Updated: Oct 13
Many people think that creating a Will is all that’s needed to ensure their assets are distributed according to their wishes.
However, estate planning is much more than just preparing a Will. A comprehensive approach ensures that all of your assets, those covered by your Will and those that aren’t, are handled correctly, protecting your loved ones and reducing the risk of disputes.
In This Article:
Understanding Estate Assets & Other Assets
It’s a common misconception that your Will automatically covers everything you own. Some assets bypass your Will entirely. Understanding the distinction between estate assets and other interests is a crucial first step in creating a robust estate plan.
Let's explore some common examples we see with our clients every day.
Joint Tenancies
Assets held as joint tenants automatically pass to the surviving owner, regardless of what your Will states.
Common examples include:
Real estate
Bank accounts
Shares in a company
If you want your estate to handle the assets, you will need to change a joint tenancy to a tenancy in common, which allows your share to be distributed under your Will. Depending on the asset being transferred, you will need to consider any taxation or transfer duty implications.
For example, let's say two siblings, Tom and Jessica, co-own an investment property as joint tenants. Tom wants his share to go to his children rather than his sister. By severing the joint tenancy, he can now include provisions in his Will to give his share to a beneficiary of his choice. If they chose not to sever this joint tenancy, his share would automatically be transferred to Jessica upon his death.
The Benefits Of Joint Tenancy
However, joint tenancies can also be a useful estate-planning tool when used strategically. They often simplify the transfer of assets between spouses or business partners, allowing property, shares. or bank accounts to pass automatically to the surviving joint owner without lengthy legal and administrative processes.
This can provide peace of mind, particularly when immediate access to assets matters, such as covering living expenses or supporting ongoing business operations.
Additionally, joint tenancies can reduce the size of your estate for legal and tax purposes, potentially minimising the risk of disputes among heirs or beneficiaries and creating a more straightforward path to distribute the remaining estate according to your wishes.
When discussing the financial implications of your estate planning and the structure/s of your assets, we always recommend you speak with a financial advisor and/or accountant to determine the best path forward for you from a financial standpoint.
Family Trusts
You can't simply leave assets in a family trust to someone under a Will.
Your estate plan must address:
Control of the trust
Shares in a corporate trustee
Money owed from the trust
We recently had a client who controlled a family trust and had significant distributions owed to them at the time of their death. The client left clear instructions appointing their eldest child as the new trustee and outlining how the distributions should be handled. Without this, their beneficiaries might have faced lengthy legal processes to access the trust’s assets.
Family trusts provide flexibility while you are alive, but that flexibility can cause complications after death if control isn’t addressed in your estate plan. If you're considering establishing a family trust or other complex arrangement, we recommend speaking with our senior estate lawyers about the best strategies for you.
Company Shares
Shares in a company are usually distributed according to your Will.
Important considerations include:
Company constitutions may contain unusual share rights or restrictions on transfers after death.
Shares held jointly may automatically pass to the co-owner (as noted above).
A shareholders’ agreement can specify what happens to shares on a shareholder’s death.
Superannuation
Superannuation does not automatically form part of your estate. For an in-depth look at how to handle superannuation, we recommend reading our in-depth article.
Your Superannuation Trustee may pay benefits to:
Your spouse
Your children
Financial dependants
A person you live with
Your estate
Binding Death Benefit Nominations let you specify exactly who receives your superannuation. For example, if Samantha wanted her superannuation to go to her grandchildren rather than her children, she could do so. She completed a binding death benefit nomination to ensure the trustee followed her instructions. Without this, the default rules might have paid the benefit to her children.
Life Insurance
Life insurance proceeds may or may not be dealt with under your Will, depending on ownership and beneficiaries:
Owned by you with no nominated beneficiary: proceeds follow your Will.
Nominated beneficiary exists: proceeds bypass your Will.
Held within superannuation: proceeds follow superannuation rules.
If your life insurance is held through your superannuation, speak with your superannuation company about its policies and procedures.
Other Important Considerations
Estate planning is not only about distributing assets but also about minimising disputes and other financial considerations.
In addition to a Will, you may want to consider putting in place the following estate documents:
Enduring Powers of Attorney (EPOA) An EPOA lets a trusted person (attorney) make health and/or financial decisions on your behalf if you are unable to, or at a specific time.
Advance Health Directives (AHDs) An AHD lets you record your preferences for medical treatment and healthcare decisions if you become unable to communicate or make decisions for yourself in the future.
Testamentary Trusts A Testamentary Trust is a type of trust created through a person’s Will that comes into effect only after their death. It holds and manages assets for beneficiaries according to the instructions set out in the Will. Testamentary trusts are commonly used to protect assets, provide for minors, or create tax-efficient strategies for beneficiaries.
Charitable Gifts
Charitable gifts are provisions you include to leave a portion of your estate to a charity or non-profit organisation after your death. They can include specific bequests (a specific asset such as cash, property, shares, or artwork, etc.), a percentage bequest (a fixed percentage of your estate), or a residual bequest (after all other beneficiaries and expenses are paid or accounted for, the remaining part of your estate goes to a charity).
Take Action Today
At RHC Solicitors, we aim to simplify estate planning, help you understand your options, and provide tailored advice to achieve the right outcome for your unique circumstances. Whether you’re welcoming your first child, managing a growing family, or planning for the future of your business or assets, now is the time to take action.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current, and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication are those of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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