If you are young and single and in good health, making your Will is often not front of mind. Your priorities are stagnant wage growth, climate change and choosing a milk alternative for your daily coffee! However, even at this stage of life it is important to consider who will get your stuff when you are gone.
Here are three cautionary tales about young, single people who didn’t put the right estate planning documents in place.
Peter (21) died in a workplace accident. He didn’t own much at the time of his death, but his estate received significant damages as well as his superannuation and life insurance. Without a Will, Peter’s estate was governed by the laws of intestacy. This meant that his estate was distributed between his parents in equal shares. Peter had been brought up by his mother, was still living with her when he died and had long been estranged from his father. Arguably, he would not have wanted his father to benefit from his estate. If Peter had made a Will, he could have ensured that his estate went to his mother in its entirety.
Superannuation does not automatically pass through your Will. Without a binding nomination in place, the trustees of your super fund decide where your super goes. The death of Ashleigh Petrie has highlighted the importance of putting in place a binding nomination for your superannuation death benefits and a Will.
At the time of her death Ashleigh (23) was in a relationship with her colleague Rod (68). This relationship attracted rather a lot of salacious attention which intensified when Ashleigh was killed in a traffic accident 18 months after the relationship went public. It transpired that soon after Ashleigh’s death, Rod claimed and was paid Ashleigh’s superannuation death benefits worth $180,000. Much has been made of the fact that Ashleigh intended this money to go to her mother.
The trustee of your super fund can only pay your superannuation death benefits to your spouse (including your de facto), your children, your estate, or someone in an ‘inter-dependent’ relationship with you. Your parents do not usually fall into the last category except in certain circumstances. Apparently, Ashleigh purported to nominate her mother as her beneficiary, but that nomination was invalid under superannuation laws, so her superannuation death benefits were paid to her de facto spouse, Rod.
Right now, there is a bun fight between the respective parties over Ashleigh’s super. We’re guessing this is not what Ashleigh would have wanted. All this could have been avoided if Ashleigh had made a binding death benefit nomination to her estate and a Will gifting any superannuation paid to her estate to her mother. Alternatively, if she had wanted to benefit Rod, she could have made a binding death benefit nomination to him.
Remember, you may not own much in your own name, but if you hold life insurance in your super, you could be worth more than you think. Make a binding nomination for your super and keep it up to date.
Sarah (32) was a young, successful professional who died unexpectedly in a car accident. She had made a Will leaving everything to her father, Bill. Bill was a Centrelink Aged Pension recipient. Bill preferred that Sarah’s assets by-passed him and went to Sarah’s siblings. However, under the Centrelink deprivation provisions, Bill was still considered to own Sarah’s assets for another 5 years. Passing on his inheritance compromised his entitlements to the Aged Pension and other financial arrangements he had in place.
When choosing your beneficiaries, you need to consider whether they are the most suitable person to receive your estate.
Estate planning is for everyone. Four things to remember:
- You may be worth more dead than alive.
- The laws of intestacy may mean that your estate ends up in the ‘wrong hands’.
- If you do not make a binding nomination, the trustee of your super fund decides who gets your superannuation death benefits.
- Choose your beneficiaries carefully.
If you would like some advice about your estate planning, call Andreyev Lawyers on 1300 654 590 to speak to a great lawyer who will help you put in place an estate plan for a fixed price that is suitable for you.