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Before we start let’s discuss the real purpose of an Australian Will.
Most Wills are limited to the basics.
Like listing your executor, beneficiaries & guardians.
Wills should do more than the basics.
- A Will should help Will owners and executors avoid estate disputes;
- A Will should help minimise income and capital gains tax on inherited wealth;
- A Will should help protect inheritances during divorce & financial problems;
- A Will should help protect inheritances during a beneficiary's problems like an addiction; - A Will should be flexible with change, so it doesn't have to be continually updated; - A Will should plan for the care of child beneficiaries; - A Will should give executors the guidance & authority they need to operate effectively.
So, the real purpose of any quality Will is to answer:
WHO is to receive an inheritance?
WHAT problems should we plan for?
HOW can we protect & maximise inheritances long-term?
At Will Wizard, we do all the heavy lifting to answer these questions for you. You simply provide your basic details, we guide you to make sensible decisions, and then our team takes care of the rest. A few days later your
Let’s examine the two main types of Wills you have to choose from.
1. Standard Wills
You’ve probably heard that 50% of Australians die without a Will.
What you might not know is that an estimated 95% of Will owners rely on ‘standard’ Wills.
Standard Wills are easy to spot. They are usually between two and six pages in length.
You can buy a standard Will from the Post Office, the internet, and from some lawyers.
Standard Wills can be free, or they can cost up to $500 per person.
So, what kind of Wills are the other 5% of Will owners relying on?
2. Comprehensive Wills
The other 5% choose comprehensive Wills, often called ‘testamentary trust' or ‘estate planning' Wills, which are usually at least twenty pages in length.
Comprehensive Wills from estate planning lawyers cost at least $1,500 per person and take two meetings to arrange.
Comprehensive Wills from Will Wizard cost $349 per person, or $499 per couple, with no meetings, free delivery, and three years of free changes.
We've brought together legal expertise & smart online technology to provide affordable & convenient comprehensive Wills.
So, why does the number of pages matter?
Why does it matter how many pages a Will has?
All Wills are written in a complicated language created by lawyers called 'legalese'.
This makes it tough for non-lawyers to tell the difference between Wills.
Standard Wills only have about 2 – 6 pages while comprehensive Wills are usually at least 20 pages in length.
The number of pages gives non-lawyers a really easy way of telling the difference between the two types of Wills.
So, what’s in all these extra pages of a comprehensive Will?
Let’s look at five key differences between standard and comprehensive Wills.
Difference # 1 – Will owners
Without guidance, it is easy for a Will owner to make a mistake that could lead to a dispute, or unnecessary taxes, that might cost beneficiaries a lot of money.
How much money?
In terms of disputes, around $100,000 per day in court.
And, as you will learn later, over time beneficiaries may end up paying hundreds of thousands of dollars in unnecessary taxes.
Standard Wills do not guide Will owners. They provide a blank template to fill in or email you a basic PDF. Then it's, 'good luck'.
The Will Wizard guided form explains your options to help you make sensible decisions that are in the best interests of your beneficiaries.
Just like meeting with an experienced estate planning lawyer.
Difference # 2 – Executors
The job of your executor is time consuming & stressful.
But a comprehensive Will helps to minimise the headache.
Standard Wills leave executors to fend for themselves.
They provide little authority, no guidance & no instructions.
This makes the process slower, expensive & complicated.
Like a map with invisible ink. Your executor will get lost, and your beneficiaries will suffer.
Comprehensive Wills give executors detailed instructions, guidance, and the legal authority to distribute your estate in a tax-effective and timely manner.
There is usually an entire section of the Will dedicated to providing this help to executors.
In Wills from Will Wizard, this section alone is five pages long, so executors never get lost.
Difference # 3 – Young beneficiaries
Whether it is your child or a grandchild, there exists a scenario where a young person may inherit a large sum of money.
Standard Wills say nothing about this scenario.
At 18, a beneficiary is free to blow the lot on a Lamborghini.
Or worse.
Comprehensive Wills plan for this scenario by including sensible instructions to executors on how to manage and protect the inheritance of a child under 18 years of age.
Will owners can also nominate a more mature age over 18 that a beneficiary must reach before they have complete control over their inheritance.
We explain this further in the Will Wizard guided form, and help you choose a sensible 'controlling age'.
Difference # 4 – Beneficiaries at risk
Life can take a turn.
A business fails. Addiction or mental illness develops. Perhaps a marriage or de facto relationship ends, and court proceedings commence.
Standard Wills say and do nothing to protect a beneficiary’s inheritance when a crisis strikes.
Comprehensive Wills include sensible legal provisions to help protect inheritances during a crisis.
These legal provisions can temporarily distance a beneficiary from their inheritance when it is under threat from third parties, or under threat due to addiction or mental illness.
Difference # 5 – Testamentary trusts
This is the big difference.
Standard Wills do not include the legal provisions that allow a beneficiary to manage their inheritance in a testamentary trust.
Comprehensive Wills include the legal provisions that allow a beneficiary to manage their inheritance in a testamentary trust.
So, why are testamentary trusts so recommended?
Why are testamentary trusts so recommended?
The short answer:
Testamentary trusts are the best way to keep family wealth protected for generations.
They help your beneficiaries to reduce income & capital gains taxes on inherited wealth, and help protect inheritances when under threat such as during a divorce, a de facto break-up, and during financial problems like a business failure or bankruptcy.
Testamentary trusts can last for 80 years and can be passed from one generation to the next.
Let’s quickly review the four main advantages of testamentary trusts to see what all the fuss is about.
Testamentary Trust Advantage #1
Inheritances protected from family law claims
Relationships in Australia last on average 10 years, so it is statistically probable that a beneficiary will go through a divorce, or de facto break-up after you pass away.
Testamentary trusts help protect a beneficiary dealing with a de facto breakup or divorce.
How?
With the inheritance held by a testamentary trust, inherited assets are isolated from the beneficiary’s personal assets. This means the inheritance would not form part of the disputing couple’s combined assets that are up for grabs in Family Court proceedings.
Testamentary Trust Advantage #2
Inheritances protected from bankruptcy & other financial problems
Financial problems can arise from any number of reasons, from bad luck to poor choices.
Testamentary trusts protect beneficiaries from the consequences of bankruptcy or owing money to creditors, like a bank.
How? Assets held by a testamentary trust are not personally owned by the beneficiary, and therefore do not form part of the beneficiary’s personal assets. Therefore, a person or company, claiming against the beneficiary that is having financial problems, cannot obtain the inheritance held by the testamentary trust.
Testamentary Trust Advantage #3
Income tax savings for beneficiaries
Testamentary trusts give beneficiaries the option to reduce their personal income tax.
How? Beneficiaries can distribute income earned from the investment of their inheritance to family members on low tax rates. A beneficiary can distribute up to $18,200 of income from their testamentary trust, tax-free, to pay for a family member’s education and living expenses. For an $800,000 estate, earning a modest 5% return, this equates to $40,000 income per year.
Over ten years, if this income is distributed to children or other low-income family members - this would mean $400,000 saved for the benefit of your family, rather than the ATO.
Testamentary Trust Advantage #4
Capital Gains Tax is not triggered when an asset belonging to you passes via your Will, to a testamentary trust.
As with the income of the trust, the trustee can distribute the capital gain to a family member on a low or nil income, and the capital gains tax liability can be significantly reduced.
To learn more about our Wills and how easy and affordable it is to provide your loved ones with the protections and tax benefits of a comprehensive Will that provides testamentary trusts, try our guided form. It will give you the information you need to make the right decision for you and your family.
Best of all it is free, fun and simple to do.
About Will Wizard
We are an Australian company providing an innovative online solution for Aussies wanting comprehensive Wills without the hassle, or the cost, of seeing a lawyer in person.
We rely on highly experienced estate planning lawyers with over 30 years of experience drafting comprehensive Wills. We also rely on CCH Pinpoint, Australia's leading specialist legal information provider, for the latest legal precedents.
All of the hard work is done for you by our expert team and our smart technology, so you can get on with living.
At Will Wizard we believe that every Will should provide beneficiaries with the option to receive their inheritance in a testamentary trust.
Only Wills that include the required testamentary trust provisions and terms can provide beneficiaries with this option. Everything is included in your Will for you. You don't have to do anything other than purchasing your Wills and signing them as per our signing instructions that are provided with your Will Wizard portfolio.
Will Wizard is the only online Will that provides testamentary trust provisions as standard, including broad trust terms for maximum flexibility in how a beneficiary can manage their trust depending on their changing needs, circumstances and tax status. No meetings are required, you simply complete our fun and easy guided form, and we then courier your secure Wills to your door for signature on delivery at no extra charge.
We've taken the hassle out of having comprehensive testamentary trust Wills.
Best of all, we provide three years of free changes and a money-back guarantee.
If you have a specific question please submit a ticket or request a call-back :)
We’d love to hear from you.
Will Wizard Co-Founder
As always, if you have questions about the suitability of any Will for your needs and circumstances, seek independent legal advice.