Do you really know who will inherit your assets?
Written by Angela Teng
We all know that a Will is an important legal document to protect your assets. In some cases, it also means that family values, cultural heritage or beliefs are being honoured.
Anna and Kevin* are a married couple living in Sydney. When their daughter was born in 2019, Anna applied for her parents to migrate to Australia to live with them and help them look after the baby.
When the citizenship was granted, Anna's parents sold their family home in China and gave most of the money to Anna and Kevin to buy a bigger house in Australia so they could all live comfortably. The house was purchased in Anna and Kevin's name.
This gesture of parents gifting their life savings to adult children was common in Chinese culture, as the children are then said to have a filial duty to look after their parents in old age. Certain laws in China would also offer financial protection to elderly parents if their children were to die before them.
It wasn't until a recent encounter with NSW Trustee and Guardian that Anna realised, with all her assets now tied up in Australia, her parents would not be financially protected at all if something was to happen to her.
Most people overlook the fact that, without a Will, the law as to who receives your estate if you don’t have a Will varies significantly between countries.
According to NSW intestacy law, if a person dies without a Will, the spouse is entitled to the whole estate unless the deceased has children from previous relationships.
If the deceased has a child or children from previous relationships, the spouse is still entitled to all of the deceased’s personal effects, a statutory legacy (currently around $490,000, but this figure is adjusted regularly to the current Consumer Price index) and half of whatever is left, while the remaining half is shared between all of the deceased’s children. If the estate is not sufficient to cover the statutory legacy, then the spouse will be entitled to everything.
The laws in other countries can be significantly different. In some countries sons and daughters can inherit differently and in others, parents are taken into consideration. In some countries the law defines who will benefit from a deceased estate regardless of whether there is a Will in place, in others you may be free to make a Will leaving your estate in accordance to your wishes, but subject to the rights of certain people to claim against your estate.
In Anna's case, she had made assumptions of her circumstances based on her familiarity with the Chinese Succession Law and believed that her spouse, children and parents would all receive an equal share of her assets. Without giving it too much thought, Anna had simply assumed that her parents and daughter would be protected with a share of her estate if something was to happen to her.
Ms Natalie Darcy, Senior Estate Planning Solicitor at NSW Trustee and Guardian says that writing a Will is important if you have certain family values, cultural heritage or beliefs that you would like to uphold for your loved ones in relation to your assets after your death.
‘Whether you have parents, children or other family members who you would like to look after financially, it is important to have formal documentation in place to help ensure your assets are distributed according to your wishes. Without a Will, no-one knows who you want to inherit your assets or sentimental items.’ says Ms Darcy.
She also pointed out that if a person has assets overseas and in Australia, multiple Wills may be recommended.
"Although international Wills are now recognised in certain countries, it is still best practice to seek proper legal advice and give consideration to things such as the appointment of executors, taxation implications and the probate and inheritance laws applicable in the other countries." says Ms Darcy.
"NSW Trustee and Guardian, for example, are experts in estate planning laws in NSW, but if you live in or have assets in another country, it is important you also receive advice from people who are experts in relevant laws of that country."
There are certain milestones in our lives that make it even more important to have a Will. If you’ve welcomed a new member of the family, had a change in relationship status, made travel plans, bought a house or thought about retirement, it’s advisable to talk to a professional and perpetual Will-maker like NSW Trustee and Guardian.
* Names and identifying details may have been changed to protect the privacy of individuals.