Estate planning is about more than transferring financial assets left behind. From supporting family members to charity causes, reducing stress and setting out a legacy- there are many ways a Will can leave an impact even after you're gone.
One of the key ways an estate plan does this is through the beneficiaries it supports. Choosing who you want these people to be is a daunting, yet important task- allowing you to make a difference with your Will and ease the stress for family in future.
Whilst you are free to make changes, choosing your beneficiaries right starts with getting informed. So read on to understand exactly what a beneficiary is, what they’re entitled to and our top tips for choosing.
Think of your’e beneficiaries as the people your’e leftover assets are going to. Whether that’s an individual or an organisation, they will receive the money, property or other assets in your deceased estate.
In identifying the beneficiaries in your Will, you control how your estate will be distributed and who gets what. Meaning that whether you're looking to support your family or make a difference to a cause, there's choices to make so that it counts.
Let's not get ahead of ourselves. Just because someones listed on your estate, doesn’t mean they take over. They have no asset rights whilst you're still alive, and you can make changes throughout your life.
Once you pass away however, the listed beneficiaries on your Will do have certain rights regarding your estate. Beneficiaries rights include:
The right to be informed about their entitlements
The right to claim their share of the estate
The right to challenge the distribution if they believe it is unfair
These are there to ensure the deceased estate is distributed fairly and transparently- ensuring that your own life's work is protected, and your wishes carried through. Having discussions with your beneficiaries and wider family ahead of time can help avoid future disputes, if any surprises crop up.
In Australia, beneficiaries can be anyone you choose, as long as they are legally eligible. Commonly, this includes spouses, children, grandchildren, siblings, and other close relatives. However it’s completely up to you on whether you also name friends, charities, or even institutions as beneficiaries.
Anyone you want your estate to support after you're gone is a worthwhile beneficiary. With this in mind, it can be worth seeking legal advice for any non-traditional beneficiaries- ensuring that your’e wishes are validly documented and legally enforceable.
Life happens, relationships change and (the best) Wills update with it. Changing your beneficiaries in life with life changes is an important step to keeping your wishes aligned with the document ultimately acted upon.
Whether changing your beneficiaries reflects the birth of a child, a divorce or a new partner- it’s important you make regular updates on who is entitled to shares of your estate. Similarly, if you experience any changes in financial circumstances- such as the purchase of a property- then it’s also recommended to reflect this in your Will.
Updating your Will is easy and affordable with Safewill- with our $15 yearly subscription, or free updates for the first year. Whilst this can be a complicated process, our team of specialist lawyers are on hand to ensure your document remains valid, and support you along the way.
With all this in mind, you may still be at a loss on who to include. And whilst there's no right or wrong, and no plan to suit all, we do have a few top tips to help you through. Let's take a look below:
Writing your Will requires an audit of all your assets. For choosing beneficiaries, we recommend you do the same. Start by evaluating your important relationships; from the people you are closest to, to those you’d like to support.
Thinking about important charities, causes and community efforts you might also like to impact can help inform the percentage (if any) you’d like to donate.
For each beneficiary, it’s also important to think about financial stability, personal circumstances and the ability to manage assets received.
It always comes down to communication, hey? With deceased estates, the story’s no different. Having these open and honest conversations can reduce the risk of disputes, smooth asset transition and improve peace for mind for you.
It’s important to set expectations, but also speak to beneficiaries about what assets they might want. For one relative, the family home might be somewhere they see themselves moving into, whilst for another it's an unwelcome asset to then sell. There might be family heirlooms, businesses or land that has more meaning to some than others. Understanding these preferences can help reduce the risk of fallout at a later date, and avoid misunderstandings altogether.
It’s important to make provisions for any dependents, if you were to die suddenly. Taking into account minor children, or individuals with disabilities who might need additional support, can inform your choice of beneficiaries. Similarly, it can help you make an informed choice on the structure of your Will- including trusts with specific provisions, or transfers to specific beneficiaries.
Much like life, your beneficiaries aren’t set in stone. It’s important to reflect life changes in your Will so that the wrong people don’t get the wrong assets if you were to die suddenly. Similarly, leaving Will changes till your health goes south could risk questions over capacity or coercion, and cause delays and upset down the line.
Estate planning is a lot. From the financial inventory to the legal lingo, the pressure to get it right and the emotional tax of facing death- things can get overwhelming.
Consulting with a professional not only ensures your Will is valid, but can help provide insight on legal requirements, tax implications and any potential disputes which your beneficiary decision will spark.
Writing your Will with Safewill offers this peace of mind that your beneficiary selection is valid, without the added burden of a legal bill which digs into their support.
Start writing your Will today, and take the first steps to protecting your loved ones in the future tomorrow. Made easy, convenient and cheaper than ever before with Safewills online platform- you really have no excuses left.