The primary issue in estate planning is ensuring that your wishes are carried out on your death. It is your property and you should be free to choose to whom it will be transferred on your death, right? Simply put you make a valid will specifying your wishes and appoint a person to carry this out. The reality is of course more complex.
Firstly, you must have a validly attested will, and the requisite mental capacity to execute it at the time of signature. While the law provides for the recognition of: informal wills; the rectification of erroneous provisions; and statutory wills for persons that lack capacity; these procedures involve a hearing which can be contested and costly.
A change of circumstances such as a marriage or divorce can invalidate some or all of the provisions of a will. Beneficiaries can seek to set aside trust provisions or conditions that you may seek to have applied to gifts. A common example would be the vesting of property upon the attainment of a specified age.
Property that will not necessarily form part of your estate includes: superannuation and related death benefits; life insurance; trust property; and jointly held property. It is not uncommon for parties, and even their legal advisors, to overlook or fail to check the legal status of property and financial resources. The trustee of the superannuation fund may not be bound by your nomination and a binding death benefit nomination may need to be considered.
A claim, pursuant to Chapter 3 of the Succession Act 2006, can be made against your estate. The relevant considerations are numerous and require consideration of many of the abovementioned factors including superannuation. Many claims arise in relation to second marriages and de facto relationships and can for example be made by existing or former partners and/or children to either partner.
These issues all need to be considered in so far as they are relevant when plans are put into place for the orderly succession of property.
by Michael Lee