Demand for wills on the rise as coronavirus fears set in for Australians
The number of people preparing a will has jumped dramatically as the coronavirus pandemic shocks Aussies out of their ambivalence about estate planning.
"300% more Australians wrote wills in March than in the previous months," says Adam Lubofsky, CEO of online platform Safewill.
Demand has increased across the board, he says, from new parents trying to get their affairs in order to older Australian starting to think about estate planning given the uncertainty of the times.
"It's really been something that's on the minds of all Australians at this time it appears," Lubofsky says.
"We are writing hundreds of wills per month."
And it's not just online will platforms seeing a spike in interest.
Peter Bobbin, a partner at Coleman Greig Lawyers, estimates that inquiries are up 15-20%.
"With COVID-19 induced mortality being constantly presented to us, there is every reason to understand that the demand for wills is up," he says.
It's important to get your will reviewed by a professional to check for errors and gaps, says Lubofsky, whose company allows people to write their will online and have it reviewed by a legal team.
"They may draw the user's attention to different topics," he says.
"For example, if they have underage children and don't appoint a guardian for the children, this is something that the legal team will highlight."
Other errors might include unclear language where $10,000 is left to Jack and Jill - and it's not clear if it's $10,000 between them or each.
The price of preparing a will can range from $190 for an online will for a single person to more than $2000 for something drawn up by a professional to more than $6000 for documents that deal with a family trust and superannuation.
How to start your will
You should always make a plan before seeing a lawyer or estate planning expert, says Bobbin. Here are his tips:
- Pour a glass of wine (whiskey, tea or whatever) and grab a pen and five blank pages.
- List everything you own and also list everything that your significant other owns; include anything jointly owned and also any superannuation and list any insurances in the superannuation.
- List everyone you feel can or should benefit in some way. Note that the first person on your list is you.
- Page 1: If you survive your significant other, what do you want to see happen? Do you get everything? Or do you get the house and super but the children get the cash?
- Page 2: If you die before your significant other what do you want to see happen?
- Page 3: You both die - what do you want to see happen? 50:50 to your respective families equally to all the children but not until they reach a particular age?
- If there are under-18 children, add who will be their guardian? Who they will live with? What school will they go to? Who will manage their inheritance until they inherit?
- Page 4: This is for the disaster. In the event that you, your significant other and your children perish, who gets the inheritance?
- The final page lists the executor and two back-ups. You might also add enduring powers of attorney, enduring guardianship, and funeral details.
When you've made these decisions you are ready to take the plan to the professionals.
These are some of the most common mistakes people make with their wills, says Bobbin.
Common mistakes people make with their wills
1. They procrastinate because it's complex - they focus on the structure and are overcomplicate their intentions.
2. They don't include any information about capital gains tax.
There are no records to show if something is pre-CGT or not (pre-September 20, 1985) or if post, the cost of acquisition and holding.
This causes millions in extra tax to be paid every year on the sale of a holiday home because the only records are purchase price and sale price, and no other records are held.
3. They don't don't realise that super is taxable - they think it is tax-free.
This is only correct if the super goes to a spouse or under-18 child or a dependent, otherwise it is taxable.
This issue often arises with the death of the surviving partner but a simple plan can often manage this.
4. They think that super is controlled by the will - it probably isn't. A beneficiary needs to be nominated within your super fund.
5. They include structures such as family trust and self-managed super without seeing a professional.
To write a valid will, you must:
- be over 18
- be making it voluntarily, without pressure from others
- understand what you are doing
- have it signed and acknowledged by two witnesses who are not beneficiaries
- sign it (this includes printing and signing an online will)
We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.