What Are Non-Estate Assets?

by Ivy Casquejo

Did you know that not all assets are part of the estate?

Wills and estate planning is not just about your wishes but it is also about what you own. As a wills and estate planning solicitor, the first question I often ask my clients is about their assets because it is important to consider what actually can be distributed in sthe Will.

It is important to know that not all assets form part of the estate, hence, not subject to provisions of the Will. These assets are called non-estate assets. As the name implies, non-estate assets are assets which you do not have legal ownership nor own in your personal name at the time of death. These assets are typically dealt in different documents or in accordance by law.

Examples of non-estate assets are:

• Assets held jointly with someone else

Assets jointly owned means owners do not have an individual share in the assets but own the whole assets with another person. That means that when one of the joint owners dies, the interest of the deceased joint owner automatically passes to the surviving joint owner by way of right of survivorship. Therefore, the assets do not form part of the estate of the deceased. These assets include but not limited to joint proprietors in the certificate of title, bank accounts, term deposits.

• Superannuation

Superannuation is an asset held on your behalf by the trustee of your superannuation fund. It is generally the trustee determines who to distribute the payment after you die. Superannuation is dealt with under different laws so they do not automictically form part of the estate unless the testator tells the trustee where and who superannuation be paid after the death through binding death nomination.

• Assets in a trust

Assets and the beneficial interest in the trust are dealt with in accordance with the trust deed. These assets are owned by a trust and considered a separate legal entity. Hence, it may continue to be managed by the person nominated in the trust deed.

• Life insurance

Life insurance is considered non-estate assets when the policy allows the insured person to nominate a beneficiary directly. Should the insured person did not state who is the beneficiary, then the insurance company or the fund may have a discretion where and who to distribute the insurance, hence, it does not automatically form part of the estate.

• Company assets

A company has its own legal personality and separate entity from the owner or directors. The assets of the company are non-estate assets because these are owned by the company per se.  However, the share in the company may be owned in personal name and such may form part of the estate. Consequently, shares may be disposed to whomever in the Will and may potentially affect the manner of ownership and control of the company.

To avoid mistakes in your estate planning, it is important to regularly review and update your documents. We strongly recommend to consult solicitor to ensure that your assets are distributed according your wishes. We at TBA Law look forward to helping you find the better approach for your estate planning.

Get in touch with our team at 1300 043 103 or send an email to admin@tbalaw.com.au to book your appointment.