Importance of having a will and cost
- Thread starter MsAli
- Start date
A simple Will can be done at little or no cost..
Our beneficiaries inherit our portfolio without any stamp duty or CGT via a 3rd Generational Bloodline Trust Will as part of our Estate Planning.
It also protects our beneficiaries from creditors should they be subject to bankruptcy and it also protects our beneficiaries from their ex-partners getting their hands on what they inherit from us should they go through a relationship breakdown.
The assets have to be passed down in direct bloodline.
The cost to set this up is usually $2-$3k which is a drop in the ocean compared to the savings/benefits our beneficiaries will experience later on.
Without a Will an estate is divided up as per govt policy and can be easily contested.
Our beneficiaries inherit our portfolio without any stamp duty or CGT via a 3rd Generational Bloodline Trust Will as part of our Estate Planning.
It also protects our beneficiaries from creditors should they be subject to bankruptcy and it also protects our beneficiaries from their ex-partners getting their hands on what they inherit from us should they go through a relationship breakdown.
The assets have to be passed down in direct bloodline.
The cost to set this up is usually $2-$3k which is a drop in the ocean compared to the savings/benefits our beneficiaries will experience later on.
Without a Will an estate is divided up as per govt policy and can be easily contested.
Hi Ms Ali
interesting I this thread also.
Hi Rick
In a bloodline trust your kids are the beneficiaries - is it correct that they receive staged income and not a lump some? If they die then it goes to their children. Is your wife included in this bloodline trust?
For example if I die and leave estate to my husband and he remarries can my kids miss out or vice versa.
If your kids do not have any kids of their own before they pass - where does their share of the funds go?
Who controls the bloodline trust? Who takes on the decision making roles / oversees the distributions etc.
Also read (could have it wrong) if someone id sued the trust is protected because new (I don't know the names/what you call them) people are appointed to those roles. Eg your brother is in control but is sued so he steps aside and new people appointed.
When you are gone - how do you know that the person left in charge of the trust won't be overthrown? Or won't steal what is supposed to pass on (accountant who is unethical and defrauds clients etc - how do you protect against this?)
interesting I this thread also.
Hi Rick
In a bloodline trust your kids are the beneficiaries - is it correct that they receive staged income and not a lump some? If they die then it goes to their children. Is your wife included in this bloodline trust?
For example if I die and leave estate to my husband and he remarries can my kids miss out or vice versa.
If your kids do not have any kids of their own before they pass - where does their share of the funds go?
Who controls the bloodline trust? Who takes on the decision making roles / oversees the distributions etc.
Also read (could have it wrong) if someone id sued the trust is protected because new (I don't know the names/what you call them) people are appointed to those roles. Eg your brother is in control but is sued so he steps aside and new people appointed.
When you are gone - how do you know that the person left in charge of the trust won't be overthrown? Or won't steal what is supposed to pass on (accountant who is unethical and defrauds clients etc - how do you protect against this?)
If you don't have a will your assets will pass according to the intestacy rules. These vary from state to state and depend on if your domestic situation - kids, spouse (you can also have 2 spouses in NSW
).
If there is a will probate is applied for by the executor. If there is no will then anyone amongst your family can apply for administration of your estate - there may be argues about who does this.
If you just want everything to go to one person then probably a simple will is all that is needed - but consider what if this person dies before you. If you have children then you need to consider more things. If you have assets then tax may need to be conisdered - if you have overseas assets then it gets much more complex, you may need a will here and a will overseas for example and you need to be careful one doesn't revoke the other.
A simple will could cost around $500 or $100 in chinatown - better off doing a template maybe.
If you have considereable assets you should consider a testamentary discretionary trust to be incorporated into the will. Cost between $1500 to $5000 or so depending on the complexity.
Don't forget super doesn't form part of your estate and insurance proceeds probably won't either. These need to be considered separately but jointly - you may want an equilisation clause so if Child A gets the super then Child A's benefits under the will are correspondingly reduced - trying to even things out. This may allow the executor some ability to save tax and benefit the whole family.
).If there is a will probate is applied for by the executor. If there is no will then anyone amongst your family can apply for administration of your estate - there may be argues about who does this.
If you just want everything to go to one person then probably a simple will is all that is needed - but consider what if this person dies before you. If you have children then you need to consider more things. If you have assets then tax may need to be conisdered - if you have overseas assets then it gets much more complex, you may need a will here and a will overseas for example and you need to be careful one doesn't revoke the other.
A simple will could cost around $500 or $100 in chinatown - better off doing a template maybe.
If you have considereable assets you should consider a testamentary discretionary trust to be incorporated into the will. Cost between $1500 to $5000 or so depending on the complexity.
Don't forget super doesn't form part of your estate and insurance proceeds probably won't either. These need to be considered separately but jointly - you may want an equilisation clause so if Child A gets the super then Child A's benefits under the will are correspondingly reduced - trying to even things out. This may allow the executor some ability to save tax and benefit the whole family.
It will all vary depending on the terms of the trust. You can design things specific to how you would like.
Asset protection works the same as in an inter vivos discretioanry trust. No beneficiary has any vested interest in the trust so if they are bankrupted creditors won't get access to the trust. The appointors will control the trust and this may be one or more children - the role of appointor is not something that can be seized on bankruptcy. But all of this will depend on the terms of the trust. Many of the simple trusts in wills are just bare trusts and provide no protection at all. e.g. Auntry Mary hold my house in trust for baby James until he turns 25. if James goes bankrupt at 24 the house is gone.
Thanks for the detailed response, Terry. When you talk about considerable assets - how much are we talking? 1mill, 5mill, 10mill or 100mill?
Cheers,
MsAli.
That will vary with each person.
If you owned a $300,000 house and had a child would you want to leave it to them in a tax effective manner with stronger asset protection? Perhaps - but would this feeling make you want to pay the $1500 fee? to set up a will with a trust in it? Maybe or maybe not!!
Thank you Terry
What happens if (I sound like my 5 year old!)you are in the accumulation phase - and hence have a lot of debt? 80%
Do all of the properties have to be sold?
Or if some cash (buffer) and equity (which has accumulated since will made) are not sufficient to pay out mortages. Do you then need to be specific about which prop is paid out and not sold?
If super goes to a nominated beneficiary and not to your estate how does your super payout reduce debts? Do you / can you nominate the bloodline trust as your beneficiary - so then it can go to paying off the debt.
When someone dies - do you inherit their debts?
What happens if (I sound like my 5 year old!)you are in the accumulation phase - and hence have a lot of debt? 80%
Do all of the properties have to be sold?
Or if some cash (buffer) and equity (which has accumulated since will made) are not sufficient to pay out mortages. Do you then need to be specific about which prop is paid out and not sold?
If super goes to a nominated beneficiary and not to your estate how does your super payout reduce debts? Do you / can you nominate the bloodline trust as your beneficiary - so then it can go to paying off the debt.
When someone dies - do you inherit their debts?
One is more than enough to handlekids, spouse (you can also have 2 spouses in NSW
I think that is the whole point of having the bloodline trust. You are making sure that your kids get the assets. Not your husband's future wife's kids.
Hmm.... what if a parent dies with her/his children? Does it go to her/his sibling instead of the partner??
Is the SMSF member dies then their member benefits needs to be paid out as soon as practical. This may be lump sum or a pension. If there is not enough cash then property may need to be sold or there may be insurance in the fund which could be used.
Death would probably mean any loans may need to be renegotiated - both inside and outside super.
Only certain people can be a beneficiary of super death benefits. Super could be paid to the estate and from there into a trust, either the normal testamentary discretionary trust or a separate super proceeds trust. There are different tax consequences to the payment of super, so it is best to segregate it so it can go to the most tax effective members.
Debts aren't inherited. If you die the loan needs to be repaid. If you want to leave property A worth $100,0000 to person X and if it has a loan of $80,000 you need to consider the loan. If you don't mention the loan in your will then the loan will be paid for out of this property - ie it goes with the property. But this is only temporary as the bank will need to be repaid. The beneficiary will need to sell the property or qualify for the loa
Depends on the terms of the will or trust or the intestacy rules if no will.
In NSW if a person dies without a valid will and leaves no spouse and no children then their assets will go to:
the parents
If no children, no spouse and no parents then:
siblings
If no children, no spouse, no parents and no siblings, them:
Grandparents
if none then
aunts and uncles
if none then
the State!
One is more than enough to handle
I think that is the whole point of having the bloodline trust. You are making sure that your kids get the assets. Not your husband's future wife's kids.
Hmm.... what if a parent dies with her/his children? Does it go to her/his sibling instead of the partner??
So you have to choose your husband or your kids? Or your estate goes to bloodline trust and your spouse is also a beneficiary as well as the kids.
props that are held 50/50 - they automatically go to him.
Properties held as Joint Tenants don't pass via a will. it is automatic to the survivor.
If there is a trust then the terms of the trust govern who gets access to income and or capital. With a bloodline trust the beneficiaries may be restricted to those beneficiaries issuing from your loins - depending on the terms 'bloodline' is just a name, it is the terms of the trust that matter.
I recall a neighbour's brother died intestate, as he was born OS, they had to advertise high and low to flush out any possibility of other children born before he migrated. Chewed up alot of $$$ (his kids were not happy).
I recall a file (when I worked in a bank) that was kept open for years when a couple were killed in a car accident. It seemed that until it was decided by a court (coroner?) who died first, nothing was able to be paid out or finalised. The wills must have been quite different depending on who died first.
I remember the file being open for many years (from memory it was more than five years and could have been longer) and I don't know why a decision had not been made. But now I've been through the legal system I understand nothing happens quickly.
I remember the file being open for many years (from memory it was more than five years and could have been longer) and I don't know why a decision had not been made. But now I've been through the legal system I understand nothing happens quickly.
Order of death needs to be determined because
Say husband leaves every thing to wife, and then the RSPCA if she predeceases him.
Wife leaves everything to husbabd, and then to Donald trump if he predeceases her.
Q: Who is going to get the money if they both die together and it cannot be determined who died first? RSPCA or Trump?
Say husband leaves every thing to wife, and then the RSPCA if she predeceases him.
Wife leaves everything to husbabd, and then to Donald trump if he predeceases her.
Q: Who is going to get the money if they both die together and it cannot be determined who died first? RSPCA or Trump?
Isn't it normal/common for a will to include that the beneficiary has to survive the maker of the will by 30 days (or other time period)? e.g. - I leave everything to my wife if she survives me by 30 days, if not it goes to Donald trump
Donald Trumps dog?
