, it’s never a bad idea to be prepared with your financial planning. Choosing the right type of will now can help ease a lot of headaches for your loved ones in the future, and can ensure that your estate is handled just the way you want it.
So what types of wills are there? And which one best suits your needs and situation?
The most common type of will, which involves the owner of the will (also known as a Testator) to put the terms of the will down on paper, signing it and having all present witnesses to sign it too. This is so that the will can be recognised as “attested” by a witness or witnesses.
This is a type of will someone can choose to create if they wish to have certain conditions met. For example, a person who dies of a certain disease can opt to have their assets given to a charity that treats that specific disease.
This isn’t as cool as it sounds (I imagined an actual hologram of the Testator popping up from a screen in 3D form). A holographic will is basically a handwritten will by the owner, with no witnesses or signatures by the witnesses. Be careful with this choice, as it is usually quite hard to get this type of will recognised as valid, especially in Australia.
There are quite a few will options for couples, with a Joint will being one of them. This type of will is one single documented shared by two people. The passing of one person means that the estate shared between the two would go to the surviving partner. The will also helps decide what will happen to the estate when the second person passes away. A Joint will stops the surviving partner from making changes to the will, or taking back their decision on how the estate will be dealt with after their death, thus ensuring that the first person’s wishes are honored.
Also known as a Reciprocal will, this type of will is another good choice for couples. It entails two separate but identical (or near identical) wills that two people can have. Slight changes to each can be made, but the Assets are given to one another if one person passes, and in the case that both people pass away, then their estate goes to their nominated beneficiaries. A Mirror or a Reciprocal will also allows the surviving partner the freedom to change their will even after the death of their partner.
Another option for couples is a Mutual will. This also involves two separate documents, but unlike the Mirror will, both will owners are bound in agreement to not make any changes to their will if one of the partners pass away.
Also known as the “Death Bed” will due to the fact that it is an oral will, and usually chosen as a last minute option when nearing the end of life. Nuncupative wills require that at least two witnesses are present when the will is being presented. In Australia, Nuncupative wills are usually only allowed to be made by ‘privileged testators’, which include defense forces in actual military service, or sailors at sea.
This will requires that any assets that are left-over (or left out of the will) are to go through a probate before being put into a trust.
Testamentary trust will
Also known as just a Testamentary Trust, it is trust created within a will. It only comes into effect after the death of the will owner.
This is a will presented in video format. It is a good option for someone who wants to fully explain why they have chosen to give which asset to whom, and provides a personal way to convey this message to their beneficiaries. It is important to note that in most countries, a video alone would not be accepted as a valid will. Usually, a written version of the will accompanies the video.
Before starting on your will, always make sure to get professional guidance and assistance. Especially where finances are concerned, talking to a trusted accountant with experience in estate planning can go a long way in making sure your assets go a long way in looking after your loved ones. Often overlooked pitfalls like asset tax can easily be avoided (or the blow softened) with advice from understanding and caring accountants.