Case Study: A Will for an Older, Single Man

Case Study: A Will for an Older, Single Man

In our case study, Jay and Gloria divorce. Gloria and Manny return to Columbia and take Joe with them. Jay and Gloria reach an amicable property settlement.

Jay has two adult children from his first marriage, Claire and Mitchell, and he has the young Joe from his marriage to Gloria.

Jay still has significant assets after his settlement with Gloria, including a small business, a house, bank accounts a motor vehicle, and a self-managed super fund from which he is drawing a transition to retirement pension. He has no life cover.

Executors

Jay will need to nominate at least two executors, because Joe is a minor and his inheritance will be held on trust by the executors as trustees until he is old enough to inherit.

Jay will appoint Claire and Mitchell, with Phil and Cameron as respective alternatives. He considers appointing Gloria, as she would then have some say as the trustee for Joe, but then decides it is too difficult with her in Columbia.

Beneficiaries

Jay decides on his death that he does not want the estate to be divided equally, because Claire and Mitchell are doing well for themselves, but Joe is so much younger he decides Joe needs a greater share of the estate. He decides that half his estate will be left to Joe, and Claire and Mitchell will share equally in the other half.

Joe would have to be 25 years old before he inherits, so Claire and Mitchell will be trustees of the minor trust for Joe. At Claire and Mitchell’s discretion, funds can be used to assist Joe’s education and living expenses.

If Claire or Mitchell predecease Jay, he decides that their children should equally share in the part their deceased parent would have otherwise received. They will have to be 25 years old before they would inherit. If Joe predeceases Jay, he decides that Joe’s half should just be shared by Claire and Mitchell.

The Small Business

Joe has been able to step back from his business a bit, by hiring employees. He has not yet considered a strategy to either sell the business or pass it onto a staff member to run, such as Claire. He does not intend for the business to cease operating if he dies or becomes incapable, so this will be his focus for the next couple of years – to establish and begin to implement a succession plan.

Superannuation

Because he doesn’t have a spouse, Jay will not nominate someone for a reversionary pension from his superannuation fund. Instead the fund will be wound up on his death and he makes a binding nomination that the trustee is to pay all his super into his estate, so that it becomes part of his residue and is split between his children in accordance with his Will.