Estate Planning: What Assets Are Not Covered By Your Will?
When you're
preparing your Will or organising estate planning, it's important you know which assets will and won't be covered - and thus won't be able to be distributed after you pass away. If you list an asset in your Will that can't be shared following your death, your Will won't achieve the intended benefits which you've spent time laying out. Wondering what is and isn't covered by your Will? Read on - we've put together this handy blog with all you need to know.
Co-owned Assets
You might own an asset with another person, either through joint ownership or as tenants in common. Most assets owned in this way are done so on the basis of joint ownership. When you pass away and you own such an asset as a joint owner - think of a co-owned bank account or an investment - your share goes automatically to the surviving co-owner, so it becomes almost as if you never had a share in the first place. If you own an asset through joint ownership and include that asset in your Will, your attempts to distribute the share yourself will fail.
Real estate properties form the majority of co-owned assets, and it will be indicated in the title whether the property is owned by joint owners or tenants in common.
Private Company Assets
If you own a company and have assets this company holds, you won't be able to distribute these assets even if you've requested such in your Will. Why? Even if you own all the company shares and are the only company director, it's the company that owns the assets. It's not your ability, for example, to distribute company property or vehicles because they're not yours. Many business owners forget that even if they use an asset themselves, it might not belong to them in name. If you own shares in the company, however, you do have control over this asset and can freely choose to whom it passes.
Family Trust Assets
If you have set up or transferred assets to a Family Trust, you might think you have control over these assets and can choose to whom they're distributed. But this isn't the case. Assets held in such a Trust are controlled by the trustee. While your Will might be able to control the Trust itself, the assets held in trust can't be distributed by you.
As Family Trusts are usually set up to protect assets or improve a tax situation, there's not always enough thought given to how the Trust and its assets will be controlled after death. It's important anyone who has established a Family Trust obtains advice to confirm who would control the trust after you pass away, to check how it would work, and to make changes if the test doesn't meet your standards.
Superannuation
Superannuation is not considered an asset of your personal estate, and the proceeds may or may not be paid into your estate after you pass away. In some instances, they might be paid to your dependents, completely skipping the estate.
You might have your super administered by a Fund Manager, or you might operate a self-managed super fund. Either your Manager or yourself will be the trustee of the fund.
Life Insurance
Even if you own a life insurance policy, it acts independently of your Will and the proceeds will usually pass to the policy's listed beneficiary, whom you will have chosen before your death. There are ways you can send your life insurance pay-out to your estate; you will need to speak with your insurance provider about listing your estate as the chosen beneficiary.
Preparing Your Will? Masons Solicitors Can Help
Estate planning and Will preparation isn't an easy process, and you want to make sure your assets will definitely go to your chosen beneficiaries after you pass away. That's where
Masons Solicitors can help.
Our team of experienced, friendly legal professionals is on hand to offer advice, help you draft your Will and safely store your important legal documents. Based in Toowoomba, we're on hand to help you achieve the best legal outcomes. Contact us today at
(07) 4639 3116.
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