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You can't give what you don't have - Will drafting for those who have a lot but own little

Wills and Estates: 23 March 2019

It is becoming more and more common for people to hold assets in various entities rather than in their own name. Many properties and investments are held in family trusts, companies or within self managed superannuation funds. Such entities can be a tax effective and / or asset protective vehicle for those assets, but what happens to them when you die?

The only assets that form part of your estate and will be distributed in accordance with your Will are assets that are held in your name. This means that assets that are owned by a family trust, a company or in your superannuation fund will not necessarily fall into your estate asset pool, regardless of whether you have control over the owning entity.

Some common examples of assets that will not fall into your estate are:

  • Assets held as joint proprietors with someone else
  • Assets held in family trusts - even if you are the trustee, appointor and / or beneficiary of the trust
  • Assets owned by a company - even if you are the sole shareholder and director of that company
  • Superannuation benefits (Superannuation benefits do not automatically form part of your estate assets but in some cases will do - for further information see our blog entitled "Superannuation death benefits)

Knowing the ownership structure of assets is a crucial element in Will drafting. There is little point in drafting a Will that distributes assets that are not held by the Will maker in their own name. Rather, where the Will maker has control over various entities that hold assets (such as being the shareholder of a private company, the trustee or appointor of family trust or the trustee of a self managed superannuation fund) the Will needs to be carefully drafted to ensure the control of such entities are passed on to such persons that the Will maker chooses.

These issues can be confusing and complex but Aitken Partners can help.

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