Not all assets that you have control of during your lifetime will be covered in your will. This commonly occurs by way of separate legal entities such as companies or trusts which cannot be willed to someone as they are an entity of their own. Common assets not included in your Will are:
- Properties owned as a Joint Tenancy;
- Assets held by a company or Trust;
- Superannuation Funds;
- Life Insurance Benefits
The difference between Joint Tenancy and Tenants in Common
When a joint tenant dies that person’s interest in the property passes to the surviving joint tenant, who then becomes the sole owner.
In order to formalise that process, an application known as a “Transmission Application” has to be made to the Land Titles Office. The lawyers at Gold Coast Estate Law can assist you with that application or even do it for you.
If a tenant in common of property dies, the deceased’s interest is captured by the Will and passes to the deceased estate.
Trust Assets
Trust Assets rarely form part of a deceased estate however, it does depend on the type of estate and the nature of the trust.
Existing trusts such as a family trust, will not form part of your estate. A trust is considered a separate legal entity and remains under the control of the trustee. If the deceased was a trustee, then the person known as the appointor will need to nominate a successor trustee.
Company Shares and Unit Trusts
At law, a company is a separate legal person, and has the same ability to own assets as a human being .You cannot will assets owned by the company to another person however, any shares in the company that you own may form part of your Estate.
Units in a unit trust are similar to companies in so far as that when you die, any units owned by you will pass to your estate to be distributed according to your Will.
Superannuation and Life Insurance
The legislation governing superannuation and life insurance death benefits do not allow either of them to be considered to be part of a deceased estate. Superannuation and life insurance are paid out according to the relevant policies upon your death.
You can however nominate your wish for superannuation to be paid into your estate by contacting your super fund and completing what is called a binding death benefit nomination.
If there is no binding death benefit nomination, the trustee of the super fund will need to make a decision as to where the superannuation should be paid. You should be aware that most binding death benefit nominations expire, often after 3 years and will need to be renewed after that time.
A life insurance benefit passes to the nominated beneficiary of the policy as stipulated by the policy owner, before their death. You can list your estate as the nominated beneficiary.
Summary
Because of the various assets structures available, it is common for people not to realise that many of the assets that they have control of are not owned by them personally. This is a very important consideration when approaching estate planning. Any mistake may have dire consequences for your intended beneficiary. Accordingly, we recommend consulting Gold Coast Estate Law for all of your estate planning needs.