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Estate Planning


Your assets should be distributed to the correct people upon your death.  It may not be prudent to leave all your assets to a 15 year old child or an adult child who is facing an imminent marriage breakdown. What can you do to ensure that your assets are protected from 3rd parties and that they are distributed to the right people.

A valid, current will is the cornerstone of any estate plan.

It provides you with flexibility in choosing who should benefit from your assets and how they should benefit. It is important that your Will be kept up-to-date to reflect your current wishes and changing circumstances. This will ensure that your assets are distributed to the correct people. If you do not have a Will when you die, you will die “intestate” and your estate will be dealt with according to State legislation.  Generally, the estate will be distributed between the surviving spouse and children, but not necessarily in equal proportions. Accordingly, your assets may not be distributed to the people that you had intended.

A Will does not necessarily govern all of the assets that you may own or control. It only governs those assets that are estate assets.  Estate assets include all assets that are owned personally by you, including, but not limited to;

  • a share in as assets held as tenants in common
  • shares in a company that are personally owned
  • a superannuation death benefit paid to your estate
  • a right to an asset held under a contract
  • any loans that you have made to others

It is important to note that although a Will provides a direction as to who should receive the assets of your estate, it can be challenged by 3rd parties and the courts have the power to change how the assets of the estate are to be distributed. The following persons are generally able to challenge a Will;

  • a spouse of the deceased, or a former spouse
  • a child of the deceased
  • a dependent of the deceased
  • any creditor of the deceased

Where a claim is likely to be made, it may be prudent to make provision in the Will for the likely claimant. This may avoid a challenge to the Will and the inevitable delays in administering the estate. It may also be prudent to increase the value of the estate by taking out additional life insurance cover to meet any potential legal costs or a payment should a challenger be successful.

This practice is commonly referred to as “asset protection” and is used to help protect your assets from 3rd parties, including;

  • potential challengers to the Will (as listed above)
  • creditors of a beneficiary, including the bankruptcy trustee
  • a spendthrift beneficiary
  • property settlements arising out of the divorce of a beneficiary

The structures commonly adopted to help protect your assets from the above parties include;

  • testamentary trusts
  • assets held in a discretionary trust
  • assets owned as joint tenants
  • superannuation death benefits paid directly to a dependent
  • a life insurance policy on your life owned by a dependent or a Person nominated by you as owner, in favour of another person in accordance with relevant legislation