Wills & Estate Planning

What is Estate Planning?

While no one likes to dwell or their own mortality, estate planning is an essential step to protect and care for your loved ones. You should develop a strategy to deal with your assets after you die. This will involve drafting legal documents, such as a will, to transfer your assets in the event of death. You also need to think about what will happen to other assets that are not covered by your will (such as superannuation or assets held in a trust).

Do I Need a Will?

Every capable adult should make a will, store it carefully in a safe place and check it regularly to ensure that it remains up to date. 

A will is an important, formal document that can perform a number of different functions. 

At a minimum, your will should set out how you would like your property to be distributed after your death. This can be a detailed list of individual items, or a simple division of your estate. For instance, if you are married with children, your will can simply state that your spouse receives your entire estate unless they predecease you, in which case your children are to inherit in equal shares.  

In addition to distributing your estate, your will can also fulfil other functions. For instance, you can leave funeral and burial instructions in your will for your executor to follow. You can also use your will to describe your wishes for the care of your children and pets. You can put in place arrangements to provide financially for the needs of your children (and your pets, for that matter). This can be as simple as leaving some money for the person who will care for your cat, or as complex as a testamentary trust established for each of your children. 

What If I Don’t Have a Will?

Without a will, you will be intestate. In that case, a close family member needs to apply to the Supreme Court of South Australia for letters of administration. This document allows someone to act as if they were the executor of your estate (with some important differences). They then distribute your estate according to legislation. 

You may have a will but still end up with an intestate estate if your will is found to be invalid. 

Your will must always be carefully preserved. Any damage on the document itself can lead to questions about its validity. Something as minor as a pin hole can raise issues because it may be interpreted as an indication that a page of the will is missing. 

What Happens to My Superannuation After I Die?

Superannuation is held by a super fund, through a trustee, on our behalf.  As your superannuation is not part of your estate, it is not distributed according to your will. 

If a super fund is holding assets for us when we die, the trustees of the super fund decide what happens to the super. It will only be covered by the will if the super fund trustees decide to pay it into the estate, and not directly to a person or people.

Most funds, however, allow you to nominate who you want to receive the super when you die, but unless that nomination is binding the trustees can decide to pay the super to someone else. 

We can advise you how to put a binding death benefit nomination in place, and how to ensure your super and your estate work hand-in-glove to achieve the outcome you want. If you have specific plans for your super, for example to pay off a mortgage, we can incorporate these plans into your estate planning. 

What Happens to My SMSF After I Die?

When you establish your self-managed superannuation fund (SMSF) you should put in place a plan for what happens to the fund itself after you die. This plan is typically influenced by whether there are other members of the fund, in which case the fund may need to continue after your death. Many SMSFs are set up to maximise financial advantages without giving enough thought to what should happen if a member dies or loses capacity. We can work with your financial advisor to ensure your SMSF has the safeguards needed to protect you and your family.

How Can We Help with Your Estate Planning?

If your financial and family circumstances are relatively straight-forward, we can prepare a simple will to give you and your family peace of mind. If your matters are more complex, we will step you through your options and your legal position to ensure the best estate plan can be prepared for you and your loved ones. 

We can also prepare an enduring power of attorney which appoints a trusted person or people to manage your financial and legal matters if you are incapacitated. Even though many people expect they will only need such a document later in life, it is important to put them in place early to be sure they are there when you need them. It can be very traumatic when a solicitor cannot prepare a power of attorney because a person has already lost legal capacity.

The great power given to the trustee of a SMSF means it is very important to ensure control of the fund doesn’t fall into the wrong hands. We know how to set up (or alter) your SMSF to guard against greed and opportunism. We can help whether your fund has been operating for many years and you want us to review it, or if you are thinking about setting up an SMSF.

We have extensive experience in estate planning and estate disputes and can advise how best to protect your family and reduce the risk of claims against the estate. We can also work with your accountant to prepare an estate plan that takes advantage of additional financial and tax and financial planning advice.

If you need assistance, contact one of our lawyers at [email protected] or call 08 8231 4757 for expert legal advice.