Too young for a will?

Published in the Coffs Coast News Of The Area on 10 May 2024.

Daniel and Amy, in their twenties, purchased their first home a year ago and recently gave birth to their first child.

Amy tries to talk to Daniel about their estate planning but Daniel is reluctant to discuss the matter. He says that the subject “gives him the creeps”.

A few months pass and they decide to get away for the weekend. Amy’s mother, Mary babysits their child. Tragically, they are involved in a road incident and they never return.

Mary seeks legal advice.

Mary’s paramount concern is the guardianship of the child. She is informed that because there are no wills, there is no clear indication of Daniel and Amy’s wishes. This means that there is a higher risk of disputes and the potential for contested proceedings under the Family Law Act. These proceedings can be costly and detrimental to the future relationships between the extended family.

Mary is also advised that due to the nature of the road incident, it is unclear whether Amy survived Daniel. In these circumstances, the youngest is presumed to have survived the other and in this case, Daniel’s estate is entitled to their home, which was owned as “joint tenants”, but who would administer his estate and who would act as trustee for their child’s inheritance?

Whilst Daniel and Amy had made modest contributions towards their superannuation funds, they both had life insurance policies in place as part of their superannuation, which meant that their respective death benefits were substantial. However, they had not recorded binding death benefit nominations, so their superannuation funds could decide whether to pay the funds to Daniel and Amy’s estates or whether to pay the funds to another trustee, to hold until their child attained 18 years of age. The choice of trustee had the potential to create a dispute and the trustee’s ability to pay funds to the child’s guardian for maintenance and education was limited.

Appropriate estate planning could have addressed these issues and minimised the potential for disputes.

This column is only accurate at today’s date and is not legal advice.