For people under the age of 30, what happens to assets when they die is probably one of the last things on their minds. Life is busy with moving out of home, embarking on a career, travelling the world and entering long term relationships. Whilst it is a common assumption that young people need not be concerned with estate planning given they hold few assets, there are a number of matters that benefit from consideration and direction.
Superannuation member entitlements may hold a life insurance death benefit component, both of which will be payable to dependants upon death. Therefore, a substantial sum may be payable to a partner, children or to persons in a relationship of interdependency. Providing your superannuation fund with a clear written direction as to who is to receive benefits can be done by preparing and signing a Binding Death Benefit Nomination form. Our estate planning lawyers can advise as to how this will fit into your overall estate plan.
If you have young children, it may also be prudent to establish Testamentary Trusts (also known as Family Will Trusts) in your Will. Doing so, you can provide a spouse or children with a structure providing ongoing asset protection to meet future costs but also tax concessions. Family Will Trusts require the appointment of Appointors and Trustees to manage and control the trust for your children until your children attain an age as determined by you, at which time they may gain control of their own Trust. Proper thought needs to be given to who these people will be.
The instructions for the distribution of assets on death can be included in a simple Will. A Will made prior to marriage will be nullified by marriage and if you are in a serious relationship or engaged, the Will can be prepared in contemplation of your marriage. This means that should you marry your current partner, your Will remains valid. If you have previously prepared a Will and then married, you should revisit your estate planning.
Young people also often fail to turn their minds to who would make important financial, personal and medical decisions for them if they were incapacitated and are unable to make decisions.
Enduring Powers of Attorney can make it simple for your desired Attorney (or Attorneys) to make these decisions on your behalf. For example, if you were involved in an accident and left incapacitated, your Financial Attorney could still meet your outgoing expenses such as rent or mortgage repayments and utility bills by making payments from your accounts. Your Medical Treatment Decision Maker would provide instructions to medical practitioners for your care whilst you are unable to provide such instructions yourself.
Ensuring you have these documents in place will make everything easier in the event of the unexpected. If you are considering commencing your Estate Planning, check out our new online tool, Settify, which enables you to provide your personal details and instructions for your estate planning. We can then make an appointment for you to meet with a member of our Wills, Estates and Succession Planning team to get your affairs in order.
If you require advice or further information in relation to any of the matters discussed in this article, please contact our Wills, Estates and Succession Planning team on 03 5273 5203.