Common issues with DIY Wills explained

Common issues with DIY Wills

The most common issues we encounter include:

• Improper signing and witnessing: Improper signing and witnessing is one of the most common defects we see with DIY wills. They are often not executed correctly. We regularly see wills signed without two independent witnesses present at the same time, or where a beneficiary has acted as a witness, both of which can cause validity issues and add to costs. In one case, we came across a DIY will that had been signed by the two witnesses but not by the will-maker himself, who had inadvertently only written the date on the document. The Supreme Court eventually issued a grant, but only after extensive additional work was completed. It added roughly $20,000 to the usual probate costs, an expense that would have been entirely avoided had the will been properly drafted and executed.
• Ambiguous or inconsistent wording: Everyday language like “my property” or “my possessions” can be unclear, especially when a person owns multiple properties or other assets. We’ve seen cases where families spend tens of thousands of dollars arguing regarding the deceased’s intention behind a few poorly chosen words.
• Dealing with non-estate assets: we regularly see DIY wills attempt to deal with assets that do not automatically form part of the estate, such as superannuation, property held as joint tenants, joint bank accounts, or assets held in family trusts. This can result in inadvertent unequal distributions between family members, which can lead to conflict, and disputes about what the will-maker actually intended.
• Missing instructions: we often see DIY wills that fail to set out the will-maker’s preferences if a beneficiary dies first, or if a named executor is unable or unwilling to act. Others do not deal effectively with digital assets, such as cryptocurrency and online social media accounts, leaving families with no authority to access or manage them. It’s also common for parents to overlook appointing a guardian for minor children, which can lead to confusion or disagreement about who should care for minor children.
• Unclear or ineffective residue clauses: The “residue” clause (which deals with everything left over in the estate after specific gifts have been made) is frequently omitted or vaguely described in DIY wills. The residue includes items and funds that are not specifically mentioned elsewhere in the will, such as remaining bank balances, shares, vehicles, or household contents. If the residue is not properly dealt with, it can be unclear who should receive the unallocated assets. This often leads to confusion and disputes among beneficiaries, with family members arguing over what the will-maker intended to happen to the remainder of the estate, or alternatively, if the residue clause is missing, a partial intestacy occurs, which means the remaining assets are distributed under default intestacy laws rather than pursuant to the will-maker’s wishes. That can lead to unintended consequences and additional legal costs for the estate.
• No tax or trust planning: DIY will kits don’t incorporate strategies such as testamentary trusts, which can provide significant tax advantages and asset protection benefits for beneficiaries, particularly for minor children or those in vulnerable circumstances. A well-drafted will can allow income to be distributed in a tax-effective way and safeguard inheritances from future relationship breakdowns or financial difficulty. Beneficiaries who inherit via a basic will kit typically miss out on these important benefits.
• Storage and accessibility issues: Storage and accessibility issues are another common problem. We’ve seen DIY wills stored in drawers, filing cabinets, and even glove boxes, and frequently the original is misplaced. When the original will cannot be found, the law applies what’s known as the presumption of destruction, meaning the court may presume the will-maker intentionally revoked the document by destroying it. Overcoming that presumption requires additional evidence and costs. If the presumption cannot be rebutted, probate will be refused, meaning the deceased’s wishes will be ignored. Proper storage, for example, storing the original with a solicitor, can avoid these complications entirely.

These mistakes lead to uncertainty and disputes, often between grieving family members who then need to engage lawyers and go to court to try to “fix” the problems.

Are DIY wills workable for people with simple financial affairs?

It’s a sensible idea in theory, but in practice most people underestimate the complexity of their financial affairs. Even those with modest estates often have complicating factors such as:

• Superannuation that does not automatically form part of the estate;
• Jointly owned assets that pass outside the will, such as joint bank accounts or real estate held as joint tenants; and
• Blended families or second marriages, which frequently lead to wills being contested.

A person might think they are leaving “everything they own” to a particular beneficiary, but if their superannuation or jointly owned home does not form part of their estate, the actual outcome may be very different from what they intended.

DIY wills are easy to complete, but not so easy to get right. In my experience, any money saved upfront is often far outweighed by the legal costs incurred after death, when beneficiaries and family members are left to unravel the problems created by a poorly drafted will.

Some real-life examples

Here are a few recent examples that come to mind:

• A will maker forgot to sign the Will kit. The witnesses saw him write the date on the Will so they thought he signed, however he only wrote the date and nothing more. The Supreme Court eventually issued a grant, but only after extensive additional work was completed. It added roughly $20,000 to the usual probate costs, an expense that would have been entirely avoided had the will been properly drafted and executed.
• A will maker sought to leave assets owned by a family trust to beneficiaries named in the DIY will. The gifts failed because the assets held by the family trust were not estate assets therefore they were not captured by the Will.
• A will maker sought to leave his share of the family home that he owned jointly with his wife to his children via his DIY will because he was separated from his wife before he died. The gift failed because he owned the property as joint tenants with his wife which meant his share of the property went to his wife by way of survivorship and the DIY will was of no effect.  The deceased’s children then had to take expensive action in the Supreme Court of NSW by of making family provision claims to receive a benefit from their late father’s estate.

DIY Wills and tax implications

Choice’s observation is correct. The tax implications associated with estate planning are almost always overlooked with DIY wills. A professionally drafted will can include testamentary trusts, which allow beneficiaries to minimise tax and protect their inheritance from loss due to bankruptcy or divorce. In contrast, DIY will kits often ignore important issues such as the effect of capital gains tax, the tax treatment of superannuation death benefits, and how to structure gifts in a tax-efficient way. These omissions can have a significant financial impact, leaving beneficiaries with less than the will-maker intended.

Final thoughts

DIY wills are marketed as being convenient and affordable, but they often create more problems than they solve. Estate planning is not about filling in blanks; it requires careful thought and a considered strategy to ensure your wishes are clearly expressed and carried out. A will is your final opportunity to protect the people you care about, so it should be done properly.