Estate Planning in Australia

A Guide to Securing Your Legacy

Introduction

Australia is a country known for its beautiful landscapes, vibrant cities, and a unique blend of cultures. Its legal system reflects this diversity, with a well-established framework for estate planning. Understanding how to protect your legacy in Australia is crucial to ensure that your loved ones are cared for and your assets are distributed according to your wishes.

In Australia, effective estate planning involves navigating various laws and procedures, and having a secure mechanism for distributing assets. The Wills App offers secure storage and automated distribution, making the process simpler for Australian residents.

Overview of Estate Planning in Australia

Estate planning in Australia involves creating documents that outline how your assets will be distributed after your death, including appointing guardians for minor children, managing tax implications, and ensuring that your superannuation (retirement savings) is handled properly.

Inheritance Laws

Australia does not have inheritance or estate taxes, but certain tax obligations may still arise for beneficiaries. For example, if a beneficiary inherits an asset and later sells it, they may be liable for Capital Gains Tax (CGT), calculated based on the difference between the asset’s value at the time of inheritance and its selling price (Australian Tax Office). In addition, income generated from inherited assets, like rental income or dividends, is also subject to taxation.

The Succession Act in each Australian state provides the legislative basis for how estates are distributed if someone dies without a will. In the absence of a will (intestacy), a predetermined formula applies to distribute assets among surviving relatives (NSW Government – Succession Act).

Standard Estate Planning Documents

Some of the most common estate planning documents in Australia include:

• Will: A legal document outlining how your assets will be distributed after death.
• Power of Attorney: Grants someone the authority to make financial and legal decisions on your behalf if you are unable to do so.
• Advance Health Directive: Specifies your preferences for medical treatment in situations where you cannot communicate your wishes.
• Testamentary Trust: Established by your will, this type of trust provides a way to control how assets are managed for beneficiaries after your death.

Creating a Will or Equivalent Estate Plan in Australia

Required Documentation

To create a valid will in Australia, you will need:

• A written document that clearly outlines your wishes.
• Signatures from yourself and two witnesses who are not beneficiaries of the will.

Legal Requirements

• The will must be in writing, signed by the person creating the will (the testator), and witnessed by two adults who do not benefit from the will (Legal Services Commission of South Australia).
• The testator must be of sound mind and over the age of 18.

Steps to Drafting a Will

1. List Your Assets: Include all properties, investments, bank accounts, and personal items.
2. Identify Beneficiaries: Decide who will receive your assets.
3. Appoint an Executor: Name someone you trust to manage your estate.
4. Include Guardianship for Minor Children: Appoint a legal guardian for any children under 18.
5. Sign and Witness the Will: Sign the will in the presence of two witnesses who are not beneficiaries.
6. Store Your Will Safely: Register your will or store it securely using the Wills App.

The Wills App can help securely store your documents and ensure they are accessible when needed, protecting your wishes against being lost or contested.

Navigating Local Challenges in Estate Planning

Cultural and Legal Challenges

Australia is home to people from diverse cultural backgrounds, each with unique traditions around inheritance and estate planning. These cultural norms can sometimes clash with Australian legal requirements, which must be adhered to in order for a will to be valid.

Intestacy and Disputes

If an individual dies without a will, intestacy laws apply, which often leads to outcomes that may not reflect the deceased’s wishes. Additionally, Family Provision Claims can be made by individuals who feel they have not been adequately provided for under a will, which can result in costly legal disputes (NSW Government – Family Provision). The Wills App helps by enabling users to document their intentions clearly, reducing the likelihood of disputes.

Unique Aspects of Estate Planning in Australia

Superannuation

Superannuation is a major part of most Australians’ wealth. It typically does not form part of a person’s estate unless explicitly directed through a binding death nomination to do so. Otherwise, the superannuation fund trustee decides how the benefits are distributed, usually to dependents or nominated beneficiaries (Australian Super).

Pets and Estate Planning

Pets are treated as property under Australian law, and their care can be stipulated in your will. You may allocate funds for their ongoing care and appoint a person who will be responsible for them.

Guardianship of Minors

In Australia, guardianship allows a designated individual to care for your minor children should you pass away. This can be specified in your will, ensuring that your children are cared for by someone you trust (Victoria Legal Aid).

Using the Wills App to Secure Your Legacy

The Wills App offers innovative solutions for Australians looking to manage their estate plans securely.

Features of the Wills App

• Secure Storage: The app allows for secure storage of wills, property deeds, and other critical documents.
• Automated Distribution: The app enables users to set up automated distribution of documents and messages based on inactivity triggers. If the user does not check in with the app over a set period, the distribution process is initiated.

Setting Up Automated Distributions
The Wills App allows users to create a schedule for sending messages, videos, or other items to loved ones. This feature ensures that memories and important documents are delivered at the right time, providing peace of mind for those planning their estates.

Ethical Will and Memory Preservation

An ethical will is a non-legally binding document that allows individuals to pass on personal values, memories, and life lessons to their families. The Wills App offers an ideal platform for creating and storing these ethical wills, ensuring that your voice continues to guide and inspire even after you’re gone.

Use of the Wills App for Ethical Wills

• Record video or audio messages.
• Write letters to be delivered at specific times or milestones.
• Create a digital legacy that captures your values, beliefs, and stories.

Key Estate Planning Tips for Australia

• Review Beneficiary Nominations: Especially for superannuation and life insurance policies, make sure that your beneficiary details are up-to-date.
• Consult Legal Professionals: Australian laws can be complex, particularly for tax and superannuation matters. Legal advice is crucial for a comprehensive estate plan.
• Store Your Will Securely: Use a secure platform like the Wills App to ensure that your will is easily accessible and can be executed without delays.

Summary

Estate planning in Australia requires careful consideration of local laws, cultural influences, and unique aspects like superannuation. Using a secure platform like the Wills App can simplify the process, ensuring that your legacy is not only protected but also effectively managed. Start planning today to safeguard your assets and ensure that your wishes are respected.

Frequently Asked Questions (FAQs)

1. Do I need a lawyer to make a will in Australia?

• While it is not mandatory, consulting a lawyer ensures that your will complies with Australian law and can help avoid future disputes.

1. What happens if I die without a will in Australia?

• If you die without a will, your estate will be distributed according to intestacy laws, which may not align with your personal wishes (NSW Government – Intestacy).

1. Is superannuation part of my estate?

• Superannuation typically does not form part of your estate unless directed through a binding death nomination.

1. What is a Family Provision Claim?

• A Family Provision Claim is made by someone who believes they have not been adequately provided for under a will. This can lead to a court-ordered redistribution of assets (NSW Government – Family Provision).

1. How do I appoint a guardian for my children in Australia?

• You can appoint a guardian for your minor children in your will. This ensures that your children will be cared for by someone you trust (Victoria Legal Aid).

1. Are pets considered part of my estate?

• Yes, pets are considered property and can be included in your will. You can allocate funds and assign a caregiver for them.

1. What happens if a beneficiary dies before me?

• If a beneficiary predeceases you, their share of your estate typically forms part of the residuary estate unless otherwise specified in your will.

1. How is Capital Gains Tax applied to inherited assets?

• Capital Gains Tax is applied if the beneficiary decides to sell the inherited asset. It is calculated based on the asset’s value at the time of inheritance (Australian Tax Office).

1. Can I change my will after it is created?

• Yes, you can change your will at any time, as long as you are of sound mind. It is advisable to review your will every few years or after major life events.

1. Do I need to register my will in Australia?

• It is not mandatory to register a will in Australia, but doing so with a solicitor or storing it securely with a service like the Wills App can help ensure it is found and executed properly.

1. How can I store my will securely?

• You can store your will in a safe place at home, with a solicitor, or use a secure digital service like the Wills App to store and manage your documents.

1. Is there a probate process in Australia?

• Yes, probate is the legal process of validating a will and ensuring the executor can distribute the assets accordingly. Probate is typically granted by the Supreme Court of the relevant state or territory.

1. How do I ensure my superannuation goes to the right person?

• Make sure to complete a binding death benefit nomination with your superannuation provider to direct where your super should go upon your death (Australian Super).

1. Can I write my own will in Australia?

• Yes, you can write your own will; however, it must meet all legal requirements to be valid. It is advisable to seek legal advice to avoid potential issues.

1. What should I do if I want to exclude someone from my will?

• You can explicitly state your intention to exclude someone from your will, but be aware that this could lead to a Family Provision Claim if the person believes they were unfairly excluded.

Disclaimer

Have more questions? Explore additional topics in our Learning Center or connect with our customer support team through our Contact page. Wills.com provides easy-to-use legal forms and resources for estate planning. Please note that we are not a law firm and do not offer legal advice.