Understanding Estate and NonEstate Assets in Estate Planning
When it comes to estate planning, one of the most crucial steps is understanding the difference between estate and nonestate assets. This distinction determines how your wealth will be distributed and what steps you need to take to ensure your wishes are followed.
Estate Assets
Definition: These are assets that automatically become part of your estate upon your passing. They are distributed according to the terms of your will. Examples include:
Individually owned bank accounts Term deposits Managed funds Shares or interests in private companies Property owned under a tenants in common arrangement
Key Characteristics:
Assets owned under tenants in common arrangements: These can be dealt with in your will, and your share does not automatically pass to the surviving owners. Subject to probate: The executor ensures these assets are distributed as per your will.
NonEstate Assets
Definition: These are assets that do not automatically form part of your estate and are generally managed outside the terms of your will. Examples include:
Joint tenancy assets: Properties or bank accounts owned jointly where ownership automatically transfers to the surviving owner. Family trusts: Assets held in a family trust remain within the trust and are governed by its rules. Superannuation and life insurance: These can be paid to specific beneficiaries or your estate, depending on your nominations.
Key Characteristics:
Not subject to probate: This makes them faster and simpler to distribute. Distribution may not align with your will: Unless appropriate nominations are in place.
Why This Distinction Matters
- Avoiding Disputes: Clearly define who inherits what to prevent potential conflicts.
- Maximising Tax Efficiency: Proper planning can minimise tax liabilities for your beneficiaries.
- Comprehensive Estate Planning: Ensure that all assets, both estate and nonestate, are distributed according to your wishes.
How ActOn Wealth Can Help
At ActOn Wealth, we provide expert guidance to help you categorise your assets and understand their implications for estate planning. We can:
Align your nominations for nonestate assets with your overall estate plan. Work with legal professionals to structure your estate for maximum efficiency and clarity.
Contact us today to ensure your estate planning strategy is comprehensive and aligned with your goals.
By understanding and planning for both estate and nonestate assets, you can create a clear, effective estate plan that honours your wishes and takes care of your loved ones. Let ActOn Wealth guide you through this essential process.
