Do you have a will? The importance of ensuring your wishes are fulfilled.

Estate planning is a sensitive area of your personal finances and subsequently one that many Australian’s overlook. A death in the family will always be a difficult time and with many regulations around how your assets can be distributed, it is important you have the arrangements in place to simplify the process and ensure your estate is distributed as per your wishes.  L J Financial discusses the importance of having your estate in order and a valid will.

There are three major estate planning considerations that all Australians need to be aware of when investigating their current estate planning circumstances. They are- your superannuation beneficiary nominations, your estate wishes outside of superannuation and what happens to your estate if you do not have a valid Will.

Estate Planning in Superannuation:
One of the main questions that individuals have when it comes to estate planning is, “What happens to my superannuation fund benefit and monies when I pass away?” The assumption most commonly made is an individual’s will is the vehicle by which the monies from their superannuation are distributed. This is not the case.

With respect to superannuation distributions, the entitlements are known as your superannuation death benefit. Due to the fact that your superannuation fund is a trust, the trustees of the fund generally determine the beneficiaries of the fund. This is usually stipulated in either a binding or non-binding agreement. If a non-binding beneficiary agreement is in place, the superannuation trustee must go through a claim staking process. This means that all relevant people are entitled to your benefit in superannuation, meaning that they may challenge the trustee’s decision and turn the distribution into a long and costly process. A binding death benefit nomination on the other hand binds the trustee of your super fund to follow your wishes and distribute your benefits to those you have nominated. Not all retail or industry funds offer binding death nominations so it is important to check this with your provider. Those with SMSFs will likely have stipulated binding death benefits upon setting up the fund, but one should ensure this is the case.

Estate Planning outside of Superannuation (Will):
This is essentially a document that is written by a testator. In this document you will find specific instructions and wishes in relation to how the individual’s estate is to be distributed. It also may include instructions regarding guardianship of dependents in the unfortunate event of the individuals death. Some areas that you must ensure are completed in the will specifically include, the the inclusion of the phase “Last Will and Testament” and it must be signed.

What happens to my estate if I do not have a valid will?
If you die without a valid will the process falls under what is known as “intestacy”. This means your estate cannot be validly disposed of, which can result in a long and costly process of splitting up your assets. The assets are essentially distributed via a legal formula and therefore may not be distributed as per your true wishes.

In summary, it is always important that you have a valid will and binding death nomination (if possible) in place, regardless of your age or circumstances.







Duncan Brown