What assets are covered by your Will?
Unfortunately, many people assume that a Will is enough to cover everything. There are certain types of assets which require consideration outside of the Will.
When your Will Lawyer in Brisbane considers the types of things that are covered by your Will, we are asking: What flows into your estate? The following are assets that will not pass to a person’s estate when they die.
Assets Jointly Owned
When a person holds property with another, they can do so as “Joint Tenants” and “Tenants in Common”. Holding the property as Joint Tenants means that upon death, that person’s share in the property will pass to the other automatically. It will not flow into the deceased person’s estate. Holding the property as Tenants in Common allows the co-owners to distribute their share according to their Will. For more information on this difference and how it could apply to you, read our article on the subject by clicking here.
Superannuation
Funds held in a Superannuation Fund will not usually form part of a deceased estate. The funds are held by the Superannuation Fund as trustee.
Superannuation Funds will usually allow its members to nominate beneficiaries, who will receive the Superannuation benefit upon a member’s death. This nominated beneficiary can be the estate of the member. This is called a Binding Death Benefit Nomination, and it is the best way to ensure that your Superannuation goes where you wish upon your death.
If there is no Binding Death Benefit Nomination, then the Superannuation Fund will have to make a decision about where to distribute the benefits, which can delay the process and may end up with a person that goes against your wishes. One other important aspect of Binding Death Benefit Nominations is that many lapse automatically (usually after three years).
Discretionary and Unit Trusts
If an asset is held by a Trust, it may form part of an estate depending on the type of trust. In general, a trust is a separate legal entity and will continue to exist past the death of a Trustee or beneficiary (subject to the terms of the trust).
Units in a Unit Trust, or shares in a Trustee company will form part of the estate and can be distributed in accordance with the Will.
It is important to be aware of the particulars of any Trust so that it will operate (or be wound up) in the way you wish if you die.
Life Insurance
When setting up a life insurance policy, the insurer will request that the person nominate a beneficiary to receive the life insurance benefit upon death.
The nominee may or may not be your estate. Whatever your wishes, they should be known to the insurer.
One of the reasons that having an Estate Planner is so important, is that completing a Will is usually not enough. For holistic and tailored advice, call us for a free 20-minute chat, or book a consultation by clicking the button below.