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When is a gift not a gift?

Succession Law News | August 2015

Clients often ask us to make provision in their Wills for specific people to inherit specific gifts including a particular piece of jewellery, or piece of art or a property. In some cases, particularly in the case of an heirloom, it is appropriate to leave that item to a specific person.

However it is often the case that there is a real probability that the gift may not exist at the time of death, and if so, then that gift “adeems” or is gone and the intended beneficiary misses out on what may be a substantial gift from the Willmaker.

This is why it is important to ensure that you seek the advice of an experienced and qualified lawyer in preparing a Will. It may be the case that the intended gift may have changed character, for example shares in a particular company may have changed character [class] or quantity or the name of the company has changed. A property may have been subdivided and changed its description. Sometimes this can invalidate a gift, but at other times, a closer examination of the circumstances surrounding the intention of the Willmaker may save the gift or part of it. When considering the gifts in a Will it may assist to leave gifts which are more general in nature and can adapt to the changes in one’s estate.

Superannuation

Other matters to be aware of when preparing a Will include entitlements to superannuation. Ordinarily superannuation is not considered to be part of one’s deceased estate and the trustee of the super fund will have the discretion to allocate the proceeds of the fund. Of course the beneficiary of the super fund must provide the trustee with a signed binding death nomination and the trustee must acknowledge receipt of that document in writing to the beneficiary of the super fund. There are some circumstances where the deceased’s estate may be the beneficiary of the super fund and there are attractive incentives from a tax perspective in doing this. We would always advise that the advice from a tax accountant be part of your estate planning process.

Changes in family structure

Blended families and second and subsequent long term relationships form particular challenges to Willmakers and we strongly advise that any adult in this situation take particular care to identify their pre-relationship assets and liabilities and their children to whom they may wish to leave those pre-relationship assets, as distinct from post relationship assets which may be more appropriately left to the new spouse or partner.

An experienced lawyer can help you leave behind an effective document

It is critical in these situations to provide honest and detailed instructions to your lawyer so the lawyer can prepare a Will which accurately reflects your intentions. There are a number of factors which are activated in these circumstances and we can discuss these with you to minimise the risk of your deceased estate being directed to the wrong beneficiaries.

Careful estate planning and effective communication can often assist with trouble-free succession of family assets.  Forum Law Solicitors in Leichhardt in Sydney's inner west can provide advice on estate matters, including wills, powers of attorney, appointment of guardian and family provision claims, where you wish to either raise or defend a claim.  We can also advise you on the possibility of a claim being raised in respect of your Will, and advise you on how to minimise the success of any claim to dispute the terms of your Will.
We have clients from many locations within Australia and outside Australia. Call Annette or Jackson on +61 2 9560 3388 to discuss your concerns.

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