{"id":77519,"date":"2024-10-21T14:30:52","date_gmt":"2024-10-21T03:30:52","guid":{"rendered":"http:\/\/propertyupdate.com.au\/?p=77519"},"modified":"2024-09-18T13:28:13","modified_gmt":"2024-09-18T03:28:13","slug":"will-any-will-do","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/will-any-will-do\/","title":{"rendered":"Will any will do?"},"content":{"rendered":"

While it's always advisable to have a will, not every will is created equally.
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Amateur wills are generally not worth the paper you've written them on, so you should always use a lawyer who specialises in the preparation of wills.<\/a><\/u><\/p>\n

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Fundamentally, the transfer of assets held in your name (which are also called estate assets) needs to be via a will.<\/p>\n

But there could be significant tax or legal ramifications if your assets are simply transferred from one person's name to another's after you have died.<\/p>\n

This is because assets transferred to the next generation in that person\u2019s name can be exposed to litigation, and family law court orders and, if income or capital gains are distributed to children under 18, a 60 per cent minor tax rate is applied on a sliding scale down to 45 per cent.<\/p>\n

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Note: <\/span> Most people aren't happy to expose their loved ones to these risks or costs, which is why they opt to use a different type of will entirely. <\/p><\/div><\/div><\/strong><\/p>\n

The type of will I'm talking about assists with passing control, and not ownership, of your assets.<\/p>\n

This is achieved via a testamentary trust<\/strong>, which will move the assets to the trust as dictated in your will, and then the appropriate person put in control of the testamentary trust via a company trustee.<\/p>\n

Many people already control assets as opposed to owning them In other words the assets are not in their own names but held in their superannuation or in trusts.<\/p>\n

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Note: <\/span> Since you don\u2019t \u201cown\u201d these non-estate assets they can\u2019t be included in your will and as such need to be passed on with other documentation. <\/p><\/div><\/div><\/strong><\/p>\n

Typically, your superannuation is passed via something called a binding death nomination <\/strong>which is a very technical and legal document so must be properly prepared.<\/p>\n

If it's not professionally prepared, it will just be a non-binding declaration and the trustees of the super fund or your self-managed superannuation fund can decide who gets your members' death benefits instead.<\/p>\n

Passing control of your trusts is also achieved outside of your will by different documentation such as a memorandum of wishes.<\/p>\n

Why you also need a power of attorney<\/h2>\n

Another important document is your power of attorney<\/a>.<\/p>\n

Most people don't understand that their will only comes into effect on death so if you have an accident and end up in a coma or suffer dementia then your will doesn't help your current situation in the slightest.<\/p>\n

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Note: <\/span> Instead, you will need a power of attorney, which can be limited to specific items or very broad. <\/p><\/div><\/div><\/strong><\/p>\n

A power of attorney is someone who is legally entitled to make decisions on your behalf if you are incapacitated, including financial and health matters, so make sure you choose wisely.<\/p>\n

In the event of a large estate or blended family, the will documentation will be more detailed and complex.<\/p>\n

Many families, who have children with other partners or want to look after prior spouses or even to split pre- and post-assets from a new relationship, need additional advice to help reduce the risk of dispute or to ensure their wishes are carried out.<\/p>\n

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Tip: <\/span> No one likes to think about their death, let alone talk about it, but it's essential to discuss your will and the spread of wealth with your family. <\/p><\/div><\/div><\/strong><\/p>\n

That way they know what, how and why you are doing what you are doing in your will and other documentation and it's also important to bring your spouse and children into decision-making prior to your death so they better understand how you operate.<\/p>\n

By doing this, it should have the effect of a smoother financial transition, which in itself should assist in not diminishing the value of your assets.<\/p>\n

You should also look at how any debts (actual or guarantor) will be managed or changed on your death so that assets can be retained and banks don't close a loan when they see a change of ownership or control.<\/p>\n

When reviewing your (and your partner's if you have one) will with your lawyer you should look at a number of other items including the following:\u00a0\u00a0<\/strong><\/p>\n

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  1. Will<\/li>\n
  2. Power of attorney<\/li>\n
  3. Enduring power of attorney<\/li>\n
  4. Memorandum of wishes<\/li>\n
  5. Guardianship<\/li>\n
  6. Testamentary Trust for your child<\/li>\n
  7. Binding death nominations<\/li>\n<\/ol>\n

    There's a saying that you should start with the end in mind and this is equally relevant for investors who intend to build a significant portfolio of assets.<\/p>\n

    By protecting your assets via the most appropriate will, you are passing on your wealth to the next generation who will likely live better lives because of it \u2013 and we all want that for our families, don't we?<\/p>\n

    You may also want to read the first article in this 2 part series: Do I need a will?<\/a><\/em><\/strong><\/p>\n