Restrictions with estate planning

Date: Dec 12, 2012

There are several restrictions with estate planning which you need to remember when you decide to take the important step of drafting a will.

There are things you cannot put in a will because of legal reasons, most commonly because you do not have the legal right to do so. You can only bequeath property you actually own.
Before drafting your will check whether you own property you plan to bequeath and it is not held by a trust or your company.

If you own property with someone else it is important to check whether you hold the property as joint tenants and tenants in common. If you own property as tenants in common you own a share of that property which can be left to a beneficiary in your will. If you own property as joint tenants you are restricted from bequeathing it because when you die it will pass by law to the surviving joint tenant.

You may also be restricted from passing shares on to your beneficiaries. Any restrictions on the transfer of shares will be set out in the company’s articles of association. Shares may be subject to rights of pre - emption.

A common restriction with estate planning is your ability to bequeath your superannuation. Superannuation must be investigated because the rules of each scheme differ and determine
whether you have the power to include it in your will.

A key restriction with estate planning is that to make a valid will you must have capacity. This refers to having the mental capacity to make decisions regarding your estate. A lawyer drafting your will must satisfy him/herself that you are of sound mind before you execute your will. As such, wills drafted by lawyers are less susceptible to challenge.

When drawing up your will, you need to consider what you actually own such as property, land, cars, jewellery, bank accounts, household goods and accounts.Also think about who you actually wish to leave your things to, whether it is family, friends and charities.

Certain people such as children and spouses may be entitled to a portion of your estate. If you omit to provide adequately for those who depend on you a court case could result.

To talk to an experienced lawyer about your will and any restrictions with your estate planning call Dominic Wilson on 02 8268 4000.