Estate Planning

If a loved one feels that you haven’t provided for them properly under your Will, they can lodge a family provision claim in the Supreme Court. There are different eligibility requirements across different states, but, generally, only spouses, children and dependents can lodge claims. 

If the Court finds that you haven’t sufficiently provided for a claimant, it can override your Will and make a family provision order, which will give that person ‘adequate provision’ from your estate. Even if a claim isn’t successful, the Court may order that legal costs be paid by your estate.

A testamentary trust is a trust that is only created when you die. Rather than your estate being distributed directly to your beneficiaries, you can create a testamentary trust under your Will, which holds your estate’s assets on behalf of your beneficiaries. 

Testamentary trusts, like all trusts, have a trust deed (the rules that govern how the trust works) and at least one trustee, who controls your trust’s assets. Testamentary trusts can either be discretionary (where the trustee(s) determine how the assets are distributed to your beneficiaries) or fixed (where the instructions for distributions are explicit). 

Because your estate’s assets aren’t passed directly to your beneficiaries, testamentary trusts can be a useful estate planning vehicle. Their structure prevents third parties, such as your beneficiaries’ creditors, from accessing your assets, keeps your beneficiaries from making poor financial decisions with their inheritances, and provides certain tax advantages. 

You can find the cut-off limits for a full Age Pension, a part pension, and a transitional rate of pension here. If you’re not eligible for the pension because your assets are worth too much, you may be able to apply for asset hardship provisions or take advantage of the Home Equity Access Scheme.  

Probate is the process of validating a deceased person’s Will through the Supreme Court of whichever state or territory their assets are held in. A grant of probate is a court document that allows that person’s executor to administer their estate. For example, a bank wouldn’t normally allow an executor to take control of a deceased person’s bank account unless they had a grant of probate. 

You can only avoid probate if either: 

• the assets being held by an asset-holder, such as a bank, are under their small estates threshold, which varies between institutions (CommBank, for example, only requires a grant of probate if the deceased person’s solely held accounts total more than $100,00) 
• the deceased person dies intestate (without a Will), in which case their loved ones will need to apply for letters of administration instead. 

Certain assets may not require a grant of probate to control. For example, a binding death benefit nomination means your super fund will release your super directly to your chosen beneficiaries. Another way to avoid probate is by jointly holding an asset, in which case ownership of the asset automatically passes to the survivor(s). 

No, your superannuation is not automatically part of your estate. If you have binding death benefit nominations in place, your super will pass directly to your chosen beneficiaries. If you have non-binding nominations or haven’t nominated anyone, your super fund’s trustee can decide which eligible dependants they pay your super to. 

You can make your super part of your estate by nominating your personal legal representative. It will then be distributed under your Will to any beneficiary of your choice. Keep in mind that, by adding your super to your estate, it may become vulnerable to Will challenges and family provision claims.