What is a complex Will?

Yarra Ranges Lawyers

What is a complex Will?

We’ve talked about what a Will is, why you should make a Will, and what makes a Will valid in our very first of our #whatis series, ‘What is a Will?’

So what makes a basic Will become a complex Will? This depends on your individual circumstances and what needs to go into your Will to make it work for you. Some things which can make a Will complex are:

  • Testamentary Trust Wills;
  • Family companies;
  • Family trusts;
  • Self-managed superannuation funds (SMSF); and
  • Life interests/life estates.

What is a Testamentary Trust Will?

A testamentary trust Will is a complex Will which sets up a trust on the death of the Willmaker. This gives the person making the Will much more control over what happens with their estate than they would have with a basic Will.

Testamentary trust Wills are usually used when there are significant assets in the estate, or where there are concerns about the beneficiaries of the estate receiving large sums of money all at once.

With a testamentary trust Will, you can set up more rules on how and when your estate is distributed. This can be useful for providing tax advantages to beneficiaries and can provide some level of asset protection (such as from family provision claims, insolvency, breakdown of marriage, and irresponsible beneficiaries).

What if I have a company, trust, or SMSF?

If you are a director of a company, have a family trust, and/or have a self-managed superannuation fund (SMSF), then your Will may need some additional clauses to make sure everything is covered in relation to those entities.

It is also a good idea for your lawyer to review any company constitution documents,  shareholder agreements, and trust deeds for each of these entities. This way, your lawyer can make sure that your Will is drafted in a way that is consistent with these documents. Otherwise, you may think that you have dealt with something in your Will, but it may actually be dealt with in those documents, for example your trust deed and to change it you would need to amend the trust deed.

Your Will may need to deal with gifting of shares and appointing an appointor and alternative appointor of the trust.

What is a life interest/life estate?

A life interest or a life estate is a way of giving someone the use of property for their life (or for some other term such as until they remarry), while reserving the property for other beneficiaries once the life interest has expired.

For example, if a person is married but has children from a previous relationship, they might want to make sure that their spouse has somewhere to live if they die, but they might also want to make sure their children receive their inheritance ultimately. One way to deal with this issue is to provide the spouse with a life interest or a life estate over the home so they can live there for the rest of their life. When the spouse dies, that home then goes to the children.

This is a great way to make sure that everybody is taken care of and nobody is left out.

What else do I need to think about?

There are other important things to consider when making a complex Will, like financial advice. Often with complex Wills, there are other entities or structures involved, such as companies, self-managed superannuation funds, or family trusts.

Most lawyers aren’t qualified to give financial advice or advise on taxation matters so you should also seek advice from an accountant and/or a financial advisor when making your Will. Your lawyer and your accountant and/or financial advisor can then work together to make sure that your Will is structured in the best way to deal with taxation matters (CGT, Stamp duty, Land tax, income tax, etc) and that the beneficiaries of your estate end up in the best position possible when you pass away.

It is recommended that anyone making a new Will gets financial advice before finalising their Will, but it is especially important when there are more complex circumstances involved.

So, what now?

Contact us today to book an appointment to discuss your Will.

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