FAQs

A Will is a binding legal document detailing your wishes after your death. A Will can be used to appoint guardians for children, as well as bequest money or other assets to friends, family, or organisations (Beneficiaries). An Executor will be appointed to carry out these wishes and requests. To ensure your wishes are followed, it is important to have a valid Will at the time of your death. If you do not have a will, you are said to die ‘intestate’ and will directly control what happens to your assets.  This means assets you wish to give a particular person are not distributed to them. 

If you die Intestate and do not have any living relatives who would receive your Estate, your assets will be paid to the State Government.

When circumstances in your life change it is important to adjust your will. Some examples of changes that often require a revision of your will are marriage, divorce, starting or ending a de facto relationship, children, large asset gains or losses, starting a new business or establishing a company, trust or super fund, the death of a person you had previously appointed as an executor, guardian or beneficiary or a change of laws that may affect your assets,. Regardless of any of these circumstances occurring, you should review your will every two to three years to ensure your wishes have remained the same and that you do not wish to alter the distribution of assets.

It is especially important to have a valid Will when in a same sex relationship. If you die intestate, your partner may not be given the same recognition as those who are legally married under Australian law. This could mean they will not be given a benefit from your estate unless they can establish you were engaged in a de-facto relationship. This can be a costly and time consuming process if your family does not wish to recognise the relationship.

If you recognise your partner in your will, they will be receive the benefit you wish them to have. It is important the language in your will is clear under these circumstances.

When choosing your Executor, it is important to choose someone competent, that you can trust with the duties involved in administering an estate. Often friends or family members are favoured. You may wish to discuss the appointment of your executor with that person before nominating them in your will. An executor may decide to refuse their appointment, and you should therefore be prepared to name a second person in your will.

If you do not name an executor, the Supreme Court will nominate an ‘Administrator’ instead who will then be responsible for administering your estate. 

No. While the provisions contained in wills, made by people in a relationship, may mirror one another, they must each make a separate will.

People in a relationship, may also have different assets or wishes from those of their partner. It is also common for people in a second or subsequent relationship to have children from earlier marriages or relationships and this may impact on people’s wishes.

A Testamentary Trust is a trust established in your Will that will not come into force until your death. You will appoints a trustee who will then manage the assets in the trust for the benefit of your Beneficiaries.  You may decide to establish a trust (rather than gift assets directly to a beneficiary) for a number of reasons. Some of these include:

Flexibility

Testamentary trusts are often set up as discretionary trusts. This means the trustee is given discretion to distribute the capital and income of the trust property as they see fit. This flexibility allows your trustee to take the individual circumstances of your beneficiaries into consideration when deciding how your estate should be distributed. As a result, the future needs of your beneficiaries are more likely to be met.

Taxation Benefits

There are two key taxation benefits associated with establishing a testamentary trust. Firstly, your beneficiaries may be able to reduce their personal income tax by splitting investment returns in a tax-efficient way (e.g. splitting returns between family members to fully utilise each person’s tax-free threshold). Secondly, considerable tax benefits are available for minors (i.e. children under 18 years). Where there is an ordinary family trust, minors currently have a tax-free threshold of $416 and are then taxed at the highest marginal tax rate. Where a testamentary trust is created, however, minors are entitled to a tax-free threshold of $18, 200 and are then taxed at the normal adult marginal rate.

Asset Protection

Testamentary trusts are also a highly effective method of protecting your assets; they allow you to ensure that your property remains within the family and is only used to benefit your family members. Asset protection becomes particularly important where you have concerns regarding:

• beneficiaries becoming bankrupt;
• beneficiaries becoming divorced and subsequent asset division;
• mismanagement of assets by children and
• providing for handicapped or intellectually disabled children. By creating a testamentary trust, you ensure that your assets do not form part of your beneficiary’s general pool of assets. This means that they are not available to potential creditors.

Longevity

A testamentary trust can continue for up to 80 years after the testator’s death. As such, it is possible for you to make provision for several future generations.

You should keep your Will in a safe place where there is little chance of it being lost, damaged, or altered.  It is recommended the document is kept in a fire proof safe.

You may also wish to have multiple copies. If so, ensure the original is kept particularly safe and that only a copy is kept at your home. With this home copy, you should include a letter stating where the original is held, so it can be quickly located in the event of your death.

Your family should be aware of its whereabouts at all times.

When deciding on a guardian for your children, it is important to consider the age of the children and how you wish them to be raised. When you have young children, the task of raising them can be onerous and expensive. You should therefore have a frank conversation with anyone you are considering appointing and whether or not they are willing to undertake this responsibility.

Our wills allow the executor to pay money to the guardian, for the purpose of offsetting the cost of raising children. For this reason, it is a potential conflict of interest if the executor and guardian is the same person and accordingly we recommend they be different people.

If the children are older, they may not wish to live with who you have appointed. It is therefore necessary to discuss with both your children and the likely guardian the circumstances under which this may occur and their own individual wishes.

Depending on who you choose as the guardian for your children, their views may conflict with yours. This decision should not be undertaken lightly.

Also be aware a guardian can be removed by court order, if the court considers the best interest of the children are served by appointment of a different person.

Your estate does not automatically include your superannuation death benefits.

You should ensure a nomination form is completed and given to the fund’s trustee directing the trustee how your death benefits should be paid.

Some funds permit you to make a “binding” nomination. If you make such a nomination, this avoids any confusion or doubts when administering the benefit. If you do not make a binding nomination, the trustee of the fund may use their discretion to disperse the benefit to someone you would not have nominated.

Your nomination can appoint more than one person to receive a share of the benefit and you may split the percentage accordingly. However there are limits on who you may nominate. You may include:

• Your spouse;
• Any financial dependants you may have;
• Your children; or
• Anyone who has a ‘interdependency relationship’ with you, meaning you have a close personal relationship.

A nomination that lists a person, not listed above, will be invalid.

It is always possible to simply nominate your “legal personal representatives” as recipients of your death benefits. In this case the benefits should be paid to the executors of your estate and distributed in accordance with your will.