My Assets Go To My Husband On My Death, don’t they?
There is a common misconception that if you are married you do not need a Will because your assets will pass to your spouse. Unfortunately, this is not the case for all assets and depends on what assets you have and how the assets are owned.
If you own a house or a unit or land in your own name or jointly with another person as tenants in common (rather than joint tenants) then those assets form part of your Estate and are dealt with by your Will. If you own assets as joint tenants then generally it passes to the surviving owner.
If you have bank accounts, shares, motor vehicles or any other assets which are in your sole name (rather than joint name) then the proceeds of those assets will form part of your Estate. If you do own jointly owned assets then they generally pass to the surviving owner.
Superannuation is dealt with entirely different and depends on whether you have nominated a beneficiary and the type of nomination you have made. If there is no nomination and/or the nomination was “non-binding”, then the superannuation trustee has the discretion as to whom to pay the superannuation death benefit (either one or more and in whatever proportion they determine between a spouse, children and/or dependents).
We have recently seen several instances a deceased person has not made a superannuation nomination and died without a Will. The superannuation trustee decided to pay the superannuation death benefit to the estate (rather than direct to the surviving spouse) as their trustee did not allow them discretion to pay it otherwise. As the funds were paid to the estate and because the deceased person died without a Will, their estate including the superannuation benefit was distributed in accordance with the intestacy rules. This meant that the surviving spouse only received a portion of the assets including the superannuation benefit.
If someone dies without a Will, their estate is distributed in accordance with the intestacy rules. The rules can be quite complex depending on whether the deceased person had a spouse and/or children however of particular note is that if there are BOTH a surviving spouse AND children, the surviving spouse does NOT receive the whole estate. The estate is apportioned between the spouse and children.
When there are minor children, their portion needs to be set up in a trust fund and is taxed at 46.5% on any income earned, which is the highest tax margin.
Generally, when a spouse passes away, the surviving spouse will require substantial funds to pay off the mortgage and to set aside to generate some income to replace the deceased spouse’s income lost. In a situation where there is no Will and no binding nomination, it places substantial financial strain on a surviving spouse.
Should you wish to put a Will into place, we recommend that you contact our Estates team.
If you have minor beneficiaries and wish to look into setting up a trust whereby you can minimise taxation for a surviving spouse and minor children, we recommend that you contact our Estates team at firstname.lastname@example.org or call 1300 HATZIS (1300 428 947) .