Legal
Issue No. 51 - February/March 2010
Don’t trust the best Will in the world
The advantages and generous concessions that can accompany using a family discretionary trust - a Family Trust - or a self-managed superannuation fund as an investment vehicle have persuaded a significant number of people to transfer assets to, or accumulate assets in, these vehicles.
What is often overlooked is that transferring assets into a Family Trust or SMSF has a significant impact on your current Will and estate planning arrangements. Put simply, your Will cannot deal with assets you no longer own. As a result, the features that make Family Trusts and SMSFs attractive investment vehicles can also make them problematic from an estate planning perspective.
Family Trusts As a matter of law, the assets of a Family Trust will not form part of your estate on your death. Accordingly, it is not possible to gift those assets, directly,under your Will. If you own an asset in your own name, and then transfer it to a Family Trust, it is likely your Will and estate planning arrangements will no longer adequately deal with those assets.
There are various options for ensuring the assets of the Trust are dealt with in accordance with your wishes after your death. The most appropriate option will depend on factors such as your personal circumstances; your wishes; the type and value of the assets held, or likely to be held, by the Trust; and, importantly, the terms of the Trust Deed.
For example, you may choose to pass control of theFamily Trust to the person...
