General – Redmond Hale Simpson Solicitors and Barristers in Kogarah

Gifting Superannuation Through A Will

Superannuation is often the biggest asset a person will have in their lifetime and can be the largest part of a person’s Estate when they pass.

However, gifting your superannuation to family or friends after your death is more complicated than it first appears, as it does not always form part of your Estate.

Depending on your personal circumstances, it is important to understand the most effective way to leave a gift from your superannuation for your loved ones.

I HAVE A BINDING DEATH NOMINATION THROUGH MY SUPERFUND – HOW DOES THIS WORK?

A binding death nomination is a formal document lodged with your superannuation fund to specify who can receive a payment directly from the fund after your death.

If you have dependents, including a spouse, child or other family member, a binding death nomination may be the best way to provide for them after your death. Superannuation funds are only able to directly pass funds to dependent persons listed under law, including your spouse, minor child or dependent adult child.

A binding death nomination generally expires after a set period of two years and needs to be regularly updated. Some funds offer non-lapsing nominations on request.

I WANT TO LEAVE MY SUPERANNUATION TO SOMEONE SPECIFIC

If you have no dependents, or you wish to leave your superannuation to someone other than a dependent for any reason, a binding death nomination is unlikely to be the most effective way to leave a gift, as your superfund may not legally be allowed to pay this person.

Examples of gifts to non-dependent beneficiaries:

Gifts to non-dependent adult children
Gifts to grandchildren, nieces and nephews or cousins
Gifts to friends
Gifts to charitable organisations

In these circumstances, your binding death nomination should be to your “personal legal representative,” which gifts the balance to your Estate allows your Executor to handle your superannuation as part of your Estate.

You can then specify in your Will how you would like your superannuation to be distributed.

WHAT HAPPENS IF I DON’T MAKE A BINDING DEATH NOMINATION

If a person dies without making a nomination through their superfund, it is up to the trustee of the superfund to make payment to dependents or to the Estate of the person.

This can result in complicated financial implicated for recipients who are on Income Support, receiving Aged Care payments, or for minors.

It can also lead to your superannuation being granted to an unintentional recipient.

Even if provision has been made in your Will to gift your superannuation to a particular person, this may not be enforceable without a nomination.

WHAT ARE THE TAX IMPLICATIONS OF GIFTING THROUGH MY WILL INSTEAD OF THROUGH MY SUPERFUND

The financial implications of gifting funds through a Will instead of a superfund can vary. We recommend seeking financial advice to understand any complexities of your individual circumstances.

WHEN SHOULD I UPDATE MY WILL TO GIFT MY SUPERANNUATION

If you have changes in your personal circumstances, such as having children, entering a relationship, separating from a partner or significant changes to your personal assets, then you may wish to amend your Will and your Binding Death Nomination arrangements.

For advice on your Will and gifting superannuation, get in touch with us today.

I Want To Donate My Body To Science – What Legal Steps Do I Have To Take?

Some people wish to contribute to science and medical research by bequeathing their body to a research institution. This is an important contribution to universities and organisations across the state, however, if not done properly, your gift may not be legally possible.

DONATING THROUGH A WILL?

In New South Wales, it is not possible to consent to donate your body to science through your Will alone, and research organisations will not be able to accept donations from your executor.

WHAT SHOULD I DO INSTEAD?

To make an effective donation of your body, there are important steps to take:

Identify which organisation you’d like to receive your donation

There are a number of organisations which may benefit from your donation, including universities, the Organ Donor Register and the Brain Bank. A list of these organisations is available at the bottom of this page.

Each organisation has its own list of criteria which may make you ineligible, including certain illnesses or risk factors. Consider carefully whether your chosen organisation will be able to accept your contribution

Register with the organisation

Each organisation has a registration process for donors, including medical disclosures. Get in touch with them directly to commence the process

Prepare your Will and nominate your executor

Make sure the person responsible for managing your affairs when you pass is aware of your registration with the organisation and has a copy of relevant paperwork. When you pass, there is a very limited window of time for your donation to be accepted by the organisation and transported to their facilities for use. Your executor can take steps as soon as you pass to contact the organisation and increase the chances of a successful donation. Your executor should also be aware of your alternative preferences if your body cannot be accepted.

HOW LONG CAN MY REMAINS BE STORED

Under NSW law, human specimens can be stored for a maximum of four years, with a possible extension for an additional four years.

WHAT HAPPENS ONCE MY REMAINS CAN NO LONGER BE USED?

While each organisation will have different processes, many organisations will arrange for cremation at the end of the retention period, and will cover the costs of the cremation. Your family will then be able to receive your ashes.

WHAT HAPPENS IF MY REMAINS CAN’T BE ACCEPTED?

There are many reasons why an organisation may be unable to accept your donation, including illnesses or medical reasons, if you pass outside of their donation area or if there is limited capacity to accept your donation. If this happens, your executor or family will be responsible for making decisions about if your body should be buried, cremated or otherwise managed. It is important you communicate your alternate wishes with your loved ones.

ORGANISATIONS ACCEPTING DONATIONS

University of New South Wales School of Biomedical Sciences – Bequeathal Program: https://www.unsw.edu.au/medicine-health/our-schools/biomedical-sciences/partner-with-us/bequeathal-program

University of Technology, Sydney – Body Donation Program: https://www.uts.edu.au/about/faculty-science/surgical-and-anatomical-science-facility/body-donation-program

University of Sydney – Body Donor Program: https://www.sydney.edu.au/medicine-health/industry-and-community/support-us/body-donations.html

Macquarie University – Body Donations: https://www.mq.edu.au/faculty-of-medicine-health-and-human-sciences/engage-with-us/body-donations

Western Sydney University – Body Donor Program: https://www.westernsydney.edu.au/body-donor-program

Australian Organ Donor Register: https://www.donatelife.gov.au/register-donor-today

MS Australia Brain Bank: https://msbrainbank.org.au/

Lions Eye Bank: https://lionssavesightfoundation.org.au/lions-nsw-eye-bank (Please note, donations to the Eye Bank can be facilitated through the Australian Organ Donor Register)

Please note this list is not exhaustive.

Importance of having a Will

Planning for what happens to your estate after you die is an important step to ensure that your wishes are clear to your family, and to minimise stress and confusion for those left behind. A well-drafted Will is a critical part of this plan.

A Will is a formal written document which sets out how you want your property (“estate”) to be distributed when you die. Whilst a Will can appear to be a simple document, there are many formalities which need to be observed to ensure a Will accurately reflects your wishes. This includes ensuring your Will is properly signed and witnessed according to law.

Some important considerations include:

Your choice of Executor to seek Probate (the person who will be responsible for enforcing your wishes)
How your debts will be settled
How your funeral and testamentary costs will be paid
Who receives your property, including superannuation
Gifts to family, friends and organisations which are important to you
Tax implications of your gifts

Creating a valid Will can ensure instructions are in place for care and guardianship of minors and other dependants and is a way to leave gifts to children for when they grow up.

What happens if I don’t have a Will?

If you die without a Will (or ‘die intestate’), your possessions and assets will be divided as per the Succession Act 2006 (NSW). This Act passes your estate automatically to your spouse or relatives in a prescribed order which may differ from your wishes.

Dying without a Will means that gifts cannot be left to friends.

Wills for Marriage, Partners and Divorce

Having a clear and properly executed Will is important whenever there is a significant change in your relationship. This includes when you are married, or when a marriage comes to an end, and if you are cohabitating with a partner.

If you have a blended family, it is important to ensure that your Will reflects care arrangements for any dependents in your household.

Emergency Wills

If you or a family member believe that there is an urgent need for a Will to be drawn due to illness or injury, please get in touch with us before it is too late to do so. Please call our office and let us know the emergency and we will discuss with you how we can help. Our solicitors often visit hospitals and nursing homes by arrangement.

Get started on your Will today

With over eight decades of experience in Estate planning, the team at Redmond Hale Simpson is ready to answer any questions you have about making a Will. We offer fixed price Wills packages.

Understanding Property Ownership Types

There are mainly two types of property ownership: Joint Tenancy and Tenancy in Common, with each having significant distinctions. Upon purchasing a property, its ownership type is specified on the transfer document. Joint Tenancy is noted for the right of survivorship; this means that if one owner dies, their share directly transfers to the remaining owner(s), overriding wills or separation agreements.

Conversely, Tenancy in Common permits the distribution of each owner’s property share according to their will, without an automatic right of survivorship.

Recognising the differences in ownership structures is crucial for several reasons, including considerations for taxes, estate planning, and safeguarding assets. Often, purchasers of property might not fully grasp the implications of each ownership structure, leading to a desire for changes that come with substantial costs. Relationship alterations frequently necessitate ownership adjustments.

Changing Ownership

It is possible to change ownership types, but such changes can incur tax implications. Specifically, altering property ownership often triggers Stamp Duty expenses in New South Wales (NSW), calculated on the property’s market value at transfer time. For example, a switch from Joint Tenancy to a single owner for a property valued at $1.5 million could lead to an approximate Stamp Duty of $28,000, barring exemptions.

Estate Planning

To align estate management with personal wishes posthumously, individuals might change their property’s ownership type. Transitioning from joint tenancy to tenancy in common allows an owner to dictate their property share’s distribution through their will, offering more control over their estate.

Relationship Changes

Changes in personal relationships, such as marriage or entering a de facto partnership, might prompt the addition of a spouse or partner to the property title, shifting the ownership to either joint tenancy or tenancy in common. Similarly, separation or divorce could require removing a spouse or partner from the title. In NSW, property transfers between partners, whether married, separated, or in de facto relationships, may qualify for stamp duty exemptions.

Financial Considerations

Owners might also modify their property ownership type for tax optimisation, investment strategy alignment, or asset protection. Shifting to tenants in common, for example, allows for specifying different ownership shares, possibly offering tax benefits or aligning with individual investment preferences. Strategic financial planning might necessitate such changes for enhanced tax efficiency or investment outcomes.

Other Factors

Several other considerations can influence ownership changes.

Under the NSW Succession Act, the court can include a deceased’s ‘notional estate’—property controlled or benefitted from before death—in family provision claims, potentially affecting joint tenancy properties. Additionally, severing joint tenancy following a relationship breakdown can clearly define and protect each party’s interest, often a strategic estate planning move to ensure assets are distributed as desired, circumventing the automatic transfer inherent in joint tenancy laws.

In the context of family law, in the aftermath of a relationship breakdown, it may become necessary to sever this joint tenancy to ensure that each party’s interest in the property is clearly defined and protected and may prevent improper dealing of that property. In the broader context of estate planning following a relationship breakdown, severing joint tenancy is often a strategic step to ensure that assets are distributed according to the party’s wishes. It is a preventive measure against the risk of significant assets, like the family home, bypassing the intended estate plan due to the operation of joint tenancy laws.

Process

In NSW, changing property ownership involves legal steps, including completing specific forms for the Land Registry Services and potentially dealing with Revenue NSW for stamp duty matters. Consulting legal and financial professionals is essential to navigate these changes legally and effectively.

Changing tenancy is a significant decision with profound implications for property rights and estate planning. Individuals considering this should seek legal and financial advice to understand the implications fully and ensure that their interests are protected.

Disclaimer

This information is provided for general informational purposes only and should not be considered legal advice. Property ownership and its implications can vary significantly depending on individual circumstances, legal jurisdiction, and changes in law. It is crucial to consult with a qualified legal professional to understand the specific implications of your situation. Do not rely on this information for making legal decisions. Seek personalised legal advice to ensure your decisions are informed by the most current legal standards and practices and are suitable to your situation.