When preparing a Will, one of the most common questions people ask is, “Can we keep it simple? I just want a one-page Will—can we delete these extra powers so it’s all on one page?” While a straightforward Will might seem appealing, the reality is that skipping out on certain powers for your executor can lead to complications down the line. But why is that?
In essence, if you don’t explicitly grant additional powers to your executor in the Will, the executor will be limited to the powers specified in the Trustee Act 1925 (NSW). This Act outlines what executors can and can’t do when administering your estate. For instance, if you don’t include a “power of sale” in your Will, your executor won’t be able to sell any of your property without the consent of your beneficiaries—unless it’s absolutely necessary to pay debts. This may sound fine in theory, but the reality is that families don’t always agree on these matters.
What Happens If I Don’t Grant Powers?
Imagine a scenario where your executor needs to sell a property in order to distribute the estate. Without the “power of sale” in the Will, the executor may need to go through the time-consuming and costly process of applying to the Supreme Court of NSW to gain the power to sell the property. This not only increases legal fees and court costs, but also delays the administration of the estate.
Consider a situation where one of the beneficiaries, John, wants the family home for himself, while his sibling Sarah has an equal claim to the house. If the Will doesn’t give the executor the power to transfer the house to John, they’d need to get Sarah’s consent or possibly even go to court to get permission. This can drag out the estate administration process and cause tension between family members.
Scenario 1: The Power of Appropriation
If the Will includes a “power of appropriation,” the executor can transfer the family home to John, in part satisfaction of his inheritance. This makes things easier by avoiding the need for Sarah’s consent or court intervention. Not only is the transfer smoother, but it also ensures a nominal transfer duty (previously known as stamp duty) applies, which is more cost-effective than if the transfer were disputed.
Scenario 2: When the Estate is Larger Than Entitled Shares
Let’s take the same family, but in this case, the family home is valued at $2.5 million, and the term deposits are worth $2 million. If John wants the family home but it exceeds his share of the estate, he can try to negotiate with Sarah to modify the Will. However, Sarah might not agree. If she doesn’t, John could be forced to pay higher transfer duties—on half the value of the home that Sarah would have received—further increasing costs. This situation could have been avoided if the Will had included an “option to purchase” clause for John, allowing a smoother transaction and a much lower duty payment.
The Big Picture: Simplifying Might Cost More in the Long Run
While a simple, no-frills Will might feel easier and quicker, it can actually make the executor’s job harder. The additional powers like the “power of sale” or “power of appropriation” can save both time and money by giving your executor more flexibility. In complex estates, having these powers in place ensures that your executor can carry out your wishes without unnecessary delays or disputes.
In conclusion, while it might be tempting to streamline your Will to keep it short, including additional powers for your executor can make the estate administration process smoother, faster, and more cost-effective. A well-drafted Will tailored to your unique circumstances not only helps your executor manage your estate more effectively, but it also reduces the risk of family conflict and unnecessary legal costs down the line. So, when it comes to your Will, don’t shy away from granting your executor the necessary powers they need to do their job effectively. After all, they’re the ones tasked with fulfilling your final wishes.