Leaving an inheritance: I don’t want to give my child anything…. is that okay? The answer, generally, is no. However, there are many strategies which can be implemented today which can significantly limit the opportunity for your child to receive anything from you.
Clients ask us this question when they have one child who is successful, whereas the other siblings may have substantially less. Other times where this question arises is where one child has been particularly difficult or distant, and the parents have lost contact or do not wish to be leaving an inheritance to the child for their inappropriate conduct. We have also seen this question arise in circumstances where a child has children of their own which they do not support, and our clients (being the grandparents) want their estate to pass to the benefit of their grandchildren.
Setting aside the reason for this decision, there are practical solutions – albeit the solutions may not flow directly from your Will.
For example, did you realise that superannuation does not pass as an estate asset? When you die, your superannuation is not disposed of by your Will. Most people do not realise this. The Superannuation Fund Trustee decides who receives your superannuation benefits. Some commercial funds, and all self-managed funds, allow you (as the member) to “bind” the Trustee to pay the benefits in a certain manner, but this manner must still comply with the terms of the Superannuation Legislation. Generally, the superannuation must pass to a spouse, child, dependent or your estate. There are, therefore, strategies which can be implemented to circumvent your estate.
Another possible solution is the foundation of a Discretionary Trust to hold your assets. Essentially, you “gift” your assets to a Trust, and when you pass away the assets do not belong to your estate. They are disposed of within the terms of the Discretionary Trust. You can nominate your successor to manage the Trust (referred to as a Trustee and/or Appointor) – and that person (or persons) then determines how the assets are distributed.
Another option, which carries a cost which may be a disincentive to many, is to create “joint tenancy” over property with the preferred beneficiaries – which means that the property passes automatically to the survivor(s) on your passing. This is definitely not one of my preferred options, but it is an option.
There are many other possibilities, and each circumstance is different. Therefore, we welcome you to contact the office to discuss the possibilities available to you and your family to reach your estate planning objectives, including, but not limited to, withholding provision to any one or more of your family members.
We welcome you to contact our team on (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.
Submitted by: Katrina E. Brown BA JD ATIA TEP SSA
