It’s quite common for people to think estate planning starts and finishes with a will.
And while that may have been a reasonably correct assumption 30 years ago, times have definitely changed.
First of all, family structures have become increasingly complex, and a standard will often lacks the subtlety to deal effectively with this.
Secondly, many people’s financial arrangements have become more sophisticated.
For example, the vast majority of most people’s assets are ineligible to be allocated via a will.
How is that possible you may ask?
Well, for a start, many people own physical property as ‘joint tenants’ with someone else. So when one person dies, ownership automatically flows to the other owner, irrespective of what a will may say. The same is true for bank accounts and investments owned jointly.
And as for superannuation, the trustee of the fund determines how super is allocated – and what’s stated in a will cannot override this.
Apart from this, many people own other assets in trusts (including self managed super funds), and what happens to these assets is decided by the terms of the Trust Deed, and overseen by the trustee.
Certain shares in private companies may also contain provisions that restrict whether ownership can transfer to another.
And assets you may own as part of a business partnership also cannot be reallocated by a will.
So it’s important to be aware that if most of your assets are owned in any of the ways described above, your will may have minimal impact in determining how your wealth is distributed.
Contested wills on the rise
A recent article in the Sydney Morning Herald suggests that contested wills are on the rise.
While there are a variety of perceived grievances that contribute to this trend, the article notes that, “When wills are challenged, there is a high rate of success. About three-quarters of contested estates result in a change of distribution.”
While it’s impossible to make a will completely watertight, having expert advice from a lawyer experienced in this area is one way to reduce the likelihood of having your instructions overturned or modified.
Drawing on the expertise of Mike Fitzpatrick, Principal of Clarendene Pty Ltd, a law practice specialising in estate planning, we can help you assess whether your will is ‘up to scratch’.
Mike works closely with 5 Financial and can review your will (or create a new one) as part of a comprehensive estate planning service.
Your initial consultation with us is at no cost or obligation.
Please contact us to learn more or to schedule your complimentary appointment.