Upon death, assets that are held in your name will pass into your estate and are controlled by your Will.
The following is a list of assets that may not form a part of your estate and subsequently are not under the control of your Will.
Jointly Owned Assets:
Commonly, properties are held jointly (eg. your house) as joint tenants or tenant in common. If held by you and your spouse as joint tenants, then the asset will not be included in the estate. Rather, the asset will pass to the other joint tenant automatically upon death pursuant to the rules of survivorship.
If the asset is held as tenants in common, your share or interest in that property will be controlled by your Will. It is only the share of the property which is an asset of the estate.
Assets owned by companies that are controlled by you will not form part of your estate. These assets are owned by the company, however any shares in the company that you own will form part of your estate.
These are commonly known as a Family Trust. Any assets owned by the discretionary trust will not be included in your estate. It is important to pass “control” of the trust in accordance with your wishes.
The insured person must nominate the beneficiary of their policy. The proceeds will be paid directly to the beneficiary and they will not form part of your estate.
In some cases, it is appropriate to nominate your estate as the beneficiary of all life insurances. If your estate is the beneficiary, the proceeds of the policies will be managed by the terms of your Will.
Alternatively, your life insurance may be owned by a superannuation fund. Where this is the case, the life insurance proceeds will be merged with your superannuation balance to form part of your superannuation death benefit.
A superannuation policy has a Binding Death Nomination (the nomination) that is valid for three years. In the binding nomination, you nominate your preferred beneficiaries and the proportion of the death benefit each should receive. As such, the assets will not form part of your estate.
If you have further questions regarding your estate planning, contact Estate Lawyers on 03 9088 3185 (Melbourne) or 02 9188 2032 (Sydney) and speak to one of our Will and Estate specialists.