Complex Estates: When Your Will Needs a Broader Plan

A simple Will can work well when your family arrangements and assets are straightforward. But as you approach retirement, your financial life may include much more than a home, bank accounts and personal belongings.

A second marriage, adult children from different relationships, a family business, a trust, an SMSF or overseas assets can all create decisions that a Will may not fully address on its own.

In these situations, estate planning is about making sure your legal documents, ownership structures and beneficiary arrangements work together towards the outcome you intend.

What can make an estate more complex?

Complexity is not determined only by how much you own. It can come from who you want to provide for, how your assets are owned and who controls them.

You may need more tailored estate-planning advice if you:

• have a blended family or children from a previous relationship.

• want to support a current partner while preserving an inheritance for your children.

• own or control a company, family business or farm.

• hold assets through a family or discretionary trust.

• are a member or trustee of an SMSF.

• have assets or beneficiaries overseas.

• want to provide differently for a vulnerable beneficiary.

• are concerned that your Will may be challenged.

A Will generally deals with assets that form part of your estate. It does not automatically control every part of your financial position.

Where can the gaps appear?

Superannuation is a common example.

Your super does not automatically pass according to your Will. How a death benefit is paid can depend on any valid beneficiary nomination, the super fund's rules and superannuation law.

For an SMSF, there can be an additional issue: control. The fund's trust deed, trustee structure and arrangements for what happens when a member dies can affect who is able to make decisions about the fund and how the death benefit is dealt with.

Family trusts can create another layer.

Assets held by a family or discretionary trust are generally governed by the trust deed rather than simply passing under your personal Will. Estate planning may therefore need to consider who will control the trust after your death and what powers or interests you personally hold.

Changes in who acts as trustee, director of a corporate trustee or another key controlling role can have a major influence on what happens next.

Businesses can also require separate succession planning.

The person who inherits shares in a business may not necessarily be the person best placed to run it. If other family members, business partners or employees rely on the business, it may be important to decide in advance who should take control and how ownership should transition.

More than a Will

For someone with more complex circumstances, an estate plan may involve a combination of:

• an updated Will.

• superannuation beneficiary nominations.

• SMSF succession arrangements.

• trust and company succession planning.

• powers of attorney.

• health or guardianship documents.

• arrangements for business ownership and control.

A testamentary trust may also be considered in some circumstances, particularly where an inheritance needs to be managed for children or vulnerable beneficiaries. It is not necessary or appropriate for everyone, and specialist legal advice is important before deciding whether one belongs in your plan.

The objective is not to create complexity for its own sake. It is to make sure that each part of your financial life works with the others.

Ask whether all the pieces point in the same direction

The key question is not whether your estate looks particularly wealthy or complicated.

It is whether your family arrangements, ownership structures, beneficiary nominations and legal documents are all likely to produce the outcome you expect.

That becomes increasingly important as retirement approaches because this is often when super balances, property, businesses and other assets are at their most significant, while family circumstances may also have become more complex.

A free Retirement Check-Up can help you review your broader financial position and identify areas, including estate planning, that may require closer attention before retirement.

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