“Doing A Will” and “Estate Planning” – what’s the difference?

I’m frequently asked “Hey, do you guys do Wills?” The answer is “yes we do – but is that really all you need?” Preparing a Will is an integral part of estate planning, but is only one part. Most people will need more than just a simple Will to effectively distribute their assets.

1. Avoiding pitfalls

 To quote Charles Dickens – “the law is an ass” – it’s true. rules and principles that were developed in times of lords and serfs have no place in today’s society – but we frequently see judges applying outdated principles arising from ancient cases to today’s disputes.

To give you an example – a judge in Victoria recently decided a case regarding a home-made Will based on a principle from a case in Saunders v Vautier , which was decided in 1841.

My great-great-grandparents hadn’t been born in 1841!

(The outcome of that case was that, even though the Will-maker had said that a particular beneficiary was to receive her share at 25, the judge ruled that she could have it when she turned 18.)

Technology, language and society can all change over time, and the law often doesn’t keep up with these changes. Quirks and loopholes abound. A good estate planning lawyer will listen to what you want to achieve, and apply the law to help you obtain your goals.

2. Non-estate assets

Doing a Will deals with all of the assets you own. It doesn’t deal with non-estate assets.

“What’s a non-estate asset? What do you mean – how can I not own something that’s mine??”

Here are assets which are either not covered by your Will, or need special consideration beyond the scope likely to be available in a simple on-the-spot one-page Will:-

• Superannuation;
• A family trust;
• A company or an interest in a partnership;
• Property owned with someone else – who might be your spouse, or a family member, or a friend;
• Overseas assets

If you have any one or more of these, then you should consider seeing an estate planning lawyer.

3. Tax considerations

Certain assets (like superannuation) can go to certain people (like superannuation dependents) in tax-effective ways.A good estate planning lawyer will take the time to work out what you own, and what you control – and only then will ask you “OK, so who do you want to leave things to?” This ensures your intentions are being carried out in a tax-effective manner, and to ensure that you don’t inadvertently trigger a CGT event, or stamp duty, or lose a stack of superannuation in tax unless you really need to.