Many people believe that by making a Will they have done all that is required to effectively divvy up the entirety of their assets to their intended loved ones when they die.
What most don’t realise however is that part of a person’s estate may not be distributed in accordance with their Will and, in some cases, this could be a significant share of what is left behind.
Assets or bank accounts held by two or more people in joint names will be left to the survivor of them, therefore those assets or bank account funds will not be distributed in accordance with the deceased’s Will, but rather will be ‘taken over’ by the surviving joint owner(s).
Superannuation or Life Insurance also falls outside of the jurisdiction of a Will.
Superannuation Funds and Life Insurance policies usually contain a nomination mechanism within the fund or policy itself whereby the fund or policy member nominates his or her beneficiaries by completing a Binding Death Nomination form. The effect of this is that any pay out from the fund or policy upon the member’s death will be distributed in accordance with the Binding Death Nomination, not the person’s Will.
It is also important to note that some Binding Death Nominations are only valid for a limited period of time such as 1 or 3 years which means that the member of the fund or policy must update their nominated beneficiaries regularly to ensure their intentions are noted. Some funds do not allow their members to nominate beneficiaries at all, therefore it is important to know how the particular fund deals with the distribution of funds in this instance. This was the scenario in a recent case, the details of which can be found here: http://www.goldcoastbulletin.com.au/business/deceased-soldiers-family-devastated-after-tribunal-awards-his-daughters-less-than-onequarter-of-his-estate/news-story/b5a10d85a93c3e9c7a31f32dddaf96a9
In the event that a Binding Death Nomination has lapsed or no beneficiary is nominated at the time of a member’s death, the decision as to who to distribute the funds to is left to the Superannuation or Life Insurance companies, which often is not in accordance with the deceased’s wishes.
If you are concerned about how your assets or estate will be distributed upon your death, or want further information regarding making a Will, contact one of our experienced Will and Estate Lawyers at your Gold Coast Lawyers, McLaughlins Lawyers.
Director: Ian Kennedy