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Non-estate assets are assets that do not form part of your estate and cannot be controlled by your Will.

What assets are non-estate assets?

Non-estate assets can be;

1. assets that you own jointly with someone; or
2. assets held in trusts and companies;
3. superannuation funds; and
4. life insurance funds

Are jointly owned assets all the same?

An asset that you own jointly, may be owned as joint tenants or tenants in common.

What is a joint tenancy?

In a joint tenancy, when one of the joint tenants dies, that person’s interest in the property passes to the surviving joint tenant, who then becomes the sole owner.

For example, if you own a home with your spouse as joint tenants, upon the death of a spouse, full ownership will automatically revert to the surviving spouse.

What is a tenancy in common?

A tenancy in common means that when an owner of property dies that person’s interest is preserved and passes to the deceased estate.

For example, if you own a property with another person as tenants in common in equal shares, then upon your death, your 50% ownership of that property will flow to your estate, and thus, to your beneficiaries (as set out under your Will).

Will the assets in trusts I control form part of my estate?

No, though there are differences depending on the terms of the trust, the type of trust and the way in which your Will is prepared.

What about a family trust/Discretionary trust that I set up?

If you have a family trust in place, the assets held by the family trust will not form part of your estate. A trust is considered a separate legal entity (separate to your estate) and will continue to be managed by whoever is nominated in the trust deed.

I own a company – can I distribute its assets in my Will?

No. While you may own and direct the company you do not directly own the assets of the company. The assets of the company are owned by the company. The company is a separate legal entity. Your shares of the company may be allocated under you Will and form part of your Estate.

What about a Unit Trust I set up and control?

Unit trusts are similar to companies in that when you die, your units in it will pass into your estate to be distributed according to your Will.

Why is my superannuation and life insurance not in my Will?

While both schemes center on you, they are dealt with under different laws which means they do not automatically form part of your estate. Both are run independently from you and are paid out according to other policies and procedures upon your death.

I’m earning my superannuation – why can’t I put it in my Will?

You can, however, this must be done by validly completing what is called a binding death benefit nomination (BDBN).

Superannuation is not covered by a person’s will. Superannuation monies are tied to a superannuation fund which has a trustee who decides on payments. Unless a person takes positive steps to nominate a particular person to be the recipient of their superannuation funds (by way of a binding death benefit nomination) – then it is left to the trustee’s discretion to decide on the recipient of superannuation funds. A BDBN must be updated every 3 years.

What happens to my life insurance pay out?

A life insurance policy is independent of your Will even if you own the policy. The money from the life insurance policy will generally pass to the nominated beneficiary of the policy (which is stipulated by the policy owner, before their death). If you would like your life insurance paid to your estate upon your death, you can take steps to make this happen by listing your estate as the nominated beneficiary. To achieve this, you must liaise with your life insurer.

So, what can I do?

As you can see, it may be the case that your significant assets do not form part of your estate. Therefore, in designing your succession plan it is important to consider what assets you own and how the assets are owned. This must be properly considered before you begin your estate planning. Mistakes in this regard could have vast consequences for your family. To consider your succession plan please contact our Wills and Estate specialists today so that we may assist you in managing the complexities of your Estate.

If you have any questions or concerns, please do not hesitate to contact us.

Call 07 3035 4077 to speak with our team now