Safeguarding your assets upon your death – three ways to leave assets to your beneficiaries
Have you considered what will happen to your assets after you pass away? It’s never easy to think about, but planning ahead can give you peace of mind knowing your loved ones will be cared for when you’re no longer here.
There are several ways to leave your assets to loved ones after you pass away. However, choosing the right method for you and your circumstances can be challenging due to varying laws and mechanisms. For instance, did you know that certain assets such as your superannuation do not necessarily form part of your estate and may be dealt with separately.
Below are three possible ways that you can leave various assets to your loved ones or nominated beneficiaries:
1. Wills and other documents purporting to your testamentary intentions
In a will, you can decide how you distribute your estate to your loved one or chosen beneficiaries. Three ways of dividing your estate include:
1. Leaving specific bequests (gifts) to specific people or organisations. For example: you may want to leave $50,000 to your niece; the motor vehicle that you own when you die to your nephew; and $5,000 to a charity.
2. Leaving the residue of your estate – whatever is left once any outstanding estate liabilities have been paid to specific people or organisations.
For example, if you have three children, you may wish to divide the residue of your estate into three (3) equal parts and direct your executor to distribute the residue of your estate equally between your three children.
3. Setting up a testamentary trust in your will so that the intended beneficiary cannot access the funds immediately, by ensuring that certain measures and protections have been put in place so that they receive funds at an appropriate age.
It is important that you obtain legal advice about which option best reflects your desired outcome. Your Streeterlaw Wills and Estates team would be happy to discuss your options with you.
2. Inter vivos family trusts
Your family may have a family trust, however, the capital or income of the trust does not necessarily fall within the ambit of your estate.
It is important to review the terms of your family trust deed to determine who the beneficiaries are and where the trust funds will go, once you pass.
Furthermore, it is important to consider how the trust is intended to operate after your passing, including who will take over your role in the trust i.e. the Successor Appointor or whether it will be wound up.
3. Non-lapsing Binding Death Benefit Nomination (“BDBN”)
Making or updating your binding death benefit nomination for either your self-managed superfund or an industry superfund can be an effective estate planning document. The purpose of a BDBN is to request that your superfund pay your death benefit to the intended person or people.
Section 59(1A) of the Superannuation Industry (Supervision) Act 1993 (“SIS Act”) is an enabling provision which commonly provides for funds held by a member to be paid on the member’s death in accordance with a binding nomination. The governing rules of the fund may, however, stipulate requirements that are more restrictive.
How we can help
The Wills and Estates team at Streeterlaw would be pleased to discuss your estate planning options with you, specifically in light of the non-exhaustive options listed above.
Please contact us on (02) 8197 0105 or by email at contact@streeterlaw.com.au to discuss how we can help you with your estate planning or answer any questions about estate planning.
