What is a Will and why do I need one?

By |2022-06-29T09:57:28+10:0027-6-22|

So, why do I need a Will? Everyone knows my family will just get what I own, right?

There are a few problems with this approach:

  • Not all assets you have control over or an interest in, will pass under a ‘Will’ (that is, the concept of ‘ownership’ needs careful consideration, taking into account the legal implications);
  • The Laws governing what happens to your assets after your death is effected by ‘who’ owns them (including whether they are owned in a Discretionary Trust, or jointly with someone else, in a Superannuation Fund and more);
  • The ‘place’ where these assets are located are can be part of this picture too;
  • The Law dictates what will happen if you do not have a legally binding Will – and this is often different to what you anticipate, and differs between Australian states and internationally;
  • Unexpected tax issues or extra costs can arise when you don’t have a Will;
  • Complications can arise if you want certain assets to pass in a particular way, and not others (e.g. personal items versus business interests, insurance versus company assets etc);
  • Who is in charge of this distribution? If you do not nominate the right people, the law presumes certain people can take on this role to the exclusion of others – this can have unwanted complications.

My family understands that certain items/property/other are to be divided a particular way. I trust one of them to make those distributions fairly. That’s okay, right?

Unfortunately, it is not that simple. The taxation system in Australia is designed to create certain taxing points for different transactions. Fortunately, there are exemptions in place when this is done following the terms of a legally binding Will (otherwise an expensive Court Order would need to be sought). Unfortunately, if you do not have a Will in place, the agreed ‘transfer’ of assets to those your family ‘just knows about’ may trigger stamp duty and capital gains tax as if you were alive.

The practical and emotional upheaval that a failure to plan involves, reminds us all that a little pre-planning pays us back in truckloads when the pressure of grief is upon us. So, simplistically speaking, it makes sense to think about who you want to benefit from your Will and nominate those people beforehand in a well-thought out plan. Protect your family’s future.

Tammy Parsons is a Senior Associate in our Wills and Estate Planning team. Contact Tammy on trp@nicholsons.com.au, call (07) 3226 3968 or connect with her on LinkedIn.

Think Wills and Estate Planning. Think Nicholsons. 

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