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Protecting Your Wealth with a Considered Will and Estate Plan

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Video Transcript

There are a lot of elements to consider when preparing and drafting a will.

A common misconception is that all assets you own or control will form part of your estate and be dealt with in your will. This is not the case. For example – assets you personally own, like the family home, cash in the bank, shares, and personal belongings will be dealt with in your will. Although assets held in a family trust and companies do not form a part of your estate.

Further, your superannuation entitlements do not form a part of your estate and are dealt with separately again. When we prepare a considered will and estate plan for client’s, we ensure your will is structured and drafted in accordance with your wishes. We also ensure that your company, family trusts, and superannuation are structured in such a way to give full effect to your wishes, and ensure your assets are protected and pass to who you want at the most appropriate time.


Importance of Wills and Estate Planning

As part of our practice, we prepare wills and estate plans for a lot of retirees. During our free initial consultation, most retirees are concerned about assets protection for their beneficiaries. That is, we can implement a testamentary trust into your will that will provide your beneficiary with protection so as to quarantine their inheritance, so it is used for its intended purpose, and not wasted.

If you have a beneficiary that fits into one of the following categories, we can structure your will and estate plan in such a way as to protect their inheritance. The assets that form part of a trust cannot be dispersed to the beneficiaries without the authority of the Trustee so. The assets are legally owned by the Trustee, which may protect the assets from some of the following circumstances:

Beneficiaries who are at Risk Of Divorce or Relations Breakdown

If you are concerned a beneficiaries marriage may fail, a testamentary trust may protect the inheritance. That is if the beneficiary’s marriage breaks down and after they receive an inheritance, and the deceased’s assets are held within a testamentary trust then it is less likely they can be the subject of the beneficiary’s family court property settlement. If, on the other hand, the beneficiary had inherited the assets absolutely, those assets would most likely be taken into account by the family court when making orders regarding the division of the couple’s property.

Although a testamentary trust offers some protection, depending on who controls the trust, the terms of the trust and who the beneficiaries are may be taken into account by the Family Court when considering the financial resources of the beneficiary.


Beneficiaries with dependency issues

If a beneficiary has, for example, alcohol or drug dependency issues, and you are concerned their inheritance would have waited if they received a lump sum amount, you can hold the beneficiaries entitlements on the testamentary trusts and the trustee of the trust decided when and how much money the beneficiary should receive, depending on their current circumstances.

Creditors and Bankruptcies

No discretionary beneficiary has a legal interest in the assets of the trust. Therefore, if a beneficiary is at risk of bankruptcy or is bankrupt, the assets of the trust cannot be taken from the beneficiary so the inheritance is maintained, as they do not own the trust assets.

High-risk beneficiaries

If an intended beneficiary is in a high-risk professional business where negligence claims are likely a testamentary trust will protect the inheritance.

Spendthrift Beneficiaries

A testamentary trust can avoid the possibility of the beneficiaries spending or waiting for their share of their inheritance irresponsibly as the trustees can monitor how and what benefit they are given.

Challenging a will

If money is left to a beneficiary on trust, and that beneficiary passes away and there is a challenge to the deceased beneficiaries’ will, the assets held on trust will not form part of his estate and therefore be available for distribution.

Everyone’s personal and financial circumstances are different, so the structure of everyone’s will and estate plan is also going to be different.  To discuss how to best structure your will and estate plan to maximise asset protection, please contact our Wills and Estate Lawyers for a free initial consultation.

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Need a Copy of a Will?

If you need a copy of a Will and/or are seeking legal advice, the team at O'Connor Rudy and Garrett can assist you. We will contact you to confirm additional details and then organise contacting the required parties to secure a copy of the Will for you.