How Do I Write a Will or Trust?

When it comes to planning for the future, writing a will or establishing a trust are two of the most important steps you can take. Whether you’re looking to ensure your assets go to the right place, or just want to make things easier for your loved ones, having these legal documents in place can provide peace of mind. Here’s a friendly guide to help you understand how you can write a will or set up a trust, without getting lost in the legal lingo.

Understanding the Basics

What is a Will?

A will is a legal document that states how you want your assets distributed after you pass away. It appoints someone to manage your estate (an executor) and can also indicate guardianship for any minor children.

What is a Trust?

A trust is an arrangement where you (the settlor) can transfer assets into a trust managed by a trustee for the benefit of others (the beneficiaries). Trusts can help manage and protect assets during your lifetime and guide their distribution after your death.

Step-by-Step Guide to Writing a Will

1. List Your Assets: Start by listing all of your assets, which may include property, savings, investments, and personal belongings. This helps clarify what you want to bequeath to each beneficiary.

2. Choose Your Beneficiaries: Decide who will receive your assets. Beneficiaries can be individuals—like family and friends—or organisations, such as charities.

3. Appoint an Executor: Select someone you trust to carry out the instructions in your will. This should be someone responsible, as they’ll be dealing with legal and financial processes.

4. Draft the Will: You can write your own will using templates available online, but consider at least consulting with a solicitor, especially for complex estates. Make sure the will is clear and explicit about your intentions to avoid potential disputes.

5. Sign the Will: For a will to be legally valid in Australia, it must be signed by you in the presence of two witnesses who also sign the document. Witnesses should not be beneficiaries of the will.

6. Store the Will Safely: Keep your will in a secure place, such as with your solicitor or a fireproof safe at home. Inform your executor of its location.

Setting Up a Trust

Decide the Type of Trust

There are several types of trusts, including:

• Living Trust: Set up and effective during your lifetime.
• Testamentary Trust: Created as part of your will and activates after your passing.
• Discretionary Trust: Gives the trustee discretion in distributing assets to beneficiaries.

Drafting the Trust Document

• Identify the Trust’s Purpose: Clearly state the objectives of the trust. Is it to provide for minor children, support a charity, or manage tax obligations?
• Select a Trustee: Choose someone or an entity you trust to manage the trust. This person must act in the best interests of the beneficiaries.
• Define the Terms: Include details such as the management of assets, distribution terms, and how the trust’s income will be handled.

Legal Requirements

Consulting with a lawyer is recommended when setting up a trust to ensure it complies with Australian laws. They can help you draft the trust deed and provide advice on tax implications and other legal considerations.

Practical Tips

• Review and Update: Regularly review and update your will or trust to reflect major life changes like marriage, the birth of children, or significant financial changes.
• Consider Professional Help: While DIY options exist, seeking advice from a professional can be invaluable, particularly for complex estates or substantial assets.
• Communicate: Share your plans with close family and your executor or trustee to help avoid any surprises or confusion later.

Creating a will or trust is an act of care for yourself and your loved ones. While it may seem daunting, breaking it down into manageable steps can make the process simpler. Remember, professional legal advice is often a good idea to address specific circumstances or ensure compliance with the law. Taking the time to plan now can save your loved ones significant stress and ensure your wishes are honoured.