The first in a short series about Wills: how to, what to, what not to, and why you should
Nobody likes thinking about death. Perhaps that is because most of us (estimated at 90 percent!) haven't made a will. If you die without a will (known as dying "intestate") , you will leave costs and complications for your loved ones and sometimes a "gift" of thousands of shekels, pounds or dollars to the State.
Anyone with assets, family or close friends should make a will. It is especially important if you are not married to your partner, because the law does not accord partners the same automatic rights of inheritance as spouses. It is also vital if you have minor children as you can nominate guardians to take care of them.
It is advisable to use an attorney to draw up a will rather than trying to do it yourself, through an online site. It is not simply filling out a form! You will more than likely need professional guidance, even though you may think that your situation is fairly uncomplicated.
A straightforward will can be drafted after a one hour session. It should be ready to check and sign within a week or so of your visit. Attorney’s fees range from NIS2,000 to NIS 5,000. ’Mirror wills’ – two reciprocal wills made by a couple – cost less than two standard individual wills.
Make a list of your assets and liabilities and their approximate values. Include your property, investments, savings, insurance policies and pensions.
Decide and make a list of your individual bequests: who gets what, how it should be divided (if needed); donations, gifts etc.
Consider the possibility of appointing executors: In Israel, it is unusual to appoint executors unless there is substantial property to administer. If that is the case then it is preferable to appoint an attorney as executor because he or she has the necessary experience and knowledge of how to handle an estate. Executors fees are fixed by the court and usually amount to 4% of the estate .
In an ideal situation a will should be updated every five years or so or whenever your circumstances are changed by a significant life event – such as marriage, divorce or death in the immediate family.
What happens if you don’t make will?
If you don’t make will, your estate will not go in its entirety to your spouse or partner as you would expect. In Israel, your spouse or partner will only get 50 percent of what you’ve left - plus the car and furniture. Your children get the rest equally divided between them. Which is fine, if you trust your children not to start bickering and contesting their share of the inheritance - a situation which unfortunately happens quite often!
After your death, your children can waive their inheritance in favour of your spouse or partner, but they are not obliged to do so and that will obviously depend on the relationship between them and your spouse or partner!
Perhaps you have remarried and you have children from your first marriage. Do you think they will willingly give up their share in favour of any half- or step-brothers or sisters? (Section 11a., Succession Law 1965). You should take into account that where there is no will, if the child is in financial difficulties - or possibly even facing bankruptcy - and wishes to renounce his or her inheritance to avoid creditors getting their hands on the assets, the court will disallow and revoke any renunciation on their part as being an unlawful preference.
A pretty piece of parchment...or a whole lot more?
Another factor to take into account is the “Ketuba”. Do you remember that beautifully crafted piece of parchment that was signed under the chuppah? Well, the husband actually signed a legal contract - in fact handing his beloved an open cheque which may become payable on his death or, in certain situations, even divorce. Do you have any idea what the value of that Ketuba is today? Here's a heads-up - depending on whether you are are husband or wife: it constitutes a debt payable (if demanded) before distribution of the rest of your assets. You should take that into account when making your estate arrangements (Section 104a Succession Law 1965)
Perhaps you also remember when you were single and signed into the company pension or insurance plan? You were asked who your beneficiaries are...and you nominated your parents. Then you entirely forgot about. Later you got married and had kids. The bad news is that the money in the fund isn’t going to your partner and/or children. It’s going to your parents and if they no longer alive, then to their beneficiaries - including your brothers and sisters and anybody else they have named. (Section 147 Succession Law 1965). I suggest you check it out!
These are just a few simple examples of why you should make a will and seek professional guidance. The very act of sitting down and collating information about your assets, prior to drawing up a will, is in itself, beneficial. You may recall that you have an old bank account somewhere in England- but that doesn’t mean to say your kids know about it!
Think of your family and act responsibly. Take some time and give me a call.
I offer a substantial discount for people wishing to create an Enduring Power of Attorney and making a will simultaneously!