- Do you know what happens to your assets if you die without a valid Will?
- Do you know what happens if your executor dies before you do?
- Do you anticipate that anyone may challenge your Will?
- Would you like to protect your beneficiaries inheritance if their marriage fails or they are sued or become bankrupt?
- Would you like to protect your beneficiaries inheritance if they have a mental breakdown, cannot handle money or have a gambling or drug habit?
- Do you want to protect vulnerable beneficiaries, provide ongoing care for disabled beneficiaries and establish special disability trusts?
- Do you want your estate to be administered in a tax effective manner to minimise taxation on inheritance and maximise the benefits for beneficiaries?
If you have any concerns about these issues please read the attached information which discusses Wills.
It is unfortunately true that the two certainties in life are death and taxes. However, we can ensure that the financial assets we have built up over our life are transferred to our loved ones when we die.
A Will is a document which sets out what you want to happen to your assets after your death. Your Will states who is to be your executor. It is your executor who follows your wishes which are set out in your Will and generally look after your estate after you die. Your Will names who you wish to leave something to and what you want to leave to them.
Why have a Will?
Everyone who is concerned about who will receive their assets after they die should have a Will. Your assets can include your home, property, shares, money in bank accounts, superannuation, life insurance and personal possessions including jewellery and furniture.
What happens if you do not have a Will?
If you do not have a Will you have no control over who inherits your assets after your death. The Succession Act sets out a strict list of the beneficiaries of an estate when someone dies without a Will. This strict list might not be what you want.
What assets are not included in your Will?
There may be a large number of assets which are possibly "non-Will" assets including:
- your house owned as joint tenants with your partner;
- most superannuation and life insurance proceeds;
- assets held in discretionary trusts;
- life interests, pensions and annuities.
For example if you own your house with your partner as joint tenants then on your death the house will be transferred to your partner no matter what your Will states. The only way to overcome this is to transfer the house to what is called tenants in common. If you own your house with your partner as tenants in common then on your death your share of the house will be transferred in accordance with your wishes which are set our in your Will.
The other difficult area is the question of superannuation. If the trustee of your superannuation fund will not accept, what are called “Binding Nominations” then the trustee of your superannuation fund has discretion as to whom they pay your superannuation benefits to on your death.
What happens if I die when my children are young?
It is common to appoint a close family member or friend to be guardian of your children in the event something happens to you while your children are under 18 years of age. It is important that you discuss this possibility with the close family member or friend before you organise your Will. The appointment of a guardian in your Will is only a guide and is not binding on that person.
What happens if I get married or divorced?
If you have a Will before your are married then the Will will be invalid when you get married. The only exception is if your Will states that it was made in contemplation of getting married.
If you divorce after making a Will then any gift to your former spouse will fail as will the appointment of your former spouse as your executor. The other gifts in your Will will be valid.
If you are separated but not divorced then your Will is valid until your divorce is finalised. It is extremely important that you do a new Will as soon as you separate from your current partner.
How do I leave something to a charity or my church?
We recommend that you speak to a representative of the charity or church you propose to benefit from your Will and ask them if they have any documents setting out how best to ensure that any gift goes to the proper place and for the purposes you wish.
What about my Superannuation?
Usually it is the trustee of your superannuation fund that decides who received your superannuation death benefits. Superannuation assets generally do not form part of your Will. Superannuation is owned by the superannuation fund trustee, who has to act according to the trust deed of the fund and the superannuation laws.
Superannuation law generally requires death benefits to be paid to those beneficiaries that the trustee considers to be most needing of it.
In a standard family situation where there is no antagonism between potential dependants, this situation may not be an issue. However, in a blended family where the deceased may have had previous marriages and children from both marriages, this can lead to potential conflicts between beneficiaries. Also, the control of assets may be in the hands of one family, with the potential for children from the other marriage not factoring in the ultimate distribution. However there are strategies you can put in place to guard against these types of situations.
Can my Will be challenged?
Always remember it is your Will and you have the right to leave your assets to the people you choose. However it is possible that your Will might be challenged if you do not leave assets to these people that the law believes you should leave your assets to. In simple terms you should leave assets to your family except where that family member does not
have needs or has done something to effectively disentitle them to your assets.
This is a very complicated area of the law and we would recommend that you obtain specialize advice if you are considering leaving someone out of your Will.
The Next Step
Preparing a Will or reviewing your existing Will may involve:
- reviewing the method of holding assets - possible conversions from joint ownership to sole ownership;
- reviewing superannuation nominations (however, the final beneficiaries of superannuation are a matter for the trustee of the superannuation fund and any claimants);
- reviewing life insurance policy ownership;
- considering Department of Social Security entitlements;
- considering potential capital gains tax liabilities;
- considering the financial and personal position of proposed beneficiaries.
Failure to undertake this analysis may result in severe unintended consequences if your Will is prepared where you believe the Will will deal with all assets including non-Will assets.
Regular review of your Will and a close association with your financial advisor is essential to ensure that your Will remains appropriate in an environment of changing laws and personal circumstances.
Contact Us Today
Contact RMB Lawyers by calling 1800 681 211, Email or Live Chat if you'd like to speak to one of our Wills & Estate Planning legal experts. Alternatively, Ask us a Question and get a FREE reply within 48 hours by one of our specialised lawyers.