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Should Accountants be Drafting Wills?

Accountants Accountants and Will drafting.

Should Accountants be Drafting Wills?

As an Accountant or Financial Planner what would you do if a client asked you to draft their Will?  Do you know the risks?

Whilst the temptation to be holistic in your services to a client is understandable, this blog will offer some guidance, and identify the pitfalls of engaging in a legal practice which could contravene the requirements under section 12 of the Legal Profession Act 2008 (“the Act”).

Lets start with "Only Legal Practitioners may engage in legal practice under the Act".

Legal practice includes:

“drawing or preparing any deed, instrument or writing relating to or in any manner dealing with or affecting real or personal estate or any interest in real or personal estate.”

The Act imposes a fine of $20,000.00 against those who engage in legal practice when they are not entitled to do so.

Then, there's the legal advice involved in drafting Wills...

Giving legal advice is an integral part of drafting Wills, and anyone attempting to draft Wills must be aware of all relevant legal issues. For example:

  • Willmakers should be aware of the Family Provision Act (WA), and any possible risk that a challenge may be made. This is becoming an increasingly important issue, as family structures are more complicated as people re-marry, enter into de facto relationships, and have children from different relationships. There is High Court authority that a lawyer has a duty to ensure that the client gives consideration to the claims that might be made upon his or her Estate, before giving final instructions. Non-lawyers cannot provide the advice that Willmakers require in relation to this complicated area of law.
  • A Willmaker may require a more complex Will, for example, a Will that establishes a Testamentary Trust. Many clients would like asset protection and are attracted to the greater level of control over the Estate assets that is provided by a Testamentary Trust. Further, many clients do not realise the many benefits of creating a Testamentary Trust, until they have received legal advice.
  • Is it appropriate to include Guardian provisions with regard to minor children? Is the Willmaker aware whether or not those Guardian provisions are binding, and other steps the Willmaker can take to ensure that their children are adequately cared for after their death? This is particularly important if the Willmaker has separated from their spouse, and there are issues about the arrangements for children.
  • Sometimes, a Binding Financial Agreement under the Family Law Act 1975 can provide the security Willmakers are seeking from a Family Provision claim from their former or current spouse. They can also be used by the Willmaker’s children, to prevent the child’s spouse from receiving the inheritance the child will receive. Binding Financial Agreements are complex documents that require experienced Family Law advice.
  • Is the Willmaker aware that Divorce and Marriage automatically revoke a Will? The Will should be drafted to address this common issue.
  • How to adequately dispose of the Willmaker’s personal effects. Often, simple Wills do not deal with personal effects at all, which may not be appropriate nor accurately reflect the Willmaker’s wishes.
  • Has the Willmaker’s Estate been entirely dealt with under the Will? If not, then the Will may fall under a partial Intestacy.

The failure to adequately address the issues noted above could have detrimental effects to the client’s Estate after he or she dies, exposing the Will drafter to a potential claim for negligence from the client’s beneficiaries, in addition to the penalties imposed by the Act.

If you have drafted a Will and are found to have been negligent, there is also a risk that your Professional Indemnity Insurance will not cover you.

Therefore, if you’re not a Legal Practitioner and you are contemplating drafting Wills for your clients, stop and reconsider. Your clients will receive a better outcome if you work collaboratively with a Lawyer, to ensure your clients are being properly advised about all of the relevant issues. Please contact us if you require further information.

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Tuesday, 11 December 2018