Nick Bruining: Citizen’s Advice Bureau of WA reveals pitfalls of mistakes when preparing or updating your will

There’s not much about estate planning that WA’s biggest will and probate preparation organisation hasn’t seen.

From outdated wills written on scraps of paper through to greedy family members, the Citizens Advice Bureau of WA deals with thousands of issues every year.

The organisation is partly funded by the State Government but also relies on volunteers and fees paid by the general public. In limited circumstances, it can assist with some issues at no or minimal cost.

Your Money asked the bureau’s chief executive Dion Dosualdo to identify the main issues he sees on a regular basis.

“There’s no single stand-out issue, but one of the more common problems relates to outdated or poorly drafted wills,” Mr Dosualdo said.

Many don’t realise that a marriage normally negates a previously prepared will unless it was completed in contemplation of the relationship change.

Equally, specified assets that have been disposed of, an executor or beneficiary that has died or even additional children that have been added to the mix are often overlooked in home-made wills.

“The bottom line is that you should review your will when any major event occurs in your life,” Mr Dosualdo said.

“A well-drafted will is also going to include certain contingencies which can flag some of the more common things that can happen through life.”

While CABWA won’t get involved in family disputes and “inadequate provision” claims, a properly drafted will can head-off potential areas of contention.

For example, a will that just precludes a child from receiving any portion of the estate without explanation is potentially easy pickings for an aggrieved family member and their lawyers.

CABWA suggests wills that include an “explanatory statement” or “reasons” for a particular exclusion may fend off a challenge, but even that’s not a guarantee.

Also, people accepting the role of executor need to think carefully about the responsibilities that come with the job.

“I’m not sure people realise that as an executor, you are personally liable for the proper completion of the will’s instructions and the assets of the estate, up until they are distributed,” Mr Dosualdo said.

That includes the collection, potential sale, protection and distribution of assets. The executor is also required to deal with people the deceased owed money to and any tax returns.

Mr Dosualdo said the current property crisis is also creating issues.

“We’re seeing an increase in disputes between siblings where different parties have a different view on what to do with the family home,” he said.

“One might want to sell, while others may want to hold onto the place.”

This can be particularly problematic when one child may have moved back home to care for their parent who has since passed away.

Problems with granny flat arrangements are also increasing, but they are not necessarily linked to a person’s death.

Couples combining resources with a parent to establish a granny flat arrangement has become a popular strategy adopted by some families.

These arrangements are often fuelled by Centrelink concessions which effectively allow a senior to contribute substantial sums of money without triggering Centrelink’s gifting rules.

If the relationship between the couple breaks down, the parent can effectively be left “out in the cold”.

“Once the dust has settled, you might find that there’s not enough money left to fund a new home for the parent,” Mr Dosualdo said.

“People need to seriously think about a number of ‘what-if’ scenarios before they jump into these arrangements.”

He said the value of properly thought-out and prepared documents including wills, enduring powers of attorney and guardianship shouldn’t be underestimated.

“They may cost a few dollars to prepare through lawyers or other organisations, but view it as a type of insurance premium. If things go wrong, it could be money well spent,” he said.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association