Rising Tide Blog

What’s in a will?

Posted by Matt Hale

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As a financial planner, one of the most important things I advise my clients to do is to have a legal will in place. Unfortunately, people don’t listen to this advice as much as I would like!

Another issue is that this area is more complicated than most realise because one legal document rarely covers everything.

What is a will?

A will is a legal document that outlines how a person’s assets will be distributed upon death. In Australia, a will must meet specific legal requirements to be considered valid.

When you don’t have a Will (also known as dying intestate), it takes longer than it needs to for your loved ones to receive your assets and they may not be distributed as you would have liked. It is also a horrible administrative burden to place on someone you trust as it often involves court applications and incurs costs.

What makes a will valid?

A valid will must be in writing and signed by the person making the will (the testator) in the presence of two witnesses who also sign the document – these two people must not be beneficiaries of the assets outlined in the will. The will must identify the testator’s assets and how they will be distributed among their beneficiaries.

A valid will in Australia can cover many assets, including property, shares, bank accounts and personal items.

What about superannuation?

It’s very important to note that a person’s will does not cover superannuation and life insurance policies.

This is where binding and non-binding beneficiary nominations come into play. 

binding nomination is a written direction from a person to their superannuation fund or life insurance provider, specifying who they wish to receive their benefits upon death. This means that the trustee (super fund) or insurer must follow the directions in the binding nomination.

On the other hand, a non-binding nomination is merely an expression of a person’s wishes and is not legally binding. The trustee (super fund) or insurer can decide who should receive the benefits.

Regular reviews

Reviewing and updating your beneficiary nominations regularly is essential to ensure they reflect your current wishes. Failure to keep these up to date could result in your benefits being paid to someone you no longer wish to receive them.

In summary, a legal will in Australia covers a person’s assets and specifies how they are to be distributed among their beneficiaries. However, superannuation and life insurance policies may require a separate binding nomination to ensure the benefits are paid to the intended recipient. 

As always, it’s essential to seek professional advice from a financial planner or solicitor to ensure your estate planning is appropriate for your individual circumstances.

Still got questions? Contact the Rising Tide team today and we’ll be happy to help.