What are of the most 5 Common Myths Associated with Estate Planning?
In this video, Wills & Estates Solicitor Steven Mahoney talks about Superannuation myths, who should have a Will and other reasons why it’s important to be prepared in the event of your death.
My name’s Steven Mahoney and I’m an associate at OMB Solicitors. Today I’m going to take you through the five common myths associated with estate planning.
In order they are, one that superannuation forms part of your estate. Two, that if I die, everything will go to my spouse anyway. Three, that estate planning is only for the wealthy or elderly.Four, that is economical and cost efficient to draught my own will, and five, that anyone can contest my will, so what’s the point of drafting one.
Turning to these in order of the points so, superannuation forming part of your estate. This is often the light bulb moment for a lot of my clients when I advise them that your superannuation is actually governed by an independent piece of legislation and doesn’t form part of your estate.
This is further compounded when I tell them that your superannuation can only be gifted to certain dependents which are as part of your superannuation.
Now, a dependent under the superannuation provisions is either a spouse, a child, someone who you’re in an interdependent relationship with, or your legal personal representative, which is the executor of your will.
This is again important because if you do not have what is called a binding death benefit nomination, which is a fancy word for a will for your super, it is an independent trustee of the industry super fund who will make this decision for you.
Now, there are three certain documents that you can implement to ensure that your superannuation benefits do pass to your nominated dependent. Now, this is via a non-lapsing binding death benefit nomination, which will ensure that it doesn’t lapse a binding death benefit nomination.
Which is usually only valid for a period of three years, or a non-binding death benefit nomination, which is purely just a wish that is given to the trustee to make a decision at their discretion.
So turning to point number three, which also does tie into the superannuation, is that estate planning is only for the wealthy or the elderly.
Now, because a lot of people do have a death benefit or life insurance policy attached to their superannuation, people often neglect to think of the actual size or value of their estate, and quite often this is a lot larger than people give consideration to.
It is also extremely important to give rise to other things such as your digital assets or social media platforms and who you may wish, or more importantly, may wish not to have access to following your passing.
There is also the importance of appointing a guardian for any minor beneficiaries or minor children as well as gifting pets to any certain individuals which you may see fit. Point number two is what’s the point of having a will that everything will go to my spouse anyway?
If you die without a will, you are deemed to have died intestate. Now, if you do die intestate, there are the intestacy provisions of the relevant act which will apply. It is therefore essential to ensure that you do have a will, to ensure that the intestacy provisions of the act aren’t enlivened in which a set formula will dictate which beneficiaries are to receive what.
Point number four is that it is economical and beneficial to draft your own will. Now, many people aren’t aware of the intricacies or important provisions which must be contained within a will.
Now, this includes the important revocation provision, the appointment of executors, the importance to ensure that a will is witnessed by two independent parties who aren’t a beneficiary of the will or cannot be a spouse of any of those beneficiaries, and point number five is that anyone can contest a will and this is obviously a big grievance for a lot of clients who think, what is the point of establishing a will, anyone will contest it.
Now, people often have internal family conflicts, either with siblings, parents, but it’s very comforting for the fact to advise clients that the only eligible applicants to contest a will is a spouse, a child, which also includes a stepchild and an adopted child, as well as someone who is a financial dependent.
Now, if you don’t fall within these categories in Queensland, you are unable to contest a will. So in order to contest a will, there is also consideration which must be given to the timeframe of doing so.
In Queensland, you must notify an executor within six months of your intention to make a claim upon an estate, and you must also file court proceedings within a court of competent jurisdiction within a period of nine months.
It is important to realise that each state does have their own rules which are applied to contesting an estate, and one which is very important is in New South Wales, in which a notional estate is also given consideration as to your trust and companies and your involvement with those as well as grandchildren can contest an estate.
So I hope this video has been of assistance and we welcome you to contact any of our experienced members here at OMB Solicitors if you do wish to further discuss your estate planning affairs.