Estate Planning is more than just about having a Will. Your Will only deals with assets you own in your own name when you die. Superannuation, jointly owned property, life insurance and anything held in a family trust or company can pass outside your Will. A Will on its own may not get your wealth to the people you intend.
A good estate plan will involve reviewing and managing your complete financial affairs to ensure that if you pass away, your beneficiaries receive what you intended them to receive. Good estate planning also covers what happens if you lose capacity while you are alive, which a Will does not do at all. A comprehensive estate plan can avoid many headaches for your family when you do pass away.
An effective estate plan can cover your financial, business, and tax arrangements, as well as your lifestyle needs, retirement plans, and any future events such as health scares. Making sure your estate can also be distributed tax effectively is something to keep in mind when reviewing your estate. Please find more information here on testamentary trust, which is one way you can structure your estate planning more tax effectively.
What your Will controls, and what it doesn’t
If an asset is not in your personal name when you die, your Will usually cannot deal with it. Check each asset below against how it is actually held.
| Asset | Does your Will control it? | What decides who gets it | What to check |
|---|---|---|---|
| Bank accounts, shares, cars in your sole name | Yes | Your Will (or intestacy rules if there is no valid Will) | Will is current and executor is still the right person |
| Home or property owned as joint tenants | No | Passes automatically to the surviving owner | Is that what you want? Consider tenants in common if not |
| Property owned as tenants in common | Yes, your share only | Your Will | Your Will deals with your share |
| Superannuation (retail, industry or SMSF) | No, unless paid to your estate | Your death benefit nomination, or the trustee’s discretion if there is none | Binding nomination in place, valid and not lapsed |
| Life insurance held inside super | No | Same as your super | As above |
| Life insurance held outside super | Sometimes | The nominated beneficiary on the policy, or your estate if none | Beneficiary on the policy is current |
| Family (discretionary) trust | No | The trust deed: appointor, successor trustee, vesting terms | Successor appointor named; deed up to date |
| Private company | Your shares only | Your Will passes the shares; the constitution decides who runs it | Successor director; shareholders agreement |
Superannuation is the area most people get wrong. Without a valid binding nomination, the fund trustee decides who receives your benefit. Adult children who are not financial dependants can also pay tax on the taxable component. This is generally 17% (including Medicare levy) on the taxed element, and up to 32% on any untaxed element, such as some insured death benefits.
Many retail and industry fund nominations lapse every 3 years unless the fund offers a non-lapsing option. SMSF nominations depend on the fund’s trust deed.
When reviewing your estate plan, several key areas should be considered, as they are crucial to its overall effectiveness.
In addition to reviewing your Will, we usually also consider the following:
- Non-Estate Assets: Review assets that may not form part of your estate (such as jointly owned properties, superannuation, or assets held in trusts or companies) to ensure they are appropriately structured and distributed according to your wishes. These assets may not be dealt with under a Will if they are not appropriately considered and cannot be distributed as per your wishes.
- Superannuation Death Benefit Nominations: Ensure your superannuation benefits are directed to the correct beneficiaries in a tax-effective manner. This is typically done via a Binding Death Benefit Nomination, which needs to be accepted by your superfund to ensure it is valid. Check whether your nomination lapses and when it needs to be renewed. Please find more information on super and your estate here.
- Family Trust Deed: Review the terms of any family trusts, including the successor appointor and trustee, ensuring the deed reflects your current intentions and is up-to-date with any legal or regulatory changes. You can find more information here on why you should update your deed.
- Successor Director for Companies: If you are a company director, it is essential to review and nominate a Successor Director to ensure the continuity of business operations in the event of your incapacity or passing.
- Life Insurance Policies: Verify that your life insurance beneficiaries are appropriately nominated and aligned with your overall estate strategy.
- Enduring Powers of Attorney (EPA): Check that your appointed attorney still reflects your wishes and is best suited to manage your financial matters if you are unable to do so. You can find more information on this document and the EPG here.
- Enduring Power of Guardianship (EPG): Ensure your chosen guardian can manage your health and personal decisions should you be unable to.
- Advance Health Directive: Consider establishing an Advance Health Directive outlining your medical treatment preferences in the event that you cannot communicate your decisions. You can find more information on this here.
Documents that work while you are alive
Your Will only takes effect when you die. If you lose capacity through illness, accident or dementia, these three WA documents decide who can act for you. Without them, your family may need to apply to the State Administrative Tribunal.
| Document | What it covers | Who you appoint |
|---|---|---|
| Enduring Power of Attorney (EPA) | Property and financial decisions: banking, paying bills, selling assets | An attorney (plus a substitute if you wish) |
| Enduring Power of Guardianship (EPG) | Lifestyle, health and personal decisions: where you live, medical treatment | An enduring guardian |
| Advance Health Directive (AHD) | Your own instructions about future medical treatment | No one; it records your decisions directly |
All three end on death. From that point, your executor and your Will take over.
Estate planning checklist
Work through these with your family. Anything you can’t tick, bring to us.
How AAG can help
We can review your Will, super nominations, property ownership, trusts and EPA/EPG together, so the pieces line up. If you are ever acting as executor for a family member, ask us for our executor checklist.
Estate planning is essential for securing your family’s future and avoiding unnecessary complications.
We would be happy to help you review these areas and make any necessary updates to your current arrangements.
Please let us know a convenient time to schedule a discussion or if you have any questions in the meantime.
Please do not hesitate to contact us if you need advice or have any questions about your estate planning, or call (08) 9227 6300 to book an estate planning review.
