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Retirement

1 in 2 Aussies with a mortgage doesn’t have a will

  • July 02 2020
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Retirement

1 in 2 Aussies with a mortgage doesn’t have a will

By Cameron Micallef
July 02 2020

Despite property being the biggest investment Australians make, only 52 per cent of mortgage-holders have a will, new research has found.

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1 in 2 Aussies with a mortgage doesn’t have a will

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  • July 02 2020
  • Share

Despite property being the biggest investment Australians make, only 52 per cent of mortgage-holders have a will, new research has found.

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The findings from comparison site Compare the Market, which surveyed 1,002 respondents, showed that 48 per cent of Australian mortgagors do not have a will, which could put the people who were intended to benefit from the mortgagor’s assets at risk of not receiving what was intended for them.

The comparison service asked the 519 respondents with a will at which life stage they drew up the legal document. Nearly a third (30 per cent) said they arranged their will around the time of home ownership.

Specifically, 15 per cent arranged a will when they purchased their first property, while another 15 per cent did so between one and five years of buying their first property, and 13 per cent did so more than five years after buying their first property.

“This suggests that buying one’s first home and securing a mortgage is a significant milestone, understandable with the average Australian mortgage sitting at $384,000,” the comparison site said.

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The survey also revealed that those aged between 18 and 40 have been motivated to get a will after purchasing property rather than entering a live-in relationship.

In recent years, 55 per cent of first home buyers have been home owners under the age of 35. A quarter of those aged between 18 and 29, and 24 per cent of those aged between 30 and 39 made a will around the time they purchased their first property.

Nearly a third or 31 per cent of mortgagors under the age of 30 already have a will.

Spokesperson Abigail Koch said: “While the life stage at which we organise a will is an individual decision, the data shows that a property purchase or extension of their family are the major reasons mortgage-holders have organised this important legal document.

“Those who don’t have a will could leave their assets open to contestation by family members seeking a greater share of their estate. Each state in Australia exercises different laws around wills, and how assets are distributed when there is no will in place.”

One in six respondents, or 15 per cent, said they made a will once they had children, when they were married or when they entered a de facto relationship.

While 23 per cent of those in their 50s said they made a will when they had children, 24 per cent of over 70s arranged a will after they entered marriage or a de facto relationship.

When respondents who don’t have a will were asked why they have not organised it, 61 per cent said they simply have not got around to it, 15 per cent believe they do not need it and 13 per cent believe their assets will automatically go to their partner or family when they die.

Among those over 70, 29 per cent said they have not organised a will because of the cost.

4 factors that could happen if you pass away without a will

1. Your family will get your assetsBut they have no control over the distribution amounts. Forty-six (46) per cent of survey respondents weren’t aware that if you die without a will – called dying “intestate” – then the direct family is automatically entitled to their assets. Specifically, the spouse will inherit the entirety of the assets. However, if there is no spouse, assets will be inherited by the next available relative and distributed equally, which is determined by the state order. This next available relative order is children, parents, siblings, grandparents, aunts and uncles, then cousins.  

2. Your beneficiaries may be required to sell your assets – One in five survey respondents (22 per cent) assumed that when they die, their partner or family members won’t be forced to sell assets for other parties to claim a share. Beneficiaries may make a claim for a larger share of the assets requiring assets to be sold to meet the share. Assets may also be used to pay out liabilities in instances where bankruptcy is declared when there are more liabilities than assets.

3. Someone I may not have chosen could be appointed the guardian of my children when I die – The survey reveals that just 27 per cent of respondents know this to be a fact. If an individual dies and they have children under the age of 18, guardianship is automatically given to the surviving parent. However, if the other parent has died or they refuse to take on the role, the court may appoint a guardian to act jointly with the surviving parent – who may or may not be an individual you would like to be the guardian of your children. If, prior to passing, you sent a letter or text message mentioning the intentions of guardianship in the event of your death, the court may also consider these informal documents.

4. Your family or partner could be taken to court if others believe they should be beneficiaries of your assets – Forty (40) per cent of Aussies think that people who believe they should be beneficiaries of their assets could successfully take their partner or family to court. If an individual dies without a will, similar to point one, each category of succession must be exhausted before moving to the next until an eligible relative is found to inherit the estate, then the process stops. However, individuals may dispute this. It’s important to be aware that if a party chooses to take a family to court, it is often a highly time-consuming and expensive process that is not guaranteed to be successful.


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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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