The first step in successful estate planning is to ensure the legal documentation such as wills, certificates of title, etc., are in order and can be easily located by the administrator of your estate. There is little benefit in having a legal will if people cannot easily locate it.

A will ensures that your wishes regarding the distribution of your assets are carried out. The will drafting should consider such important issues as finances, business succession, business planning, and the needs of your family both during your life and after death. You also need to make sure that the will is flexible so that your estate assets can be equitably distributed.

It is important to have an up-to-date will which is reviewed every three years or so, or in the event of major life changes such as marriage, divorce or the birth of children or grandchildren. In addition, a three year review will also take into account significant changes in your assets such as new purchases or investments. Otherwise the will may fail, be revoked or challenged.

Surprisingly, over 40 per cent (Personal Investment Magazine 1994) of Australians die each year without a valid will. Our reticence for making a will vary from the belief that we are too young, to our natural reflex to avoid thinking about our own mortality.

But if you die without a valid will, you are deemed to be “intestate”. This means your estate (all your assets) will be distributed upon your death according to a statutory formula, rather than how you may have intended. Each state has a rule of law that determines the distribution of an intestate estate. This law prescribes the precise order of people who will share and benefit from the intestate estate.

Failure to make a valid will may:

• cause the estate to be distributed contrary to your wishes;
• mean you will be unable to provide for the particular needs of your surviving family; or
• delay the administration of your estate.

George is 40 years old and lives in Geelong, in Victoria with Linda, his defacto wife. He was married to Sue, and they had two children. He is now separated from her. George also has a son from a brief relationship some 20 years earlier, but has never seen him and did not want to provide for him in his will.

Following an unexpected heart attack, George dies without having created a will. He had, however, intended to make a will with a minimal provision for Linda, his defacto wife, with the bulk of his estate being to the two children he had with his wife, Sue.

George did not have a will and therefore did not provide for the effective disposal of his estate. This means that he died intestate and the estate assets will be distributed in accordance to the intestacy laws of the relevant State or Territory

• Where the estate is worth in excess of $100,000, the first $100,000 of the estate value will go to George’s (former) spouse.
• She will be entitled to a further one-third of the residual estate.
• The balance will be divided between all his children equally, including the son he has never met.
• The Act does not provide for distribution to de facto spouses. Therefore Linda, as the defacto wife, will receive nothing.