Keeping Assets Protected In Your Will
Written by: Karlene Wightman | Legal Team
Individuals choose to make a Will for a variety of different reasons.
However, often the main reason given is to protect assets for their family, and the next generation. The definition of ‘assets’ can be many and varied, and what is important to one person may not be important to the next person, despite similar circumstances.
What Assets Are Commonly Included In a Will?
There are many ways to structure a Will. One of the most common is to instruct executors to sell or distribute all assets between the beneficiaries of the Will, without specifically breaking down items. However, assets that are most often listed include the following:
- A Residential or Investment Property: properties are often a major concern for Will makers. It is often the case that beneficiaries are currently residing in a residential or investment property, even when the beneficiaries are adults. Will makers choose to deal with this situation in several different ways, three of which warrant further discussion:
- Gifting The Asset: the simplest way to protect a beneficiary who is residing in a property is to gift the property to them upon the Will maker’s death. However, this is not always considered to be fair amongst all beneficiaries, especially when the Will maker wants equality between beneficiaries.
- Option To Purchase: this is when a Will maker gives a beneficiary an option to purchase a property from the estate, at market value, within a specific time period after the Will maker’s death. This option does create an equality between beneficiaries but is not always what the beneficiary who is granted the option can realistically afford.
- Right To Occupy: a right to occupy means that a person, who is not necessarily a beneficiary under the Will, is granted a right to reside in a property for a particular period. This is usually reserved for a principal place of residence, and the time frame is the discretion of the Will maker but can be for the occupancy beneficiary’s lifetime. This option preserves the estate funds whilst also providing the occupancy beneficiary with security of tenure. The downside with this structure, and one that can sometimes cause issues within families, is that the estate is not able to distribute until the occupancy beneficiary’s tenancy period expires, which could be many years.
- Superannuation: superannuation is not paid to the estate, and therefore subject to a bequest in a Will, unless it is directed to in a binding death benefit nomination. When a Will maker wants to gift their superannuation to beneficiaries, and this cannot be done via a binding death benefit nomination, the nomination needs to be to ‘The Legal Personal Representative’. This Will then direct who receives the benefits of the superannuation. Superannuation is a complex area that requires individual advice.
- Motor Vehicles, Boats, Caravans: less often, Will makers have assets such as motor vehicles, boats or caravans that they would like to give to specific beneficiaries, particularly if they are of significant value.
- Jewellery or Other Personal Items: in some cases, a Will maker has jewellery of significant value, paintings or tools that they may want to leave to a beneficiary. This is often the case with jewellery when a bequest might be made to daughters and granddaughters.
Why Do Assets Need To Be Protected?
Two common scenarios usually exist when making a Will.
One is that the Will maker is confident that all beneficiaries get along (children, as an example) and believes that no specific gifts are required as the beneficiaries will ‘sort it out amongst themselves’.
The second scenario is that there may be friction amongst beneficiaries, whether it be small or significant, which leads the Will maker to believe that, if assets are not specifically gifted, arguments would occur.
A less common scenario is that a Will maker feels strongly about who receives the assets, perhaps because it was bequeathed to them in a Will or was a family heirloom. No one situation is the same, and therefore a Will makers individual circumstances always need to be considered and reviewed.
Want to gain a greater understanding of why having a Will is important? Check out this previous blog we put together: Importance Of Creating A Will
Can Someone Contest a Will For Specific Assets?
When a person (whether a beneficiary or not) believes that they have not been adequately provided for in a Will, they may have rights to make a Part IV Claim under the Administration and Probate Act 1958 (Vic). While this article is not going to cover the particular aspects of a Part IV Claim and the requirements for making an application, there is the ability to make the claim for a specific asset.
The most common situation is when an individual has been residing in a residential property with the deceased for a significant period, but has not been bequeathed the property, or at the very least given a right to occupy in the Will. Again, depending on the circumstances, a Court would consider this unreasonable, particularly given the individual does not have alternate living arrangements.
It is less common for a Part IV Claim to be made for other assets but is not unheard of. Each situation would be assessed on a case-by-case basis to determine whether the applicant would have reasonable grounds for a claim.
Want to know more about your rights and obligations when it comes to challenging an estate? Check out this previous blog we put together: How Do I Challenge A Will?
Can You Protect Your Assets After You Die?
There is a common saying amongst estate lawyers, which is that a Will maker is unable to ‘rule from the grave’.
Depending on the scenario presented and the reasons behind wanting to put extra protection in place, it is sometimes possible to create extra protection through a trust arrangement. The most common forms are testamentary trusts, fixed trusts or special disability trusts. Again, individual circumstances would steer the conversation and advice to a particular trust, if appropriate.
Trust arrangements allow for assets to be managed by the trustee but do not guarantee that assets are preserved. The assets can be sold by the trustee and the funds invested for the benefit of the beneficiary.
Think you might need to look at extra protection for your assets after you die? Check out this previous blog we put together: Do I Need A Testamentary Trust?
Canny Legal, Expert Legal Advice to Protect You
A Will can be as complex or as simple as you would like to make it. However, it is always imperative to have legal advice regarding the gifting of specific assets, as some bequests are less straightforward than others.
There are many considerations involved when dealing with the inception of your Will. It can be a straightforward process, but when considering more than just yourself, it may not be. This is where expert legal advice can help relieve stress and guide you comfortably through the whole process, Canny Legal lawyers are professional and personable experts and are always there for you throughout the entire process.
Get in touch with our team today so we can take the stress out of difficult legal times!
