1. Testamentary Trust, not a Direct Gift:
A testamentary trust is created by your Will and comes into effect after your death. Income distributed to a beneficiary under 18 is generally taxed at adult marginal rates rather than the penalty minor rates. This means the tax-free threshold applies per child and can be a tax advantage (provided the income generated from the trust assets is sufficient). It also keeps inherited assets separate from a beneficiary’s personal assets, which can help to reduce the risk of exposure in family law property settlements or insolvency circumstances, when structured appropriately.
2. Guardians for Minor Children:
Naming a guardian for your minor children in your will makes your wishes known for who you would want to take care of your children, if you and your partner couldn’t.
Without this, well meaning family members, often from both sides of the family, may put up their hand saying “they would have chosen me”. You can imagine what happens next.
3. Deliberate Aecision About Superannuation:
Super is usually the second-largest asset people own (after the family home) and the one most often left to chance. Your super does not automatically form part of your Estate. Depending on your personal circumstances, you may want to ensure it stays that way or you may want it specifically included and referenced in your Will. A valid binding death benefit nomination directs where the trustee is to pay member entitlements upon death (and whether it will form part of your Estate or pass to dependants outside of your Estate). Many lapse after three years and requirements vary between funds and Self-Managed Superannuation Funds.
4. The Right Executor:
Your executor will be responsible for calling in the assets, paying liabilities, managing estate disputes, lodging tax returns and administering the estate. It can be stressful, take a long time and is often an under appreciated role. If you select the wrong person, there may be additional delays, conflict and costs. Make sure the executor you name is willing to act, capable of acting and that they know where your Will is.
