My name is Eep, the educational estate planning program.

I hope you are going well today.

Let me introduce myself before we get started.

I am a simple minded program intended to provide you with relevant information and issues to consider when estate planning.

I was created by my boss, who only did a crash course in HTML, CSS and Javascript, so apologies for any formatting issues you might come across.

My boss is a lawyer, but I am not (as a computer program, it’s hard to obtain the qualifications and relevant work experience that humans do!). Therefore, the information I provide you may be true and correct, but should not be seen as legal advice. Neither does anything I say constitute a lawyer-client relationship between my boss and you.

I am merely here to make your life slightly easier by outlining information specific to you in an easy to understand way.

If you want a human to be accountable for any errors or issues missed, please seek formal legal advice in relation to your estate planning arrangements.

Finally, I only understand the laws of Australia, so if you would like to learn about estate planning for assets overseas, do consider contacting a specialist lawyer in the relevant country you are interested in. If you are curious about what is needed in relation to an estate plan for Australian assets, then let’s get started!

By the way, a record of our conversations and clicks may be retained so that I can keep learning and updating myself to be of better service for the wider public. If we collect any of your personal information, it will be subject to the following privacy policy -

You do not have to give me any specific details (give me fake details for all I care). However, if you do end up wanting my boss to assist you, it makes life easier (and cheaper for you), if he is able to read an accurate transcript of your situation to avoid doubling up.

Is that okay with you?

I won’t snoop then. Just google ‘estate planning guide’ and the State/Territory where you live in to get some useful information! Have a nice day.

Thanks. By the way, you can always save this conversation for your records and reading (just go into the settings menu of your browser and ‘print’ as a pdf).

So how can I assist you today?

Learn about estate planning

Please answer a few quick questions, so that I can understand what’s important and relevant to you.

Which State or Territory in Australia do you live in?

How old are you?

Thank you for letting me know. Unless you are looking to get married, individuals under 18 years old cannot make a Will. If you must require a Will, please consider obtaining formal legal advice, as you may need to apply to the Court to have a Will.

Unless you are interested in pretending to be someone else, or looking to see what may be important in a few years time, you can leave me and go out and enjoy life. [#End]

Are you currently in a de facto relationship? Each State and Territory may have a different definition of what constitutes a de facto relationship for the purposes of estate planning, but the Family Law Act (a Commonwealth ‘rule’) can summarise a de facto relationship as persons who are not related and are not legally married to each other, but are generally living together on a genuine domestic basis. See the following link for more information -

Are you looking to get married?

Are you currently married?

Have you previously been married, or been in another de facto relationship?

Have you completed a formal property settlement with your previous partner?

Do you have children?

Are any of your children from a prior relationship?

Do you have any children under the age of 18?

Do any of your children have special needs or require special care?

Are you intending to have children at all in the future?

Are there other people that you have provided for (financially or personally) throughout your life OR who have been dependant on you in some manner?

Do you have an existing Will?

Do you own assets jointly with another person (a co-tenant)?

It is okay if you don’t know whether you own assets jointly with anyone. Later, I will briefly outline the consequences of owning an asset jointly with someone in the context of your estate plan.

Do you know how you own those joint assets with your co-tenant? That is, do you know if the asset is held as joint tenants or tenants in common?

Whether you own an asset with your co-tenant as joint tenants or tenants in common can impact on your estate plan. This will be discussed later. For now, briefly; owning something as joint tenants means each joint owner 100% owns the asset. In contrast, owning something as tenants in common means each joint owner has a specific percentage in the property, and together it equals 100%.

It’s okay if you do not know how any joint assets are held. This can be confirmed through a paid search, but what is important is to understand how this impacts your estate plan (i.e. you have passed away).

Do you control any companies (either as a director or directly/indirectly as a shareholder)?

Do you control or have an interest in any trust (whether directly or indirectly)?

Do you have a self-managed superannuation fund (known as a SMSF)?

Do you have an interest in a partnership (whether personally, or via another entity)?

Are you a business owner?

Do you have a partner in the business?

Finally, do you own any assets overseas?

Thanks for that, let’s proceed with understanding some of the main issues and considerations that are relevant for you.

I might miss things, but as a start, I hope to provide you with knowledge to ensure you seek appropriate levels of advice for your estate plan.

What is estate planning? defines ‘estate’ to mean ‘the property of a deceased person…viewed as an aggregate’.

And 'planning' means ‘the act or process of making a plan or plans’.

Putting the words together would mean making plans for the property of a deceased person.

For you, it means making sure your assets accumulated by you during life and death (think life insurance paid out on your death) pass to the right people (let’s call them intended beneficiaries) on your death.

You have to appreciate that the way you own your assets will impact what is required for your estate plan.

Specifically, assets held by you personally will fall under a Will, in which case, the assets that can pass to your intended beneficiaries will be those that remain after any existing debts owed by you personally have been repaid or adequately dealt with..

Assets held in companies and trusts do not fall under your Will, and you may need to consider other documents to deal with them (to ensure the assets in those entities pass to the right people)

I’ll give you an idea on who aren’t the right people:

  1. potential creditors of the intended beneficiaries (i.e. people who might sue the intended beneficiaries);
  2. the tax man;
  3. intended beneficiaries who would blow all the money away;
  4. former or potential future spouses of intended beneficiaries; and
  5. lawyers.

Depending on the size of your estate, there is a special type of Will that can be prepared to ensure the wrong people don’t benefit. I will briefly discuss this later but appreciate this type of Will is quite complex and I’d suggest you chat with a lawyer to discuss the options in further detail.

Other than having your assets pass to the right people, it is important to appoint people to ensure your estate is appropriately administered. This person is called an executor, and acts as your legal personal representative when you pass away. They will be responsible for making decisions in relation to your assets, and are required to sign transfer documents on your behalf when you are deceased.

An executor’s responsibility can be summarised as follows:

  1. finding a copy of your Will and going to Court to prove it;
  2. once proven, your executor will locate all assets forming part of your estate (more on this below);
  3. arranging for debts owed by you to be repaid or refinanced; and
  4. having whatever is left over paid in accordance with your Will.

An executor does not need to know how to do all of the above – that is what lawyers and advisors are for – but your executor will be required to sign the relevant documents.

It’s also quite clear that an executor can’t really deviate from their role.

If no executor is available, then people who wish to administer your estate will have to apply to the Court to be able to act as your legal personal representative for your estate. This can cause delays and add additional costs to your estate.

Your estate plan should also appoint a guardian if you have minor children at the date of your death. This ensures there is certainty in relation to who is intended to look after any of your minor children, as opposed to having to go to Court to have this confirmed (which would, again, be more costly and add delays to who takes care of your children).

It is therefore important to consider:

  1. Who administers your estate;
  2. Who cares for any minor children;
  3. Who benefits from your estate.

Why do I need an estate plan?

You are probably thinking, however, why do I need an estate plan, or if I even need an estate plan.

In short, if you are over the age of 18, you should have one.

Having an estate plan ensures there’s clarity on who benefits from your estate, as well as who administers it. This ensures that:

  1. costs incurred to administer your estate are reduced;
  2. any delay of your estate being administered is reduced; and
  3. the risk that the wrong people benefit from your estate is reduced

Would you like some examples of what could happen if you do not properly consider your estate plan?

Here you go:

  • If you pass away without a Will, the law will say who can benefit from your assets. However, this will not prevent people from trying to claim some of your assets for themselves. Reduce the confusion, put your intentions into writing with a valid estate plan. It will, at the minimum, outline your intentions so people without any claim don't try and fight over your assets with your intended beneficiaries.
  • Simple Wills are simple, but they don’t factor in potential concerns you may have for intended beneficiaries. Say you want people to receive assets in a protected environment. Reasons for this may be that the intended people are ‘risky’ individuals (whether due to their profession or being a director of a business) and they should receive assets in a protected environment rather than in their name (to protect the assets against a potential lawsuit).
  • Just because you’re young and potentially in debt to the banks or the government, does not mean that you do not need a Will. Whilst not accessible for you right now, your superannuation and any life insurance will form part of your estate. This could still be a sizeable amount and should be properly considered.
  • So you’re in a de facto relationship. Did you know certain de facto relationships means that your partner receives your assets if you pass away without a Will. This means that if you had assets that you wanted to pass to your family, it could go to your current partner. Having a Will means being able to confirm what assets go where, and not letting the law (which may vary depending on where you live) get in the way.
  • Marriage can potentially affect any Will you have prepared. It might affect it in a manner that you would like, but why risk it changing for the worst? Get a Will that contemplate or considers your marriage, and have it be clear on what happens to your assets.
  • Having children impacts the distribution of your assets if you pass away. While that may be fine if you have a partner, it might mean your partner receives less and your children receives part of your partner's share. As with most things, this can change from State to State.
  • Do you trust giving your assets straight to your children and hoping they make the right decisions when they turn 18 in relation to their inheritance? If you do, that’s great. However, you can ensure there is some guidance for your children in relation to their inheritance by having a trusted family member look after your children’s inheritance. The phrase you need to know is ‘testamentary trust’ and we will briefly discuss this later on.
  • Reminder if you have heard it before, otherwise a new announcement for you. If you own assets jointly with someone, you need to know what happens to your share if you pass away. This can be discussed with a lawyer when doing your estate plan if you wish. In one situation, your interest might pass to the other co-owner. In another situation, your interest could pass under your Will.
  • Having related entities can be complex. There are issues if you have loans to and from these related entities, but you also need to know that assets held in these entities do not form part of your Will. You need to ensure you understand how control in these entities pass if you die. Additional documentation may be required so that the business in a company, or property in a trust, passes to the people you intend them to. Don’t assume that they will.
  • Have you considered what happens to your business if you pass away? If not, then you need to. Whether it is putting in place succession mechanisms or grooming an employee to take over, if you care for the business to continue (whether it is for the benefit of your family or not), you need to ensure the value doesn’t tank if you were to unexpectedly pass away.
  • Do you know what happens to your share of your business when you pass away? Do you expect your family to cause a fuss with your other business partner (because your family knows nothing about your business)? If the answer is no and then yes, then you need to consider if documentation can be put in place to ensure your family receives a fair value for your business interest without adversely affecting the business. If your answer is ‘I don’t care what my family does’, then think about whether you want to take the risk with your business partner’s family (i.e. if your business partner passes away, will their family adversely affect the performance of the business).

Hopefully that is enough convincing for you as to why you need an estate plan.

Okay, let's continue then.

About the executor

So you know estate planning means making sure your assets accumulated by you during life and death pass to the right people on your death.

But before your assets are paid out, someone has to be appointed to administer your estate.

Let me be clear that this person deals with the assets you own in your personal name, and not assets held in other entities such as trusts and companies.

For most people, that is still the majority of all assets they may own.

When considering your estate plan, it is important to ensure the right people are appointed to administer your estate.

Having clarity on who administers your estate as your executor is important as it reduces any delays and costs after you pass away, as it is clear who is responsible for administering your Will.

But also, it’s important for you to pick an appropriate person who is tasked with getting your Will proven, assets located, debts managed and having your assets distributed pursuant to your Will. For example, someone who is savvy in dealing with professionals such as lawyers and advisors would be able to ensure your estate is administered seamlessly compared to another person who just goes with the flow (and may not take administering your estate seriously).

Do note that whoever you appoint as your executor, is bound to administer your estate properly. Failure to do so may mean that they are personally liable for any losses.

Here’s an example of what it means to be personally liable.

  • The executor will receive your estate assets.
  • The executor has a responsibility to pay those assets pursuant to your Will (subject to any debts you may owe).
  • If your executor does not follow their duty, they may have to pay out of their own pocket to correct their mistake.

Whoever you appoint as your executor needs to be aware that if they act in an incorrect manner, they may have to pay out of their own pocket. So, just do…the right thing.

Some questions you might want to consider when appointing your executor:

  • Who would you like to appoint as executor of your estate if you pass away?
  • Who would you like to appoint as a backup executor of your estate?
  • You can appoint multiple people (up to a maximum of four), but ultimately, the more people you appoint, the more they will each have to liaise with each other as they must make decisions jointly and all sign necessary transfer documents as executor for your estate.
  • You could even appoint a professional to act as your executor, you will just need to be aware that your estate may be charged a fee for their service.

The Guardians...of your minor children

Probably more important than your assets are your children.

Whilst children who are 18 are able to at least make legal decisions on their own (even if those decisions are questionable), those who are still under 18 will require someone to look after them.

This is where the role of a guardian comes into your Will. The guardian’s responsibility really is to just care for your children once both parents have passed away.

There’s nothing stopping your child leaving the guardian once your child turns 18, but at least having someone nominated to care for your minor children (should both parents of the children pass away) will ensure they are cared for when they need it most.

If your Will does not nominate a guardian, unnecessary costs and delays may be incurred to have a Court nominate an appropriate person to act as legal guardian for your children.

Think about who you would like to appoint to act as guardian for your minor children.

Think about if there are any backup persons you would like to appoint as guardian.

Again, you can have multiple guardians, but, if you do, then it is worth making sure your guardians are able to work together (whilst also considering the practical implications if there are multiple guardians who all live in separate locations). If you want a fictional example of parents who did not consider the teamwork required for guardians, watch the 2010 Katherine Heigl and Josh Duhamel movie, Life As We Know It.

If you see a lawyer when drafting a Will, do consider if there are appropriate financial assistance provisions in your Will that enable your guardians to receive compensation for caring for your children.

It might be that you have a structure set up in your Will that enables income to be paid to your minor children or to the guardians on behalf of the minor children. More on that later, but there are appropriate strategies in ensuring your children benefit from your estate without having their guardians be out of pocket.

Further, additional care may be taken to ensure that any of your children with special needs (even if they are over 18) are also cared for in an appropriate manner and any assets to be given to them managed accordingly.

How assets are held

Next, on to the actual substance of your estate plan. Who gets what, and who gets what if the initial receiver is not around.

Something to appreciate: do not assume! That is, don’t make an ‘ass’ out of ‘u’ and ‘me’.

In the context of estate planning, don’t assume that your assets will pass to your intended beneficiaries.

For example:

  • Passing away without a Will means you die ‘intestate’. That means the law determines who benefits. Whoever benefits under the law will change from State to State. It will then change depending on if you are married, or have children. Reduce the uncertainty, even just preparing a basic Will is better than leaving it up to the law to decide.
  • Your superannuation does not automatically form part of your estate. Forms are needed to be signed to have your superannuation automatically form part of your estate. Where no form is signed, then it is the responsibility of your executor to liaise with the trustee of your superannuation fund to see if your superannuation can be paid into your estate. This will cause delays that could be reduced by having a form signed.
  • Where you control a self-managed superannuation fund (an SMSF), care needs to be taken to ensure control of this entity passes appropriately if you do not have necessary forms prepared.
  • Did you know marriage, and even entering into a de facto relationship, may impact who benefits if you pass away without a Will? Even further, if you have a Will, marriage and entering into a de facto relationship may potentially impact certain provisions from your previous Will creating uncertainty.
  • Did you know having children may impact how assets are distributed if you pass away without a Will? This will differ from State to State but in Queensland, your estate is shared between your partner and surviving children. You need to be aware what the laws say where you are based if you pass away without a Will, as it may not align with what you intend. Please note the laws may change depending where you live.
  • If you want your partner to benefit from your entire estate, but you pass away without a Will, then (in Queensland, at least) your estate is shared between your partner and surviving children. You need to be aware what the laws say where you are based if you pass away without a Will, as it may not align with what you intend. Please note the laws may change depending where you live.
  • If you wanted your share in the property that you own jointly with your co-tenant to pass to a particular person other than your co-tenant, and that asset is held as joint tenants, then your co-tenant will actually receive your share in your estate automatically. This needs to be contrasted if you held your share in the property as tenants in common.
  • Assets held in companies don’t actually get distributed under your Will. Those assets remain in the company, and you have to ensure the shares in the company pass to the relevant person who you wish to take control of the assets in the company. Where you operate a business from the company, then you need to consider any succession plan for your business as without anything in place today, uncertainty will arise in relation to the continued operation of the business should you pass away.
  • Assets held in trusts don’t form part of your estate distributed under your Will. Instead, those assets remain in the trust. If you are a trustee of a trust in your personal capacity (that is, not controlling through a company), then you have to understand who takes control if you pass away.The person who becomes the trustee will have the ongoing operational control of the trust (and therefore can pull assets out of the trust to themselves). This gets complicated where trusts have roles such as ‘appointors’, ‘principals’, ‘guardians’ or even unitholders, as those people may have the power to decide who has operational control of the trust. It is therefore important to review the succession of any trust with care as there are various issues that may arise in ensuring control of assets in a trust pass to the intended persons.
  • You need to consider what happens to your interest in your business if you pass away. Will your partner siphon money and clients away to a new business for their own benefit, or will your family cause tension with the ongoing operation of the business once you pass away? These are questions that don’t have to arise if you put in place proper documents to consider this.
  • The law changes from country to country. Just as I don’t want you to assume the rules where you live, I don’t want you to assume how your assets overseas will pass. You should consider contacting a specialist lawyer in the jurisdiction where you hold your overseas assets to ensure there are certainty and clarity on how assets pass.

Some broad things you need to appreciate are as follows:

  1. Your Will only deals with assets you own directly.
  2. Even if you own assets directly, if they are held as joint tenants with someone else, they do not fall under your Will (or even the relevant succession act laws if you pass away without a Will).
  3. In contrast, interests in a trust, company, superannuation (including a self-managed superannuation fund), partnership or business may not automatically be dealt with if you pass away, and may not even be governed through a Will.
  4. Additional documents (on top of your Will) are then required to be prepared to manage your related entities (if any).
  5. Get a separate Will for any assets you may own overseas.

Talking about Wills, let’s discuss this first, as it will cover all assets you own personally.

Personally held assets

I hope I’ve made it clear that your Will only covers personally held assets.

However, not all personally held assets are dealt with under your Will (remember assets held as joint tenants).

Assets held in other entities need to be considered separately.

We will consider some of the relevant issues based on what you have told me later on.

Jointly held assets

Let’s talk about the exception to the rule, jointly held assets.

As mentioned before, owning an asset as joint tenants means all owners have a 100% interest in the asset. What this means is that once you pass away, your co-tenant retain their 100% interest in the asset. Oddly enough, you do not get to pass your share to anyone. Your interest just ends.

In contrast, owning an asset as tenants in common means each owner has a distinct interest in the asset, and all owners of the property will have all of their interest equalling 100%. This means that if you pass away, you can distribute your share in the property to people under your Will, as your co-tenant does not have an interest in your discrete share.

The question you must ask if you own your asset as joint tenants is – do you want your co-owners to receive the property if you pass away. If yes, then you might not need to do anything. If no, then you need to take steps to make your ownership to be held as tenants in common. This, of course, means discussing this with your co-owners.

There are two ways you can own jointly held assets.

The first is as joint tenants and the second is as tenants in common.

A title search of the relevant property normally confirms how joint assets are held (you have to pay for that search if you don’t have an up-to-date one).

Owning an asset as joint tenants mean that you and each other co-owner completely owns the asset (you both have a 100% interest in the asset).

Owning an asset as tenants in common means that you and your co-tenant has a distinct share in the asset (for example, 50% each).

This impacts on how the joint asset passes under your estate plan.

Specifically, if you own an asset as joint tenants with your co-tenant and you pass away, then your co-tenant will automatically receive the asset and it cannot be distributed under your Will (this is because your co-tenant also owns 100% of the asset).

In contrast, if you own an asset as a tenant in common with your co-tenant, your distinct share may be gifted under your Will (or distributed under the succession law where you live if you don’t have a Will).

You need to appreciate this as you may need to take steps to separately ensure your jointly held assets pass as you intend.

You need to appreciate this when you buy an asset jointly with someone, as you will need to consider how you want that asset to pass if you are deceased.

Unrelated to estate planning, people may prefer one way of owning an asset compared to another as it reduces the risk of the relevant owner. For example, if you own an asset as joint tenants with another person, if the other co-owner is sued, then because the co-owner 100% owns the asset jointly with you, the entire asset may be at risk if sold as a result of a litigation.

Other personal assets

Other than the exception in relation to assets held as joint tenants, your personal assets are covered under your Will. This includes (but is not limited to):

  1. any property you own (such as real estate, investment shares, shares in companies and personal property);
  2. any bank accounts in your name;
  3. any amounts people or other entities may owe you;
  4. any business you may operate as a sole trader;
  5. shares in companies which operates a business;
  6. any life insurance if paid to your estate; and
  7. any superannuation if paid to your estate.

Your Will can also potentially ensure any role you may have in a trust passes accordingly. This is because some trust documents (not all) provide the ability for a person in a role to appoint a successor. But you need to read the trust document and ensure there is the power to do so.

Part of estate planning is seeing who you would like to benefit from what assets.

It also requires you to understand how you own your assets.

When assets are held in other manners other than by you personally, you need to consider how to get those people to benefit from assets held in those entities.

How people can receive assets

There are many ways to give personally owned assets to someone under your Will. Here are some examples:

  1. directly;
  2. through a testamentary trust (either discretionary or fixed);
  3. by way of life estate; or
  4. by way of right of occupancy.

I’ll just discuss about the direct option and through a testamentary trust.

The other two options are too advanced for my programming and can be quite complicated in its operation. Please consider discussing these options with a qualified lawyer if you are interested in learning more.

Giving an asset directly to someone under your Will is the simplest option to structure your Will. This means any asset passes straight to the intended beneficiary. It means the intended beneficiary receives the asset in their name and they do what they want with the asset in whatever manner they wish.

Whilst this is great as it’s simple and cost effective, if you have beneficiaries who do not wish to receive assets in their names (think people who get sued all the time, or might get sued by way of being in a high risk occupation), giving them assets may cause them more headaches than not.

At the end of the day, they should be happy to receive something from your estate, but if you want, you can consider where they come from and pass your assets into a testamentary trust for the beneficiary to control and benefit from.

You might be wondering what a testamentary trust is. In short, a testamentary trust is a trust established under your Will. Going further, a trust is a relationship between someone who holds assets (being the legal owner of the asset and called the ‘trustee’) for the benefit of other people (being the beneficial owner of the asset and called the ‘beneficiaries).

It is also the hot topic for estate planners in recent times. The structure can potentially offer asset protection, tax planning and succession planning benefits for individuals and their families.

Here are some examples:

  • An intended beneficiary considers themselves as a high-risk individual due to the nature of their work (for example, they are a surgeon, accountant or lawyer). The beneficiary wants to own as little assets as possible due to a potential claim against them personally. Giving assets to a testamentary trust allows the beneficiary to receive assets in an entity separate from them so they are not assets of the beneficiary if a law suit rises, but, the beneficiary can still benefit from the assets.
  • An intended beneficiary considers themselves as a high-risk individual due to the nature of their work (for example, they are a surgeon, accountant or lawyer). The beneficiary wants to own as little assets as possible due to a potential claim against them personally. Giving assets to a testamentary trust allows the beneficiary to receive assets in an entity separate from them so they are not assets of the beneficiary if a law suit rises, but, the beneficiary can still benefit from the assets.
  • You want to give assets to a someone who has or may have children in the future. Giving assets into a testamentary trust structure provides some tax planning opportunities for the intended beneficiary and their family to invest the assets transferred into the trust and having the income generated from the investment distributed to themselves and their family. There is a specific tax provision that states income generated from a deceased estate may be distributed to minors, and those minors will be taxed as if they were adults. This means the intended beneficiary doesn’t have to pay tax on such amounts at their tax rate, but they can give some income to their children to pay on separate tax-free thresholds instead.
  • You want to give assets to your children, but you do not believe them to be responsible enough to receive full control of the assets. You fear they may blow all the money on blackjack and hookers. You give the relevant assets into a testamentary trust and you give control jointly between your respective children and a responsible family member (such as a sibling). This way, your children will not blow all the money as they need to liaise with another family member. This helps protect their inheritance.
  • You want to give assets to your children, but you just don’t trust the relationship they are in, or the relationship they might be in. You can give your assets into a testamentary trust structured appropriately to reduce the risk of the relevant spouse receiving any of your hard earned assets.
  • You want to give assets to your children, and you know they may have children in the future (your grandchildren). Giving assets into a testamentary trust structure provides some tax planning opportunities for your children to invest the assets transferred into the trust and having the income generated from the investment distributed to their children (your grandchildren). There is a specific tax provision that states income generated from a deceased estate may be distributed to minors, and those minors will be taxed as if they were adults. This means your children don’t have to pay tax on such amounts at their tax rate, but they can give some income to their children to pay on separate tax-free thresholds.

Now there are many types of testamentary trusts around, but the one that is most commonly found in Wills are discretionary testamentary trust.

What this means is that the legal owner of the asset (the trustee), has the discretion to decide who can benefit on a year by year basis.

This provides asset protection benefits by ensuring assets are not transferred directly to a person’s name (which would be open to attack by a lawsuit), as well as tax planning opportunities by having the legal owner decide who benefits from the income in the most tax effective manner.

Now, testamentary trusts are complicated, and lawyers can spend a whole weekend talking about various topics so I will leave the above information as food for thought, and for you to consider whether it would be useful for your circumstances or loved ones.

If you want more information, please google ‘testamentary trust’ and you’ll see various articles and fact sheets explaining what they are and their benefits.

If using a testamentary trust in your Will, here are some things you need to consider:

  • A testamentary trust is not of much use if you are not making money from it. In this regard, you need to ensure assets passing into a testamentary trust have enough value to generate sufficient income to cover ongoing accounting fees and maintenance costs.
  • Who should receive their gift of assets in a testamentary trust? That person will be the main beneficiary. Generally, the testamentary trust terms will then broaden the beneficiaries of that trust to include the individual’s wider family.
  • How many testamentary trusts should your Will have? Keeping in mind ongoing fees with having testamentary trusts operational.
  • Can some beneficiaries receive their share in a testamentary trust, and others in their own name?
  • Who should control the testamentary trust? Normally this is the person who is intended to benefit from the gift if you trust that person to manage the assets. Where an intended recipient is still young and experience, you may appoint trusted family members/friends or professionals to fill this role.
  • Who is the backup person to control the relevant testamentary trust?
  • Should you have multiple persons control the relevant testamentary trust?

As if it wasn’t clear enough, testamentary trusts are complicated and are not able to be generated from do-it-yourself Wills. You should contact a legal specialist if you want to know more and whether it can benefit your family.

Planning how to pass your personal gifts

Appreciate there are many other ways people can receive a gift under your Will, but you should talk to a lawyer about the method most appropriate.

Other than considering how gifts are received (e.g. directly, in a testamentary trust or through some other right), you should also consider how you actually make the gift.

There are two general methods in making a gift. The first is to make the gift hardwired and the second is to keep it flexible.

Specifically, the first option gives the gifts directly to persons A, B and C. In contrast, you may decide to give your assets to person D, and then write a non-binding wish that person D gives your assets to persons A, B and C in a particular manner.

Now, the second option sounds crazy. What stops person D from just pocketing all the assets? The answer is nothing!

Crazy right?

That said, in certain situations, it makes more sense. Specifically, when you pass away, you’ll leave a bunch of other assets that you may not immediately consider such as clothes, jewellery/watches, furniture and other items around the home (think pots, pans, board games and electronics). These are your personal items.

You’re right, in certain situations it makes more sense. Specifically, when you pass away, you’ll leave a bunch of other assets that you may not immediately consider such as clothes, jewellery/watches, furniture and other items around the home (think pots, pans, board games and electronics). These are your personal items.

It might be very cumbersome to list how you would like to distribute each and every one of your personal items, so some estate planning lawyers have developed a method to, say for example, give all personal items to a person (or group of people), and it is up to those people to on gift relevant items to people you mention in a nonbinding document (such as a letter).

The advantage of this approach is that you do not need to change your Will every time you wish to change who receives a personal item (which means not having to go to a lawyer if you want their legal advice on the effectiveness of your gift).

The disadvantage is that such a method is not legally binding, and there is nothing stopping the intermediaries from just pocketing all your personal items.

And this is why this method is generally only applied to personal items because under your Will, you can add certainty on who receives the more valuable assets of your estate (such as superannuation, life insurance, investment shares and real estate).

Ask your estate planning lawyer their preference, as ultimately it is a matter of taste.

Do you want some tips on what to ask yourself when thinking about your estate plan and how assets are to pass?

Alright, get an A4 paper, turn it on its side and draw a table.

On the table, have the:

  1. first column labelled ‘Asset’ (feel free to group personal items as one category, with exceptions only if a particular personal item is intended to pass to a different person);
  2. second column labelled ‘How asset held’;
  3. third column labelled ‘Value’;
  4. fourth column labelled ‘Who is intended to receive the asset’;
  5. fifth column labelled ‘How is asset received (including whether conditions should apply) and if through testamentary trust, who controls initially’ (feel free to leave this as N/A to discuss with a lawyer);
  6. sixth column ‘Who is intended to receive the asset if the initial beneficiary has passed away’;
  7. seventh column ‘Again, how is asset received (including whether conditions should apply)and if through testamentary trust, who controls initially’ (feel free to leave this as N/A to discuss with a lawyer).

It might be that everything goes to one person initially. However, it is important to ensure you at least consider the situation if that person predeceases you.

Also remember there’s the issue of any monies you might owe when you pass away that may decrease the value of your estate or unbalance things.

Estate challenges

Okay, so having learned how assets owned by you personally are dealt with under a Will, you need to appreciate that there are laws that enable certain people to challenge your estate.

Although the laws may change from State by State, generally the following people can have a claim against your estate if they are unhappy about the provision under your Will:

  • spouses (including de facto partners);
  • children (including step-children); or
  • people who have been dependent on you.

The definitions can be complex, but you have to be aware that, if there are unhappy people who fall into any of the above categories, then your Will can be challenged.

But that is just step one.

Step two of a successful estate challenge is for the person challenging your Will to prove that they have not been properly provided for.

If things get to that stage, there will be lawyers involved. If you feel you might fall into the situation above, you need to contact a lawyer now, to discuss options to manage any risk.

Oh! Also, if you have assets in New South Wales, be aware of something called ‘notional estates’ or something like that. The gist of this concept is that if you take steps before you pass away to move assets out of the way so that they do not fall under your Will, then those steps can be unwound and those assets would fall under your Will.

It’s complicated, so do talk to a lawyer about this.

Onwards to everything else. Here are some things you need to know about those assets that are not automatically covered under your Will.

Assets held in superannuation

I mentioned above that your superannuation benefits may not necessarily form part of your estate (to pass under your Will).

This is because it is held in a superannuation fund. You are not the legal owner of your superannuation, although you may be entitled to it upon certain conditions being met.

Death is one such condition, which means your estate may be able to receive the superannuation. The transfer, however, is not automatic.

There are many ways you can get your superannuation paid, but firstly, you need to appreciate the following.

Only certain people can receive your superannuation directly. That means they receive your superannuation from the superannuation fund and not through your estate.

Those people are your spouse (including a de facto or same sex spouse), child and any person who had an interdependency relationship with you (they were dependent on you).

If none of the above people are around, then the only other person able to receive your superannuation benefit is your personal legal representative (your executor).

The tax on the superannuation payout will also change depending on who benefits, and I suggest you talk to a professional advisor if you want to know the specifics.

How your superannuation payment can be distributed will also change depending on who benefits. That is, some people can receive it in a lump sum whilst others can have it paid as an income stream. Again, talk to a professional advisor if you want to know the specifics.

Anyways, let's consider how your superannuation can be paid out.

There are two general ways your superannuation can be paid out when you pass away.

Firstly, you can have your superannuation benefits paid automatically to the intended beneficiaries (provided they are eligible recipients). Alternatively, you can leave the discretion with the trustee of your superannuation fund.

There are various forms and documents that can be prepared to deal with your superannuation in either way above, but they can be narrowed down to either a binding death benefit nomination (commonly known as a BDBN) or a non-binding death benefit nomination.

As the name suggests, one is binding and will be automatic once you pass away (provided it has been drafted properly), and the other leaves the discretion for your trustee to pay out in a better manner.

If you have proper advice, sometimes the binding death benefit nomination is better as there is certainty your superannuation will be paid in a manner that you wish.

You may also hear the term ‘reversionary pension’. This is only really relevant for those people who has a pension being paid out at the time of passing away. A reversionary pension means there’s an automatic defaulting on who benefits. Again, you should talk to a professional about the specifics.

If you didn’t know already, superannuation is highly regulated, and there are special people around who are authorised to provide financial advice to you in relation to your superannuation.

Seek out those people! Don’t go getting advice from a random person who can’t show you their license (especially an online program!).

What I talked about above relates to superannuation for everyone.

However, I understand that you have a self-managed superannuation fund (which is a superannuation fund that you can make decisions on how your super is invested), let's call it SMSF in short.

The second most important aspect of your self-managed superannuation fund in relation to your estate plan (other than ensuring your superannuation passes as you intend), is ensuring control in this entity passes in a consistent manner as your superannuation benefits.

At the minimum you should get either the payment of superannuation or control of the superannuation fund right.

At the best, you get both right.

There are plenty of cases of people fighting over superannuation in a SMSF.

Would you like an example?

Here’s the story of Katz v Grossman:

  • Dad had a SMSF
  • Under superannuation law, you need at least two individuals to act as the trustee for the SMSF (the legal owner)
  • Dad was a trustee with his daughter (Linda)
  • When Dad died, Linda appointed her husband to ensure the superannuation law was not breached
  • Dad left a non-binding death benefit nomination to pass his superannuation between Linda and his son (Daniel)
  • Linda and her husband did not follow the non-binding death benefit nomination and paid everything to Linda
  • Daniel was unsuccessful in challenging this.
  • Dad got both the payment of superannuation and control of the superannuation wrong.

Here’s the story of Wooster v Morris

  • Dad left two adult daughters from his first marriage and his second wife (Morris).
  • Dad and Morris were the trustees of the SMSF
  • Dad made a binding death benefit nomination in favour of his two daughters
  • Dad died with about $925,000 worth of superannuation benefits.
  • Morris took steps to stay in control of the SMSF and then pay herself the superannuation benefits.
  • It was found that Morris had to follow the binding death benefit nomination in favour of Dad’s daughters.
  • Here, Dad got the payment of superannuation right, but the control wrong, and although there was a happy ending, it came after incurring unnecessary legal fees.

Did you want one more example?

Here’s the story of Munro v Munro:

  • Dad passed away leaving step-mum as trustee with another person, for the superannuation fund.
  • It was Dad’s intention that his two daughters benefit from the superannuation, by having the superannuation pass into his estate
  • As it turned out, his binding death benefit nomination was not properly prepared and as a result, step-mum could make the decision not to pay the superannuation into Dad’s estate
  • Dad’s two daughters were left without having the superannuation paid into the estate which was held to be correct
  • This is the story of Dad getting the payment of superannuation wrong, and even failing to have control of the superannuation pass properly.

So that’s superannuation. I’ve only scratched the surface. When a lawyer assists, they are normally tasked with ensuring your SMSF document contains sufficient power to effect what is required.

Assets held in companies

Companies… typically seen carrying on businesses or banking money. That said, this is an assumption, as at the end of the day, different advisors utilise companies for different purposes (including holding or flipping (buy and sell) real estate).

What you need to know in relation to estate planning is that assets in a company are not assets that you personally own.

The question therefore is how does control in those assets pass.

In order to understand that, you need to know a bit about directors and shareholders.

Did you want a quick summary about each role?

The director’s role in a company is to pretty much make the decisions for the company. This will involve them signing documents where necessary as they decide what contracts the company enters into. Do note that other people can make decisions for the company (such as an attorney or agent), but they need to be appointed by the directors.

The shareholders of the company are the people who reap the rewards of the retained profits of the company. That is, after the company makes a profit and pays tax, if such money is to be paid out, they would be paid to the shareholders (I know there are other ways to pay money out such as fees and wages, but let’s keep it simple). The shareholders also have the ability to dictate who the directors are (subject to the terms of the company’s governing document).

Here’s a quick summary what you need to know from an estate planning perspective.

In terms of estate planning then, the key role to consider is not the director, but rather the shareholder. This is because the shareholder can decide at the end of the day who the director is.

Also, a shareholder of a company has an asset that can pass under the shareholder's Will (if the shareholder is an individual). It is the shares in the company.

The question therefore is whether you own shares in a company, or if they are held by some other person or in some other entity (such as a trust).

If you own shares in your own name, you can gift those shares to particular people under your Will, and the recipient will be able to take steps to take control of the company.

If shares are held in other entities such as a trust, or even a partnership, you will have to consider how estate plan is related to those entities (which you can find out at the end of this chat).

If you do happen to own the shares in a company, then you need to query if multiple people should receive the shares and if so, in what proportions. Further if you have only 1 share in a company, but wish to gift the share to multiple people, you may need to take steps to split the shares into a divisible number. Otherwise, your executors will have to take that step.

You should also consider if the multiple people receive shares can work together. If you gift shares to various people and they fail to work together, there could be a dispute at a later time.

In certain situations, professionals may suggest whether steps are able to be taken to restructure assets to be held in separate companies so you are able to give the shares in the respective company to the relevant beneficiary (without having them own shares in the same company).

This means that they won’t have to work together!

Look, as with everything, if you hear the words ‘restructure’, you should be asking your advisor to provide written advice so if something goes wrong (let’s say you get hit by an unexpected tax bill), you can ask your advisor what happened.

Whether it is worth a restructure, is a matter of balancing the costs and advantages (certainty for your estate plan against the costs incurred to undertake the restructure).

Some other things about companies. Some people might want to lay down some rules if they were to pass away. Such rules could dictate who can be a shareholder or director of the company.

This is commonly seen where a company conducts a business, and the controller of the business wants to ensure appropriate people are appointed as a director upon their passing. I mention this because it is worth having your lawyer review the constitution of any company to ensure there aren’t clauses lying around to surprise you, or restrict who could benefit through the shares under your Will!

Do you want an example on the various ways to pass control in a company properly (provided an individual owns the shares)?

The simple one:

  • Mum held 1 share in a company.
  • She is the only shareholder of the company.
  • The company holds term deposits (or investment shares).
  • She would like her three daughters to benefit equally.
  • Mum took steps to split her 1 share into 3 shares, and then made a gift under her will of 1 share in the company to each daughter.
  • When she passes away and if the daughters all agree, the term deposits held by the company can be cashed and distributed to the daughters through their shares in the company.
  • Now if mum anticipated her daughters fighting (due to differences in investment knowledge and personality), she could take steps before her death to transfer the term deposits into separate companies and pass the shares in each of her companies to the relevant daughter.
  • In this case, the term deposits/shares were in the sum of a few million dollars, and could not be transferred out of a company environment, so she required legal advice to ensure no adverse taxation issues relating to the investment shares.

The business example:

  • Dad operated a business through a company.
  • He has two children, A and B.
  • A is involved in the business and B wants nothing to do with it.
  • Dad has to make sure the shares pass to A under his Will.
  • Let’s assume Dad wants A to take the running of the business but have B still benefit a bit.
  • Dad could gift 80% of the shares to A, and 20% of the shares to B under his Will.
  • Dad is also a bit concerned that A won’t have the expertise to manage the business when Dad is not around, so he would like to ensure at least two independent directors are appointed to assist with the ongoing operation of the business.
  • The company’s governing document was then amended to ensure that upon Dad’s death, there were always at least two independent directors appointed with A.

Just before moving on. Be aware of loans to and from the company. If the company owes money to other people, that loan stays even when you pass away. On the other hand if you owe money to the company, again, be careful as this may impact the people benefiting under your Will (who doesn’t receive shares in the company). I won’t try to bring in tax lingo – but the term Division 7A loans cause grief to advisors all the time, and it arises normally with loans made by a company to related people or trusts (or a gift or some form of financial benefit from the company to related people or trusts of the company.

Assets held in trusts

Trusts are quite funny, they are not like you and me, nor are they like a company. That is when you say ‘I have trust’, you are actually saying ‘someone (maybe me or an entity I control such as a company) holds assets for the benefit of others (which can include you)'.

What this means is that a trust needs a legal person to operate it. A legal person can be an individual or a company. That legal person is called the trustee.

Importantly, however, the trustee does not hold the asset for their own benefit. Instead, they hold it for the benefit of other people (called beneficiaries, and which can include you and your family).

Do note that who the beneficiaries are will change depending on the trust document, and their entitlements to the trust asset will also vary depending on the trust document (i.e. from having a fixed set percentage to potentially benefiting if the trustee says yes).

From an estate planning perspective, this means that assets in a trust cannot be directly dealt with under your Will (because you would not hold assets for your own benefit – they are held for other people’s benefit, and you wouldn’t like someone to deal with your assets without your permission).

The major question, therefore, is “who controls the trustee if I die”?

The answer to this question will change. It will depend who the trustee is, for starters, and then will depend on various factors including:

  1. What does the document governing the trust say?
  2. Is there some role in the trust document that decides who is trustee? In which case, maybe that is the important role to consider about (to be elaborated on later)?
  3. Can the trustee, or the person who can decide who the trustee is, appoint a successor?
  4. Can you update the trust document to include a power to appoint a successor?
  5. If there is nothing in the trust document, what does the law say?

Unfortunately, there is no single answer to each question. Every trust document is different, and the law can change depending where the trust is based.

What did come out, however, is that there may be another role. The term commonly seen is ‘appointor’, ‘principal’ or ‘guardian’. And that role often has the power to decide who the trustee is.

You can see why it is important for the role mentioned above to pass properly. If you give the right people control of that role when you pass away, they can always appoint themselves as the trustee for the trust and be in control of the assets of the trust.

Do note there are two ways to pass control. Either through your Will by specifically mentioning the relevant power in the trust document or by having a separate document prepared to confirm the successor nomination.

Following me?

The take-away is to ensure you pass all of the control roles in a trust properly. Chat to a lawyer to review your trust document and confirm how this can be done.

All this talk about passing control relates to the fact that you want the person to benefit from the asset of the trust, to be the person in control.

There are situations when you might not want them to align.

For example, you might want someone to benefit, but you don’t trust them to manage the assets (someone not investment savvy). In these situation you would want to appoint other people to ‘control’ the trust for the benefit of your intended beneficiary. That said, you must trust that those people will do the right thing.

There are ways to ensure you can rule beyond the grave, but they are often complicated, costly and inflexible.

Another issue to consider is if you want multiple people to take control and benefit from the trust.

In these situations the big question on whether they will get along is highlighted. Person A might want to invest in this manner, and Person B would rather invest in a different manner. Personalities clash, and then the trust moves to a halt.

There are strategies that can be implemented to ensure each person takes control of their own share, but that would require restructuring if multiple assets are owned in one trust. Whilst a solution can be found, it is just a matter of whether the costs associated with restructuring are weighed by the benefit of having peace of mind that your assets will go to the right people, without fight.

You may hear words such as ‘trust splitting’, ‘trust cloning’ and ‘umbrella trusts’. These are often associated with estate planning strategies for trusts and ensuring multiple recipients receive their own share of the trust’s asset to operate with. All must be only considered with specialist advice, as although they can each offer their own solution, they each have their own drawbacks.

I’ve highlighted some of the issues to ponder about with assets held in trusts. This can get more complicated with more trusts, or alternatively simpler as you just pass control in each trust to the intended person (rather than dividing one trust between many).

Here are some common issues to consider with your trust document (appreciating that all trust documents can be different):

  1. Your trust document states who succeeds you and there is no power to change that nomination.
  2. Your trust document does not allow relevant people to nominate a successor in your Will.
  3. Your trust document has restrictions on who can be a successor.
  4. Your trust document does not have sufficient power to let you change the terms of the document to do what you want.
  5. Your trust document does not have broad enough powers to let you nominate the people you want (i.e. multiple people in a variety of manner, such as successively or by majority if more than 2).

Trusts are complicated entities (like all entities), and in terms of estate planning, it is always recommended you have a legal specialist to review the trust document to ensure things pass as intended so you can have some peace of mind.

Do note the trusts I have been talking about are considered your standard ‘family’ or ‘discretionary’. There are various other types of trusts out there (40 + and counting), so please don’t assume anything, and get things checked.

Just to round off a bit about trusts, did you want an example of what issues can commonly come up with estate planning and trusts?

Here you go.

To have an express nomination or leave it as is

  • A common clause in some trust documents are that once a controller (or the last controller) passes away, that controller’s legal personal representative is appointed as the successor controller.
  • Whilst such a clause is useful if your executor (remember your executor is your legal personal representative) is the intended person you want to take control of that trust, it may be troublesome if you update your Will and forget to consider your trust.
  • In that situation, you may update your executor of your Will and inadvertently give that person control of the trust you intended someone else to control.
  • As such, express nominations do offer certainty as a change of your Will would raise your successor nomination to the Will drafter’s attention.
  • Alternatively, having a nomination made in a separate document means that even if your Will is updated later on, the nomination stands. In contrast, the issue may be you forget about this separate nomination as it is not either in your Will or in the trust document.

Multiple people, multiple assets, one trust

  • Mum and dad left a share portfolio in the family trust.
  • A and B were appointed as successive controllers of the trust.
  • Unfortunately, A is a professional financial advisor who is well-versed with the stock market. In contrast, B lives the hippie life and is sceptical with all things blue chip.
  • A and B want to go their separate ways with the share portfolio, but they are joined by the hip by having the entire portfolio in the same trust. If one of them leaves with their share, there will be a big tax bill!
  • Strategies such as trust splitting and trust cloning are considered.
  • Each with their own advantages and disadvantages, a restructure was made so that A could manage 50% of the share portfolio on his own and B could manage the balance 50% of her own. They also took additional steps to ensure the successor of their respective shares stayed within their friends and family.

Multiple people, multiple properties, one trust

  • Mum and dad left two properties in the family trust.
  • A and B were appointed as successive controllers of the trust.
  • Unfortunately, A and B do not get along and wish to take one property each and leave.
  • However, if one of them leaves with their property, there will be a big tax bill!
  • Strategies pre-death such as trust splitting or trust cloning may have assisted with avoiding this issue.
  • Each strategy has their own advantages and disadvantages in getting one property into a structure for each of A and B.
  • The end position is that A will take control of one property and B will take control of the other property without having to be involved with each other.

Before we keep going, please note that certain types of trusts may have multiple governing documents (imagine documents such as unitholders agreement or property agreements).

Please also consider that when you have trusts, there may also be amounts owed by the trust to other people (maybe the trust owes money to them, or there is something called an unpaid present entitlement owed). You need to be careful that if you pass control in a trust to A, and the trust owes money to B, then A will be required to repay B out of the trust if B calls on the money. The tip is to ask your lawyer about loans and unpaid present entitlements.

Okay, let’s keep moving.

Assets held in partnerships

There are many types of partnerships out there, but the relevance that a partnership has with your estate plan is how you hold your interest in the partnership.

Do you own your interest personally, through a trust or through a company.

Depending on how you own this interest, will impact how your partnership interest can pass under your estate plan.

Broadly, the rules relating to assets held personally, through a trust and company will apply to your interest in a company.

If you hold your interest personally, then the assets can find its way back to your estate through your Will.

If it is held through a company, then you need to consider the shareholders of the company.

If it is held through a trust (either directly, or having a trust own shares in a company that is in the partnership), then you need to look at how control in that trust passes.

Often there will be some form of partnership agreement in place to set out what happens if a partner dies, or a key person related to a partner dies.

If there is no such agreement in place, then they will need to managed through the rules outlined above.

Now it is all very complex with partnerships, so do discuss what happens with a specialist and even with your partners (from the partnership), as it may have never been a consideration for you all.

Alright, I kept this one short, as part of the fundamentals have been previously covered.

Business interests

When you conduct a business. Your estate can get very complicated.

The issues to consider are also related on how you own your business. Are you a sole trade (so you operate through your own name)? Is there a company, or a trust?

The issues outlined when discussing passing assets held in those manners will continue to apply to business interests, but there are other aspects to factor in.

  • Have you considered a succession plan if you were to pass away?
  • What would happen to the business?

You may not want it to all fall apart because you did not consider having the right people appointed to take the running if you pass away.

It may be your intention that the business continues to generate profit for your partner.

It may be your intention that your child eventually succeeds you in the operation of the business.

It may be the case that there is an employee who would take the mantle when you pass away.

Regardless, these are the things that have to be considered in relation to the business. What happens? What happens to any contacts or clients? Who takes charge? Is there a person or group of people who should form some kind of board to keep the business moving?

There are many professionals out there who provide services assisting with a business transition. That is, they help bring the next generation into the business. Give it a google search, or see if your advisor is one of them.

Once you add business partners to the mix. There are even more issues to worry about.

Whilst having the one of you, the issue is what happens and what do you do to keep things moving.

Having another partner in business with you means, even if you pass away, the surviving partner may be able to continue the business.

Whether the business continues to prosper without a partner, or if the business suffers internal strife is a risk you need to consider.

For example, your business partner may (I’m not saying they will) slowly move clients to a separate entity that they fully control, leaving your intended beneficiaries with nothing.

On the other hand, your intended beneficiaries of your share may cause a ruckus for your business partner which disrupts the continuation of the business.

Both examples are no what either you or your business partner wants.

It is therefore necessary you consider getting agreements put in place.

Specifically, some form of ‘shareholders’ agreement to outline the rules of your business relationship, and some form of buy sell/put call deed which outlines how your beneficiaries and your business partner can have a clean exit from each other once you pass away.

Would you like a bit more information about the two types of agreement?

A shareholders agreement (or unitholders agreement or partnership agreement depending on the business structure) is a document that governs how decisions are to be made between the business partners. Although not strictly in relation to estate planning as it can include clauses relating to restraint/non-compete provisions on a business partner existing as well as who can be appointed to make decisions, some agreements do consider what happens when a business partner passes away.

In other situations, a buy sell deed or put call deed (I’ll call it a buy sell deed) is quite focussed on ensuring that each business partner (or their representatives) receive their market value for their share in the business upon certain events happening to them. For example if you were to pass away, the buy sell deed can provide clarity that your estate or related entity receives market value for your interest in the business. Your interest would be bought by the continuing business partner who can proceed knowing there will be no disruption as you have been bought out.

It also gives your estate or related entity certainty that your business partner won’t move clients and the business to another entity, and leave your interest as being worth nothing as everything has moved on.

If there’s one thing you need to appreciate, it is that you and your business partner need to be on the same page with this, otherwise no agreement will be struck!

Overseas assets

I’m going to be frank.

Get a Will in each country that you hold assets. Full stop.

This will ensure that you discuss your estate plan with a specialist lawyer in the relevant country and that they are able to raise any issues with you that a lawyer from a different country wouldn’t know.

This is all despite it being possible to make international Wills in Australia (for only assets held in certain countries). My boss’ preference is to have one Will per country that you hold assets.

Final comments

Look, we have only covered the general concepts of estate planning.

It can be tricky for those with complex affairs.

For those with simple affairs, it is still important to get appropriate documents in place.

At the end of the day, it is intended to reduce the red tape when you pass away, for the benefit of your intended beneficiaries.

I know we have covered a lot already, but there’s one final concept I want to touch on.

That is; having power of attorney documents in place. Whilst a Will and your estate planning documents will largely consider what happens if you pass away, power of attorney documents relates to when you need someone to make decisions on your behalf.

Would you like me to explain a bit more about what a power of attorney document is?

Okay, but please do consider it. You’ll also need to consider whether you should have power of attorney documents for any related entities (where relevant).

Power of attorney documents allow you to nominate someone to make decisions on your behalf while you are still alive.

These decisions can be broken up into financial decisions and personal/health decisions. That is, you can appoint a financial attorney, or a personal/health attorney (also called a guardian in some States).

Generally, financial attorneys are able to make any financial decision you can make. This is necessary if you are unable to make decisions yourself, and someone is required to make those decisions (paying the bills, or transferring money from one bank account to another) on your behalf.

Lawyers’ preferences differ on this point. Some recommend that a financial attorney is only able to act on your behalf once you lose capacity (so your attorney cannot abuse their power). Other lawyers recommend to have this power effective immediately (having someone able to make decisions on your behalf when you can’t, for example, while you are overseas, on a cruise or ill in hospital).

Lawyers’ preferences also differ on whether you should include clauses to broaden the financial powers. Whilst there are some limitations on what your financial attorney can do (such as a limitation for your attorney to enter into conflict transactions), these limitations can be overridden in certain States. If your power of attorney document has a specific power, then your attorney can into transactions that they may not be able to enter into without specific mention. Talk to your lawyer about this and see what they recommend.

The other type of power of attorney relates to personal/health matters.

In contrast to a power of attorney for financial decisions, personal/health matters are only effective once you lose capacity

They also generally relate to minor health decisions, but the matters they cover will differ from State to State.

There are also some other health documents called advance health directives that you should consider walking through with a doctor so that there is clarity on what should happen to you if you were to be in a critical health condition.

Do note that the rules relating to powers of attorney will change from State to State so do discuss this with your lawyer, or even just google the Government’s website first for some information. We’ll provide a link about power of attorney documents below. Do consider looking up ‘advanced health directive’ or discussing it with your doctor.

Here's a link to enduring power of attorney documents based on the State you have told me where you live in:

Here is the link for Queensland:

Here is the link for New South Wales:

Here is the link for Victoria:

Here is the link for South Australia:

Here is the link for Western Australia:

Here is the link for Northern Territory:

Here is the link for Australian Capital Territory:

Here is the link for Tasmania:


So this ends all the education I can give you. I hope it has been relevant.

Feel free to provide any feedback (‘Eep back’) here including whether you found me useful, what you felt could be improved, and if there is anything more that should be included. Give me feedback and receive a free 15 minute call back in relation to any questions you may have in relation to estate planning (subject to lawyer availability).

Thank you for taking the time to read me. I will continuously be updated for more content and stories, so feel free to come back at a later date.

If you found me useful, please share me with your friends and families so that I can help guide them through what may be relevant for their estate plan.

Remember, everything I have said is free knowledge that you should know so that you can make an informed decision.

However, it is not legal advice, and you should discuss your own estate plan with an estate planning specialist.

Anyways, was there anything else I could assist you with today?

Thank you for your time today

Do It Yourself Will Kit

Alright, so you want a ‘do it yourself’ (I’ll call it DIY) Will.

Remember, I am a program, not a lawyer, and our interaction does not constitute a solicitor-client relationship, nor does it constitute legal advice in any way. If you want to have a Will prepared by a lawyer, then please engage one!

The document that I will provide you is a template for a DIY Will that you can save, updated, print and execute.

Of course, there is a lot you need to know before getting into it, so I want to just give you examples of what can go wrong if you do not get a lawyer to properly draft the document for you, nor have a lawyer assist you with signing the document.

Before I get to all of that.

Everyone should have a Will. Having a valid will ensures your estate is not hit by the following big three issues, being:

  • unnecessary legal fees incurred due to lack of clarity of your estate planning intentions;
  • your assets passing to the incorrect persons (please note that each State and Territory has its own rules in how asset are to pass if there is no Will); and
  • inappropriate people are involved with managing your estate.
  • Further, everyone should consider other aspects of their estate plan.

    If you want a refresher or information about the various issues that can arise in estate planning, please let me know.

    I'm not programmed to autoshow you information about estate planning, so please just refresh this page and select 'learn about estate planning' at the start. If you wish to continue to download the DIY Will, do continue you.

    Just to let you know, whilst you do not require a lawyer to draft a will for it to be legally binding, lawyers are able to provide value by ensure your estate planning intentions are reflected in the documents signed. They are also able to outline potential alternatives in structuring your affairs to ensure the Will suits your circumstances.

    As a lawyer isn’t drafting this Will (you are) I can’t guarantee the contents will reflect your wishes. In particular, care will need to be taken to ensure there is certainty in your Will so that your estate planning wishes can be identified and followed.

    There are many cases available arising from ‘home-made’ or ‘post-office’ Wills where the will maker (who may also be known as the testator) was not clear enough in drafting the provisions of the Will, and as such application to the Court was required to determine the deceased’s intention.

    Would you like some examples?

  • Lubke v Claridge [2016] TASSC 44 – In this case, the will maker left a will appointing “Brian Claridge Accounting” as the executor of his Will. There was confusion whether this mean Brian Claridge the accountant, or an accountant from Brian Claridge’s accounting firm. The deceased’s estate had to go to Court to be told, his intentions were to appoint Brian Claridge the accountant, provided if he is unable to act, then a practising director of Brian Claridge Accounting Pty Ltd.
  • Rainoldi v Rainoldi [2015] WASC 312 – In this case, the will maker left very vague gifts such as “I give the orchard property…equally to Sally Michael Tracey and Kayla Rainoldi”, as well as conditional gifts in relation to a business partnership conducted on the property. There were issues initially concerning whether the gift of property to Sally and Kayla was made as joint tenants or tenants in common that was eventually resolved before the Court proceeding, but additional guidance was sought in relation to what happened to the business partnership. No issue would have arisen if the will maker’s intentions were more properly conveyed.
  • O’Brien & Anor v Smith & Anor [2012] QSC 166 – In this case, the will maker left specific cash gifts to a range of persons. The rest of his estate was then to be given to the executors to be ‘administered by them as they shall see fit’. The big question was who could the executors distribute such remaining amount of the estate to. It was found that there was no clear beneficiary of such amounts and that those amounts would be administered under the relevant intestacy rules (i.e. according to the law, not the Will). This could have been avoided if it was properly drafted who would benefit.
  • Alright then.

    Some of the issues from the cases could have been avoided if a lawyer was involved with properly drafting the Will, whilst others would have needed a lawyer to take the client through a strategic estate planning meeting to understand how assets held in other entities or relationships should have passed (which I walk you through if you wish – just refresh me and click on ‘learn about estate planning’ after my introduction).

    Lawyers have special wording they can include in Wills to ensure there is clarity on how gifts of certain assets can pass. For obvious reasons I cannot give you this wording – I am not a lawyer – however, I do give you a template if your situation is simple enough. Lawyers are also able to draft gifts in a particular manner if you want them to be conditional or to pass in a special way (such as a ‘testamentary trust’ – just google this term if you want to know the benefits of it).

    So use this DIY Will with caution. Anyone whose personal circumstances are more complex than being single with having cash in bank in additional to personal items (so people who are looking to get married, are married or in a defacto relationship and those with real estate) should consider contacting a lawyer to put in place proper Wills and estate planning documents.

    Final reminder before I give you a link to the DIY Will.

    If your personal circumstances reflect any of the situations below, then please contact a lawyer. I’ve outlined what could go wrong as an example, but the traps don’t end there:

  • you own assets jointly with another person (how you own your asset jointly will affect whether that asset forms part of your will, or whether the surviving co-owner automatically receives your share);
  • you have a self-managed superannuation fund (thought has to be taken to ensure both your superannuation in the superannuation fund and control in the superannuation fund passes appropriately);
  • you own assets in structures such as companies, partnerships and trusts (assets held in these entities do not form part of your estate, and steps are required to be taken to ensure control in those entities pass accordingly);
  • you own assets overseas (that is those assets may be dealt with under the laws of the Country that are in);
  • you run a business (how will the business continue after your passing, is there a backup plan, or how will intended beneficiaries benefit from your business);
  • you have a complicated family situation (specifically, there is a risk that persons may be dissatisfied with your estate and may wish to challenge your will. These people may include ex-spouses who have not have full financial disclosure, dependants with special disabilities or persons who have been financially dependent on you).
  • Okay, as promised. A link to a DIY Will Kit is below (just click on the button confirming you acknowledge none of what I have said nor the DIY Will Kit constitutes legal advice)

    Do It Yourself Will Kit

    Let me know once you have downloaded it, and I will tell you how to complete it.

    The DIY Will considers four main issues.

    1. Who is appointed as your executor of your estate (personal responsible for administering).
    2. Who is appointed as guardian for any minor children (if applicable).
    3. Are there any specific gifts to be made.
    4. How is your estate to be distributed.

    As a general rule – try to only refer to people by their full name. This will reduce any uncertainty if other people are to benefit under your Will (i.e. what does a reference to ‘spouse’ or ‘partner’ mean in the ordinary sense?).

    The DIY Will also contain instructions on how to sign the Will to ensure it is valid. Please read them carefully.

    I’ll just walk through the relevant roles again.

    Firstly, the executor.

    The executor is the person who administers your estate in accordance with your Will and rounds up any assets held by you personally (subject to any joint tenancies), debts managed and ultimately ensuring what is left over passes to the intended beneficiaries.

    Failure to have an executor will mean that the administration of your estate will be delayed and unnecessary costs incurred for a Court to appoint an administrator for your estate.

    The DIY will template below gives you the ability to nominate an initial executor, as well as a backup executor.

    Please note that your executors are required to act jointly, and they are not able to stray from their duty (that is, they will not be able to take money out of your estate before distributing to the intended beneficiaries). They will generally instruct a lawyer to assist them with the administration of your estate, and be required to sign documents on behalf of your estate.

    To assist your executors with administering your estate, the DIY Will template also contains a memorandum for you to outline your assets and provide names of trusted advisors. The effect is that there is some guidance for your executors if you pass away (as they will have a rough idea of what assets you own (as well as where and how) and who they should contact to assist them with their role.

    If you have children, then consideration should be made in relation to who should care for them and act as their guardian should both parents pass away.

    If your Will does not nominate a guardian for any minor children surviving you, unnecessary costs will need to be incurred for a Court to nominate a legal guardian to act in the best interest for your child.

    Likewise, with the executor role, the DIY Will template gives you the ability to nominate the intended guardian if both parents are not around to care for the minor child.

    Please note that the DIY Will template contains a clause clarifying that payments can be made to the guardian to help soften any potential financial burden of caring for your minor children.

    If there are particular items that you would like to make to specific persons, you can insert them into the DIY Will below.

    Please ensure you provide enough information so that your items may be identified and able to be distributed. As mentioned before, people can go to Court over loose drafting.

    Please note that if the item is replaced at a later date, the gift under your Will may be void, so care must be taken when inserting specific gifts that you remain diligent in updating your Will.

    After the specific gifts, the DIY Will template keeps things simple by letting you distribute the rest of your estate to specific persons directly with no strings attached [#Insert movie poster].

    If multiple people are to receive your estate and one of them passes away before you do, then that person’s share is split between the other recipients.

    If all of the initial recipients pass away before you, then you can include backup recipients in a same manner.

    Other than that, the DIY Will template contains some basic powers for your executor to administer your estate, other than those given at law. Please note, however, that these powers are very basic your executors may require additional powers. Wills prepared by a lawyer will generally include all necessary clauses. Below are some particular clauses to be aware of:

  • Recipients of gifts need to survive you by 30 days.
  • If a recipient of a gift is under 18 years, then you can give the gift to the parent or guardian of that person.
  • Your Will may be changed.
  • Any void clause is to be removed from your Will without invalidating your Will.
  • A reference to children will include biological and adopted children, but not step-children.
  • Finally, there’s some general interpretation clauses confirming a singular word includes a plural and that one gender means another (if you use such terms).
  • And that’s your DIY Will.

    There are signing instructions at the end of the template. Please follow these instructions carefully. To have a valid Will, it needs to be signed in a particular manner with particular witnesses.

    One last reminder, the DIY will template is only suitable for considering one or two scenarios at a basic level. Significant thought should be put into obtaining specialist advice, to cover and consider the various other circumstances.

    You should also consider having power of attorney documentation prepared. Whilst not relevant if you pass away, this document provides persons with the power to make decisions on your behalf when you are unable to make that decision. Further, an advanced health directive should also be considered for those serious health decisions to document your intentions.

    Thanks for your time.


    Feel free to provide any feedback (‘Eep back’) here including whether you found me useful, what you felt could be improved, and if there is anything more that should be included. Give me feedback and receive a free 15 minute call back in relation to any questions you may have in relation to estate planning (subject to lawyer availability).

    Thank you for taking the time to read me. I will continuously be updated for more content and stories, so feel free to come back at a later date.

    If you found me useful, please share me with your friends and families so that I can help guide them through what may be relevant for their estate plan.

    Remember, everything I have said is free knowledge that you should know so that you can make an informed decision.

    However, it is not legal advice, and you should discuss your own estate plan with an estate planning specialist.

    Thank you!