An online or DIY will may seem like a convenient and cost effective solution however they are rife with pitfalls.
Here’s three reasons why they are too good to be true for most Australians!
1: It gives you false peace of mind
Using a DIY online will or post office will template gives you a false sense of security that your affairs are sorted if you die.
The reality for most Australians is that a huge part of their wealth won’t even be covered by their will without additional legal documentation – think super and life insurance in your super fund.
Professional estate planning advisers do more than just write up a will – they help you stress test the practicalities of your estate plan. E.g. making sure there is enough money for children’s needs and education, or, whether your spouse will have access to enough money fast enough if you die etc.
The majority of online will providers don’t include an enduring power of attorney documents to plan for the event that you haven’t died but can no longer take care of yourself or make financial decisions for yourself. For many people this document is even more important than a will (because you are still alive)!
2: They’ll cost you and your loved ones lots more in the long run
Estate litigation lawyers love online wills and post office wills because they are a goldmine for court disputes after you die. Why?
- Often executors will require court guidance because of inconsistent, confusing or ineffective drafting
- The validity of your will is more likely to be challenged due to procedural irregularities like improper signing, witnessing, dating etc
- If you lose capacity without an enduring power of attorney in place your loved ones will have to apply to a Tribunal/Court to be given authority to sort out your affairs for you
3: They’re only suitable for a small % of the population
A big part of the estate planning process (and investment) when working with a professional estate planning adviser is the strategic advice you receive.
When you use a DIY online will service or post office will, you don’t get any advice on issues like:
- Strategies you could utilise if you are concerned about people challenging your will
- Avoiding unnecessary taxes and duties for assets or beneficiaries located overseas
- Assets in trusts and companies (again – not covered by your will!)
- Taking advantage of legitimate and effective structures available to optimise family law protection, bankruptcy protection and tax minimisation for your loved ones (for example, a testamentary trust)
While a comprehensive estate plan might require you to invest a few thousand dollars now, if any of the above happens it can cost your loved ones tens (if not hundreds) of thousands to fix. Not to mention the added burden of the emotional stress on your loved ones and the potential for relationships to be destroyed.
Spending a little now saves a lot down the track!