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Estate Plan Planning Risk Management Wills Deceased Estates Beneficiaries Superannuation Life Insurance Lawyers Queensland

Having an estate plan is more than just having a will

There seems to be a common misconception that having an estate plan is for wealthy people. Wrong. Having an estate plan is for everyone. It is about being prepared, minimising risk and making sure your loved ones receive the benefit of your estate.

Today, there are many factors which influence an estate plan. Simply having a will may not be enough for your estate to pass to your loved ones. Often, the starting point is to determine what estate assets and non-estate assets you own. It is common for mum and dad to think they own a particular asset, only to learn that their family trust in fact owns the asset.

What is an estate asset?

An estate asset is an asset held in your own personal name. Examples of estate assets include real property held in your personal name or an interest as tenants in common, bank accounts, vehicles and shares.

Estate assets are dealt with in accordance with your Will.

What is a non-estate asset?

A non-estate asset cannot be dealt with in accordance with your Will. Non-estate assets may be assets owned:

  1. as joint tenants;
  2. by your self-managed superannuation fund;
  3. by your family discretionary trust;

When dealing with a non-estate asset, your estate plan can often be tailored so that the control of any non-estate assets is passing to your loved ones.

What happens to property owned as joint tenants?

The right of survivorship applies to property held among individuals as joint tenants. This means that upon the death of one of the owners, full ownership of the property will automatically revert to the surviving owner. The property will not form part of the deceased owner’s estate.

In your estate plan, if you do not wish for the right of survivorship to apply, steps can be taken to sever a joint tenancy, so that the property is held as tenants in common. This will ensure that your interest in the property flows to your estate.

What happens to your superannuation?

Superannuation is separate to your estate, therefore, it is not automatically distributed in accordance with your will. Without an estate plan, the trustee of your superannuation fund will decide which dependents to pay your superannuation to. However, with a plan, you can control which dependents your superannuation is paid to, via a binding death benefit nomination. There are strict compliance issues which impact whether a binding death benefit nomination is valid.

What happens to assets held by a discretionary family trust?

Trust property will not form part of your estate as the assets are owned by the trust itself.  Without an estate plan, assets held by these separate legal entities may not pass to your loved ones. With a plan, you can transfer the control of these assets to a specific person. If you are concerned about assets held in a separate legal entity, it is imperative that you have your trust and company documentation reviewed and seek advice on how the transfer can be incorporated into your estate plan

What happens to life insurance?

If you have taken out a life insurance policy to ensure that your loved ones continue to enjoy their lifestyle in the event of your passing, it is important to consider how this policy has been established. If a beneficiary has been nominated on the policy, the life insurer must pay the beneficiary directly, which means that the proceeds will not form part of the insured’s estate.

An effective estate plan means considering and appreciating all aspects of a person’s life. If you have any questions please do not hesitate to contact me.

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The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, Wills, Estates and Probate Lawyers (WEP Lawyers) cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. WEP Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. WEP Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.

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Chloe Kopilovic

Written by—

Chloe Kopilovic

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