What assets will be included in your estate and controlled by your Will?
Jointly owned assets
If any of your assets (eg. your house) are owned by you and your spouse together as joint tenants then the asset will not be included in the estate. The asset will pass to the other joint tenant automatically upon your death pursuant to the rules of survivorship.
If however you own property together with another person “as tenants in common” then your share or interest in that property will be controlled by your Will.
Discretionary Trusts, unit trusts and companies
Assets owned by discretionary trusts, unit trust or companies controlled by you will not form part of your estate. The assets are owned by the trust or company. Any shares in the company or units that you own however, will be assets which form part of the estate.
Generally, the insured person nominates the beneficiary of their policy and the proceeds of a life policy are paid directly to the beneficiary. If you wish for the proceeds of a life insurance policy to pass to the estate and be managed by the terms of your Will then you need to make sure that nominate your estate as the beneficiary of your polices.
Superannuation will typically not form party of the estate unless you specifically nominate that your death benefit is to be paid to your estate upon your death.
Superannuation death benefits are paid to the deceased’s beneficiaries under a valid binding nomination or at the direction of the superannuation fund trustee with the guidance of a non-binding nomination.
Beneficiaries are generally restricted to the member’s legal personal representative and dependents, who are defined to include the person’s spouse, child (of any age), financial dependent and a person in an interdependency relationship with the member at the time of death.
To ensure the death benefit is paid to the nominated person (s), a binding nomination must be kept up-to-date and valid.
Under the superannuation law, a binding death benefit nomination is only binding on the trustee of a superannuation fund for 3 years. The nomination, if not renewed, will become non-binding at the end of the 3 year period. This means that it will be up to the trustee of the superannuation fund to decide who to distribute the benefit to.
It should also be noted that this 3 year rule may not apply to a self-managed superannuation fund. The governing rules of a self-managed superannuation fund will determine whether a member can make a binding death benefit nomination and if so, whether that nomination will lapse after a certain period of time.