Life Insurance

Do I really need a will?

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

A will is by no means compulsory, but getting one in order could make things much easier for your friends and family when you die, while also ensuring your final wishes are upheld

Whether you’d like to leave a sentimental item to the person who would treasure it most, have your assets split evenly between those you love or donate money to a charity that’s close to your heart, a will can make sure that happens.

Remember, anyone can have a will. If there’s something specific you want to happen after you die, it’s definitely worth considering.

What happens if you don’t have a will?

The specifics vary state by state but, generally speaking, if you don’t have a will when you die, you die “intestate”. This means the distribution of your assets will be in accordance with the intestacy laws of your state or territory.

In NSW, generally speaking the order of distribution is as follows: spouse, children, parents, siblings, grandparents, aunts and uncles, cousins and finally the state.

In this case, your personal circumstances aren’t always taken into consideration. If you’re in a relationship but unmarried, your partner might not be entitled to anything. If you have no family, close friends wouldn’t be taken into account and the state may claim your assets instead.

Additionally, the emergence of estranged family members looking to benefit from your estate can place further strain on your family during an already difficult time.

Having a valid and properly prepared will in place gives you peace of mind that your wishes will be carried out exactly as you’d like.

Common reasons for not having a will

Incredibly, the Australian Securities and Investments Commission (ASIC) estimates that “nearly half” of people in Australia die without a will.

People often claim they’re too young to need a will, don’t own enough assets for it to be worthwhile or have no children to leave things to anyway. In fact, a recent survey by Finder found that having children was the top motivation (37%) for wanting to take out a will.

However, it’s a misconception that wills are only for wealthy people who are parents. A will is designed to distribute everything you own, no matter how large or small.

Whether it’s a $6 million house in Sydney’s eastern suburbs or your treasured record collection, a will can ensure your hard-earned possessions go to the people – or places – you care about.

Another misconception is that you’re too young to take out a will. You can make a legally binding will as soon as you turn 18 – and there’s good reason for it. Sadly, thousands of Aussie adults die before the age of 30 every year.

Finder’s research also found that 7% of people claimed nothing would make them take out a will. If you count yourself among this group, please make sure you’ve carefully considered all your options first.

Is making a will hard to do?

It can seem like a daunting task but making a will may be easier than you think.

There are two main ways you can go about writing a will. The first is preparing it yourself, either by using a pre-drafted will kit or simply writing one up from scratch. Will kits are pretty common and can be purchased at places like newsagents or bookstores, and a number of  online options are available.

This option is the cheaper of the two, but you’ll need to be careful the will you create is legally binding. For example, wills need to be witnessed by two people to be official. With COVID-19 restrictions in the process of being relaxed, this should become easier very soon.

The second option is to get professional help, usually from a lawyer. While this is more expensive, you’ll have peace of mind that your will is legally binding and can get expert advice if you have a lot of assets or a more complex family arrangement.

While it is not a legal requirement to have a will in place, there are lots of benefits to having one – for both you and your loved ones. Whatever your decision, the most important thing is to know that you have considered all your options and made an informed choice that’s right for you.

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