Why Beneficiaries Often Don’t Receive The Full Legacy Intended For Them and What You Can Do To Make Sure That Doesn’t Happen To Your Loved Ones.

Hi. We’re Tony and Ruth,

Many Australian will-makers are blissfully unaware a basic will may not be enough to ensure their wishes are carried out as they hoped. Over the next seven-minutes to learn why that is happening and the first step to ensuring that doesn’t happen to you and yours. Enjoy.

Did you know that, it’s common for claims, challenges and taxes to cost beneficiaries chunks of their inheritance?

It’s happening for a few reasons.

The main reason is that although we don’t “feel rich”, many of us are leaving more to our beneficiaries than in previous generations but aren’t doing so with adequate documentation.
Think about it…
  • Is your house more valuable than 10 years ago?
  • Is your superannuation balance higher?
  • Do you have life insurance?
If you answered yes to any of these, it is possible your beneficiaries will be short-changed, if all you do is a standard will.
Now think about these…
  • Do you own a business, practice, or consultancy?
  • Do you have jointly owned investments?
  • Do you have assets you control but don’t own?
If you answered yes to any of these, you almost certainly need an estate plan that is more comprehensive than a standard will.

The good news is…You can take steps to ensure your beneficiaries are protected. In most cases for price of a big screen TV that will be redundant within a few years.

There Are Two Levels of Wills

Standard Will or Smart Will

If you want to leave a longer-lasting legacy, choosing the right level of will is a pivotal decision. For some people, a standard will is enough; for many of us, a more sophisticated will is required. We call that a “smart will”. You need to prepare the right level of will for you and your unique circumstances.

It is important to note “Smart Wills” and “Standard Wills” distribute assets differently.

With a “Standard Will”

The Will-maker’s Estate Assets Are Gifted Directly to The Beneficiaries

Because your assets are gifted directly to beneficiaries with a “Standard Will”, this can leave your beneficiaries exposed to claims and uneccessary taxes.

Although a standard will might be enough for you, it is wise to consider if you need something more.

With a “Smart Will”

The Will-maker’s assets are distributed to a “Special Trust” and then used by the beneficiary as required.

Because a will-maker’s assets are distributed to a special trust created for the intended beneficiary, instead of the beneficiary personally, this gives the beneficiary access to

  1. Asset protection opportunities – so the inheritance is not wasted away if the beneficiary gets divorced or sued
  2. Tax reduction opportunities
  3. Flexibility in the way the inheritance is managed

Worth doing if you can.

The Will You Choose To Prepare Can Make A Huge Difference To How long Your Beneficiaries’ Inheritance Lasts And The Amount They Get To Enjoy.

Now we’ll touch on the benefits of the ‘smart will’ so you can make an informed decision about whether it is of importance to you.

Asset Protection Benefits of A Smart Will

When you prepare a “smart will” a protective barrier is formed around the assets you gift to beneficiaries.

The good part about providing a protective barrier like this is, the assets placed into a special trust for a beneficiary can still be enjoyed in the same way, as though they were owned personally. Your beneficiaries have the security of knowing a protective barrier is keeping their inheritance safe.

The Asset Protection Barrier Protects Against Typical Costly Claims.

Creditor Claims
If one of your beneficiaries was to have a failed business venture resulting in a bank or landlord coming after their money. The creditor like a bank or landlord would be unable to access the inheritance.
Relationship split-ups

If one of your beneficiaries experienced a failed relationship. Their inheritance would be protected from their ex-partner ensuring the wealth stays in your bloodline.

Social Media Defamation
If one of your beneficiaries made an ill considered social media comment deemed defamatory. The person suing them would be unable to access the assets you left.
Employee Claims
If a digruntled employee or injured employee attempted to sue a beneficiary who is a business owner.  The employee will be unable to access the inherited assets.
Traffic Claims
If one of your beneficiaries unwittingly neglected to update their car registration or insurance and subsequently caused an accident. A neck brace litigant will have no access to a beneficiary’s inheritance.

These are just a few typical examples of claims that call for asset protection features in your will, but there are more.

The Beneficiary Protection Benefits of a Smart Will

Do you have a beneficiary who you believe is unable to manage money responsibly?

A “smart will” can add a protective barrier between beneficiaries andtheir inheritance.

It works like this… You use the unique structure of the “special trust/s” to provide protection.

By appointing a controller and trustee other than your beneficiary you can protect beneficiaries from poor decisions while offering them a safety net, income and capital as required.

Typically people adopt this structure to protect beneficiaries like the following types

Beneficiaries who are gamblers
Beneficiaries who are addicted
Beneficiaries who are irresponsible or reckless
Beneficiaries who are mentally unwell
Beneficiaries who are spendthrifts

You can apply the benefits to anyone who is unable to manage their inheritance responsibly.

 Tax Benefits Of a Smart Will

Many Australians are enjoying thousands in tax savings by using these special trusts.

The tax savings apply to both income tax and capital gains tax. Depending on your family group and circumstances the saving could be thousands, tens-0f-thousands or even hundreds-of-thousands of dollars.

When an inheritance is invested through a special trust incorporated in a smart will, special tax concessions apply. These tax advantages are not available if assets are gifted to a beneficiary directly through a standard will. These concessions are also not available if the beneficiary establishes a family trust, after receiving the inheritance. They generally only apply where the trust is specifically created by the will.

Want to know if your individual circumstances enable significant tax reduction features to be incorporated in your will?

The extent to which your beneficiaries will benefit from a smart will depends on your circumstances and those of your intended beneficiaries. If you are unsure whether these opportunities are available to you, contact us to learn more.

So, now you are ready to start leaving a bigger longer-lasting legacy by preparing the will level that incorporates the protective features and opportunities for your beneficiaries that is right for you.

We sincerely hope we’ve helped clarify your first step and empowered you to make an informed decision that your loved ones will thank you for.

Hopefully you have recieved enormous value and insight. 

What’s Next?

There are two other equally important steps to ensure your beneficiaries will receive all you intend for them. Click here to continue learning with us.


Book a free discovery discussion with us and we can help you in person. The call is the first step in our simple 3-step service designed to to help Australians leave a bigger, longer-lasting legacy.