You’ve no doubt amassed some wealth over your lifetime and have considered who you might leave a bequest. But perhaps you’ve been put off making a will by the thought of distant relatives arriving on the scene shortly after you exit your deathbed, hellbent on claiming a share of your assets.
Add the fact that today’s ‘blended families’ mean there are plenty more distant relatives, and the risk that your last wishes will be ignored may seem to be even higher than it did in the past.
This concern – that, with some clever lawyering, almost anyone can have a will overturned – is one of the reasons some older Australians decide not to make a will. But while it may be relatively easy to find a lawyer willing to advise on challenging a will, successfully doing so is far more difficult.
Neil Herlihy, the head of customer segments and expert in Baby Boomer money matters at Westpac, says most people hugely overestimate the number of cases in which wills are successfully overturned.
“There is a perception out there in the broader society that it’s very easy to challenge wills, and very common,” he says.
“So why bother doing a will if it’s just going to be disagreed with, or challenged in the first case? It’s a really interesting misconception because nobody actually reports on how many successful challenges there are – we just know there are a lot of challenges.”
Herlihy agrees that media coverage of ‘celebrity wills’ – particularly where many people are squabbling over a large estate – can give people a distorted view of the value of having a will. But he says the misconception can also be created closer to home.
“There are plenty of friends with a war story about someone having an ostracised child or a de facto partner that wants to upset the apple cart, make their claim and get their money. The interesting part of the story is the person and the claim, not the outcome.”
Herlihy says that while there are many reasons a will may be challenged, increasingly such challenges are made by adult children who believe they’ve been unfairly treated in the division of the estate.
“There is always a group of younger people who have some sort of expectation, or entitlement complex, that it should be passed on to them,” he says. “The more family you have, the harder it gets, to a degree.”
Higher divorce rates and the resulting later-life second relationships help fuel the phenomenon, Herlihy adds.
“The family can sometimes see this new de facto or partner of their mum or dad as a threat or a liability, and that person, theoretically under the de facto laws in Australia, has entitlement as a surviving partner after a period of time,” he says.
The family might be right. Brian Herd, a partner at CRH Law and expert in all areas of elder law, calls this situation the ‘Ken and Barbie Syndrome’ – a condition that causes problems when the parent dies, leaving part of their estate to new partner.
“The children then pursue legal proceedings to have mum or dad’s new will declared invalid as they didn’t know what they were doing at the time or they were the victim of undue influence,” Herd says.
Each state and territory differs slightly on who specifically is permitted by law to contest a will on the grounds that they were left too little or nothing at all, but broadly speaking, the deceased’s spouse and the deceased’s children are usually included. (The situation with de facto and step-child relationships is more complex so to find out more, it’s best to consult a legal professional.)
There are also differences between each state and territory regarding the time limit in which a will can be contested and the process that must be undertaken to do so.
Herlihy has two suggestions for people worried about whether their will is likely to be contested. The first is to actually have an up-to-date will.
“A really well-written, legally binding, up-to-date will almost has a very low chance of being challenged successfully,” Herlihy says. “Very often people think a will is something they do once and it is forever legally binding. It is not. The real challenge to a will is keeping it up to date.
“Any time you have a change to your current personal situation, your will needs to be updated to reflect those changes, otherwise it may be deemed to be invalid or inaccurate.”
The second suggestion? Make sure your family knows what you want to happen after you’re gone – including who is going to get what!
“People tend to avoid these conversations, but like anything in life, in an open and honest, transparent conversation and interaction, you avoid 95 per cent of the future fights by talking about it earlier and giving your rationale.”
If you do wish to specifically exclude a person from benefitting from your estate, Herd has some additional advice – seek professional legal advice on creating a ‘statement of wishes’ that sets out your reasons for distributing your estate in the way you chose.
“You cannot prevent them from challenging but you can attempt to limit their prospects of success,” he says.
Things to know: The information in this publication is general information and factual only. It does not constitute any recommendation or advice. It is an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such. You should consider obtaining your own independent professional advice. © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial situation, objectives or needs. That means it’s not financial product advice and shouldn’t be relied upon as if it is. Before making a financial decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services advice.