Recent report on will making and contestation in Australia

A number of investigators recently published an interesting report, Having the Last Word? Will making and contestation in Australia

The report discusses findings from five major research studies, including:

  • telephone interviews with 2,405 adults;
  • a review of 215 cases involving estate disputes;
  • a review of Public Trustee files involving disputes;
  • an online survey of practitioners who draft wills; and
  • several dozen in-depth group interviews.

I enjoy reading reports of this nature, because it provides practitioners with an opportunity to get a birds-eye view of will making and contestation patterns. It's impossible for a practitioner to get this perspective, no matter how experienced.

Some noteworthy points were:

  • Most (59%) Australians have a will. This figure is much higher than many other publications suggest - most commonly I see the figures 40% to 50%.

One nuance which is often ignored but that this report clearly notes is that age plays a large part with respect to whether someone has a will or not. For people aged 70 and over, 93% have a will, whereas only 35% of people under 30 with a financial dependant had a will. (I imagine the figure is even lower for under 30s without financial dependents.) 

Also, "Not all wills reflect current intentions and/or circumstances". For example, I could say that I do indeed have a will. But it might have been drafted 25 years ago and be completely divorced from my current circumstances and wishes. So 59% doesn't translates to 41% of people needing wills - the percentage of people who need new wills is likely to be much higher.

  • "Wills are primarily used to distribute assets. Having a will to nominate guardians, choose executors, and/or clarify funeral arrangements is undervalued." The report spends some time discussing this important point.

Although you could argue that from a strictly legal sense, the purpose of a will is primarily to distribute assets, estate planning is most effective when it's considered from a broader perspective. Think: values rather than valuables.  

  • The majority of wills provide for equal shares for children - without regard to distributions to children throughout the course of their lives. This is an interesting point and is worthy of reflection. 
  • Only a small number of people go the DIY route for preparing wills. 11% of people with wills used a will kit (whether hard copy or online), and 5% drew up the documents themselves.
  • The "average" procrastinator (ie, person who knows they should prepare a will but hasn't yet done so) is aged around 40, has one or more financial dependents, and possesses an estate valued at less than $500,000. 

The report has a number of findings, and I recommend that interested people read the entire report. 

Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at www.wealthandrisk.nz.

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.