How to protect your Estate
A combination of increased lifespans, rising property prices and the value of superannuation are resulting in families experiencing an increase in disagreements (to say the least) and legal battles over the estates of loved ones.
It is not uncommon for estates with a worth of $1 million and above to be contested. Among the most common of these disputes are those involving defacto relationships and children from previous relationships. The main issues behind these disputes are generally that the will was out of date at the time of death, and a lack of communication. It is recommended that when an individual, whether it be yourself or a loved one, is reaching an age where they are unable to effectively communicate their wishes for their estate that a power of attorney and/or an advanced care directive is appointed to help with this clarification.
The only part of an estate that cannot be legally challenged in court, however, as you get older, these insurance policies become more costly. Self Managed Super Funds and investment bonds also have some strategies that can be incorporated to ensure that your wishes are fulfilled in the event of you passing.
A binding death benefit nomination is a legally binding clause which stipulates that you can nominate a dependent to receive your superannuation. If there is no dependent, your super is paid into your estate and divided as specified by your will. This binding death benefit can generally be paid out as a lump sum, a pension, or a combination, but if it is not going to a dependent, it has to be paid as a lump sum. A binding death nomination to a dependent is the most protected way of handling your super.
If you are concerned about the distribution of your estate, a testamentary trust is a tax effective and protected way of protecting your assets. They can only be implemented upon the passing of the testator, whom dictates the flexibility of their wishes. They are essentially a way of further instigating your will and leaving less room for litigation by family members.