“What will happen when I'm gone?”

Many parents tell us that one of the major things that keep them up worrying at night is what will happen to their son or daughter with a disability after they are gone.

A crisis is the worst possible time to look at alternative options for a person who has always lived in the family home. Time is needed if parents are to be fully engaged in drawing up the plans, so that they gain a sense of security and remove the sense of anxiety about the future.

It is crucial for the person with disability to be involved in the planning so their hopes and wishes can be realised.

Often parents do not want responsibility of care to fall upon other siblings and it’s also a common worry that no-one will be able to care for their child in the same way that they do.

The best way to deal with these anxieties is to take the steps necessary to secure the future of the people you care for with a thorough plan that is legally valid and which is well understood and accepted by family or other support people. This takes time and assistance to develop.

In conjunction with La Trobe University Law School we have produced a series of articles to help you legally plan for the future – all in an easy-to-understand way.

These include topics such as wills and estate planning, guardianship, power of attorney, trusts and special disability trusts.

This week we feature wills.

Please note: This is legal information, not legal advice. Always consult a lawyer before you develop your legal planning for the future.

Reasons to make a Will

Every person 18 years of age and older should make a valid Will. Properly drafted Wills can be powerful documents that help ensure your plan will continue when you are not there to help your son or daughter or the person you care for.

A Will should make provision for:

• Payment of debts, taxes and other liabilities.
• Funeral expenses.
• Distributing what you own as you wish.

This includes property/real estate, cash and bank accounts, investments and insurance policies, household furniture, clothing, and personal items.

• Protecting the financial position of a son or daughter with a disability, perhaps through a trust.
• Ensuring there is a guardian for your children (under the age of 18 years).

Testamentary capacity

Testamentary capacity is the capacity to understand that you are making a Will and to be able to participate in the process independently. Some people with cognitive impairments may still have testamentary capacity and other people may not.

A doctor or a solicitor will be able to assess whether a person has testamentary capacity and therefore can make a will.

What difference does it make whether I have a Will or not?

If you die without a Will, the law calls this intestacy. If you die with a Will that only gives away some, but not all, of your property, this is called a partial intestacy. When a person dies intestate or partially intestate, State or Territory law applies automatically and the property that is not dealt with by the Will is distributed by reference to a formula.

The formula typically benefits the ‘next of kin’: a wife or husband, if the person is married or in a de-facto relationship, and children. However, different rules apply in different States and Territories.

Dying without a will means that if you have some money or a house you do not have a say about to whom the money or the house will go to. In addition, different rules apply if you have movable property (such as goods) or immovable property (such as land) that has not been dealt with in the Will. This can make matters very complicated.

It can result in considerable additional expense as lawyers become involved to sort out what your intentions were and divide the property, sometimes against your wishes. In addition, if you die intestate or partially intestate, the Public Trustee may become involved in the execution of your Will, giving rise to additional expense.

To avoid all of these problems and complications, you should make a valid Will. It may make things less complicated and costly for your beneficiaries. A valid Will can help your family or people who receive a gift under your Will (your ‘beneficiaries’) avoid unnecessary costs, delay or legal challenges.

Where can I go for help developing a valid Will?

It is possible to make a valid Will without the assistance of a solicitor but this is generally not advisable. To avoid intestacy, partial intestacy or confusion, delays and costs associated with poorly-drafted Wills, it is very important to seek legal advice. Some solicitors are willing to provide this service free-of-charge, but often they will charge a fee for the ‘execution’ of the Will.

This fee can sometimes be calculated by reference to a percentage of the value of the estate, so you should check with your solicitor as to how they will charge for this service as it can be very expensive. Execution is a word that describes the process that takes place after you die to divide the property in your Will among beneficiaries.

A valid Will appoints an:

• ‘executor’ who has this task. The executor files documents with the Supreme Court of the State or Territory where a person dies seeking
• ‘probate’, or an order confirming the death of the person, after which the property may be validly distributed among beneficiaries. The Public Trustee in each State and Territory can prepare Wills. However they also charge fees.

What if a person with an intellectual disability has no provision or inadequate provision made for them in a Will?

Parents should be aware of the risks entailed in making a small provision for a son or daughter with an intellectual disability where there are sufficient resources to do so. Many parents and carers engage in informal planning with a ‘key person’, such as an adult child that does not have a disability, to plan for the future care of a person with an intellectual disability. This has many benefits for ensuring continuity of informal relationships and supports, but this is not a secure approach to planning for the financial future.

Some parents and carers simply assume that their son or daughter, without disability will, care for their sibling with a disability, even though they may never raise this proposal with them. This is an even less secure approach to planning for the future.

To avoid potential problems, a Will could include a trust that ensures that the property left behind is used for the advantage of the person with a disability (the ‘beneficiary’). We provide more information about these arrangements in a section in this Guide called ‘Trusts’. There is legislation in each State and Territory of Australia which gives courts power to alter a Will where the person making the Will has not made adequate provision for their son or daughter with an intellectual disability. This may help the situation but there are costs and delays associated with this.

It is far better to plan in advance.

What if my son or daughter does not have the capacity to manage money?

Before preparing a Will, parents need to consider the capacity of any beneficiary with an intellectual disability to manage money or property, such as real estate, for themselves. It should not be assumed that a person with an intellectual disability is incapable of managing a gift.

Many people with disability can manage money and property and some may only require some support or assistance making decisions about their money or property. Many people would consult a solicitor or financial planner if they were thinking about making an important decision about their money or property and people with disability are no different.

Some people with disability may not have the capacity to make some types of decisions about money or property. It is important to have arrangements in place that account for this.

All families are different. In each case parents and carers need to consider the size and complexity of any gift they plan to leave and their son or daughter’s capacity to look after property, to understand its worth and whether or not they are vulnerable.

Older people and people with disability can be vulnerable to financial abuse, so people who are given money or property in a Will should have independent advocates available to support their decision-making. If the person does lack the capacity to manage money you can still leave money or other property to the person in a Will as there are several ways to structure a Will to protect the interests of the beneficiary:

• Parents can leave a share of the estate in a trust. This requires appointing another person or people, which could include trusted family members or friends, as ‘trustees’ to manage and use the fund for the person with an intellectual disability in the way specified in the Will.
• The trust, for example, may provide for a weekly payment to be made to the person with an intellectual disability in addition to their disability pension or other social security payment, if they receive one.
• There are different varieties of trusts which we will look at in a later article.

What assets can be dealt with in a Will?

A Will can only deal with assets that the person making the Will actually owns. It therefore cannot deal with assets owned by a family company or a family trust because the person making the Will does not own them.

• Superannuation proceeds are ‘owned’ by the trustee of the superannuation fund, not the person making the Will. While the trustee may follow a non-binding direction as to how to deal with the funds it usually has complete discretion.
  It is a mistake to think that superannuation proceeds are necessarily part of an estate for the purpose of making a Will. Specific arrangements have to be made to ensure that superannuation proceeds can be applied for the advantage of a person with disability.

• Life insurance policies on the life of a person making the Will may be owned by somebody else; for example, a spouse or even a former spouse. If so, it is not an asset that will form part of the estate.

How often should my Will be revised or updated?

Your Will expresses your wishes at a particular point in time. You may wish to review your Will when circumstances change to reflect accurately your current wishes. Those situations may include:

• Divorce.
• If you are in a de-facto relationship.
• The executor named in the Will becoming ill or unable to handle the responsibility or has died.
• Buying or selling assets: people may gift assets which they sold before they died which results in some beneficiaries receiving nothing, while others receiving significantly more than was intended in the original Will.
• The value of legacies (gifting of money) diminishing over time: you may have left a sum of money which seemed significant when you last made your Will, but what is it worth in today’s dollar terms?
• A beneficiary named in the Will having died: when writing your Will, it is wise to name substitute beneficiaries.
• Changes over time in your relationships with family or friends

What are the ‘nuts and bolts’ of writing a Will?

A valid Will must be:

• In writing – this includes handwritten, typed or printed;
• Signed – ideally your signature should be at the end of the Will;
• Witnessed – a Will must be signed by you and witnessed properly. The rules for this differ slightly in each State. Two independent adults who are not beneficiaries are usually required to witness a Will at the time they see you sign it.

Helpful tips

• You and the witnesses should all use the same pen as evidence that you were all together when the Will was signed.
• Nothing should be attached to the original Will with a pin or paper clip.
• No alterations should be made to the Will after it has been signed.
• The witnesses should print their names and addresses below their signatures.
• Keep a clear, comprehensive list of your assets (bank accounts, investments, insurance policies, title deeds and so on) and update this from time to time. This will make your executor’s task much easier and quicker.
• It will be helpful if you leave a list of people and organisations to be notified of your death. These might include Centrelink, the Department of Veterans’ Affairs, clubs, particular relatives or friends.
• Be specific when you want a particular gift to be given to a person. For example “a diamond ring to my daughter Suzie” as there may be three diamond rings at the time of death which may cause confusion.
• Make sure you have specifically named your beneficiaries (using their full name).
• Ask executors ahead of time if they are happy to be an executor. Finally, tell your family members where your Will is kept. A Will can be kept with your lawyer or, if you prefer, at home with other personal documents in a place well-known to the family.

Can I specify my funeral arrangements in a Will?

It is advisable to inform your next of kin or your executor of your wishes, as well as including that information in your Will. Often your funeral will have taken place before your Will is read.

Can the person I care for who has a disability write a Will?

Many people with an intellectual disability can make a Will and should be encouraged to do so. However, the person must have attained the age of 18 years. Usually a Will is uncomplicated and can be written in plain English. Any person who makes a Will must have ‘testamentary capacity’ which means that:

• The person knows a Will says what happens to his or her property after they die
• The person knows what property he or she owns
• The person knows the people who may have a claim on his or her property
• The person is able to consider claims of these people.

What will happen if a person dies without making a Will?

If a person has property, then the property is divided by a government agency called the Public Trustee according to the various Acts in each State or Territory in Australia. This usually means the property goes to the person’s nearest relatives. If there are no people entitled to the property according to the law that property goes to the Government.

Is evidence of capacity required?

A Will is usually presumed valid unless and until someone challenges it. A formal assessment (by a doctor or similar professional) is not required to make a Will. However, there may be a risk that another person will be unhappy about the distribution of property under the deceased person’s Will.

That person may challenge the Will on the grounds that the person making the Will did not have sufficient testamentary capacity. For that reason, people with an intellectual disability should ordinarily be assessed by someone, such as a psychologist, who is familiar with the issues involved in testing for testamentary capacity.

When deciding whether or not evidence of testamentary capacity should be obtained, the following factors should be considered:

• The Will-maker’s own views
• The level of disability of the Will-maker
• The value of the estate
• Any possible challenges to the Will in the future. Written notes recording the understanding of the Will-maker at the time of making the Will may be sufficient evidence of testamentary capacity. Anyone who has been involved with the Will-maker for a long period of time, for example the family doctor or a support worker, may provide evidence and be present when the Will-maker gives instructions for the drafting of the Will or when the Will is explained and signed. In a situation where more evidence of testamentary capacity is required the Will-maker may be willing to be examined by a psychologist or neurologist. Any written notes or statutory declarations should be kept with the Will.

Can someone else make a Will for a person with an intellectual disability?

No. Another person cannot make a Will for any other person. Guardians, trustees, parents and people under a Power of Attorney have no power to make a Will on another’s behalf.

There are limited circumstances in which the Court may authorise that a Will be made, altered or revoked for a person without testamentary capacity. This is sometimes referred to as a Statutory Will or Court Ordered Will. If you are considering an application for a Statutory Will you should seek advice from a lawyer.

Is a solicitor required to prepare a Will?

No. A Will does not need to be prepared by a solicitor but if the person’s property is valuable then a solicitor may be better placed to ascertain some legal issues.

Document checklist

These papers should be organised and kept in a safe place. Ensure a friend or family member knows where this safe place is:

• Birth and marriage certificate
• Your Will
• Property deeds
• Lease agreement
• Taxation records
• Insurance policies
• Life assurance/superannuation policies
• Details of other assets, e.g. shares, debentures etc.
• Details of all bank accounts, other investments

Legal expressions

Beneficiary

A person who receives something from an estate.

Executor

The person who is responsible for administering a Will.

Guardian

The person that you would like to look after your children. This is only a statement of preference by you; the decision of who cares for your children is made under family law principles.

Testator

The person who makes the Will. This person is the ‘Will-maker’.

Trustee

A person who administers a trust established under a Will; for example, a trust for children. Think carefully about who you want to have what things; for example, “I want my brother, Stephen, to have all my DVDs”.

Who can help?

The Law Society in your State or Territory will assist you to find a solicitor who has experience in working with people with a disability, or the Public Trustee is available to assist as well.

This content is from the ‘Discover Guide’, a 122 page comprehensive guide to the NDIS prepared by La Trobe University in conjunction with Endeavour Foundation, and funded by the National Disability Insurance Agency. The guide aims to help people understand the various components of the NDIS and how to access them. It also includes additional legal information – such as wills, guardianship, trusts and estate planning – for people with a disability and their families. The authors of the Discover Guide (Second Edition) were Gail Casey, Patrick Keyzer and Darren O’Donovan.