Estate planning can be daunting. If you are not sure where to start, the following are some things to think about.
What can you give away in your will?
You can only give away assets you own personally. Assets that form part of your estate include real estate, bank accounts, investments and other assets in your sole name.
Not all assets that you have an interest in form part of your estate, including:
– assets held jointly with another person;
– assets in a family trust; and
– superannuation benefits (unless paid to your estate).
Appointing an executor
Your executor’s responsibilities include arranging your funeral, identifying assets and liabilities, obtaining a grant of probate, calling in assets, paying debts, finalising your tax affairs and distributing your estate in accordance with your will.
You should choose someone who can take on these responsibilities, and who you trust to act in the best interest of the beneficiaries.
Making specific gifts
You can make specific gifts in your will, such as leaving a personal or sentimental item, cash gift, or a specific asset to a particular beneficiary.
How will your residuary estate be distributed?
Your residuary estate is the assets that remain after your funeral, debts and taxes have been paid, and any specific gifts have been made.
Your residuary estate can be distributed between family members, friends or charities in any proportions you choose.
Are there any protections for vulnerable beneficiaries?
If there is a beneficiary with a disability or other vulnerability, your will can provide for the
establishment of a trust for their benefit and protection.
What about a challenge to your will?
The law allows certain eligible persons to challenge your will if they believe that you failed to provide for their proper maintenance and support.
There are strategies available to reduce the risk of a challenge, or the impact of a challenge.
How does superannuation fit into your estate planning?
Superannuation benefits can be paid directly to a dependant (generally being your spouse, a child or a person in an interdependency relationship with you), or alternatively to your estate.
You can give the trustee of your superannuation fund directions about how to pay your
superannuation benefits by making a binding death benefit nomination (BDBN). You can only nominate a dependant or your estate as a beneficiary.
A BDBN which nominates relatives such as a parent or sibling, or a friend, is invalid (unless that person is considered a ‘dependant’).
If you do not have a valid BDBN when you die, the trustee of your superannuation fund will decide how your superannuation benefits are paid, which may not be consistent with your wishes and may lead to disputes between eligible beneficiaries.
Have your circumstances changed?
If you already have a will, but your personal or financial circumstances have changed, you should review your will.
How we can help you
Harwood Andrews has an experienced Wills & Estates team who can assist you with your estate planning needs. Please contact us to discuss your estate planning.
03 5225 5225
