KATE AND LEO

Kate and Leo are married.

They own a home in McKail as joint tenants.

They have a home loan with Bankwest.  They owe $450k on the home loan.

They prepared their Wills using a Will kit they bought at the post office.

In their Wills, they give their wealth to each other, and then when both passed away give their wealth to their 2 young children equally. 

They appointed an Executor they trust and a guardian for their young children.

They also signed a binding death benefit nomination for their super funds, nominating each other.

They put their Wills away and receive confirmation that their nomination is valid.

Leo dies from a car accident.

Kate, after looking at the Supreme Court website for advice on probate etc, finds it too challenging and sees a lawyer.

The lawyer assists Kate with transferring the home to her name – via a Survivorship application.

However, Kate has also inherited a debt.  $450k in fact.

Kate is given Leo’s super of $80k and life insurance of $250k.  This isn’t enough to pay in full the $450k debt.  She is left with a debt of $120k.

Kate must refinance with Bankwest.  She has two young children, aged 6 and 3 respectively.  She is a full time mum.  She will have to return to work to repay her home loan and place the children in daycare/after school care.  There are no places for her children in Albany. 

Kate must rely on her family to take care of the children, while she repays the home loan.  She also must pay all the bills on her own – which is a stretch to the budget.  She relies on her parents for a loan to assist her.  All the while grieving the loss of Leo.  Imagine if she didn’t have family in Albany to help with her children?

Please don’t be like Kate and Leo.

As part of our initial strategy meeting at Great Southern Wills, we will look at your outstanding debts and advise accordingly.  In this case, it may have been an answer to increase Leo’s life insurance policy to repay the home loan in full so that the mortgage is discharged and the house is given to Kate unencumbered.  Leo would also consider increasing his life insurance policy to provide for those extra bills.  In this case we would have referred Leo and Kate to a financial adviser.

Photo: Kate looking at ways to make more money to raise her family and pay bills

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The Law Has Changed

An update has occurred to Western Australian Law changing what happens if someone dies without a will.

These changes came into effect after March 30th 2022.

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