Transferring Assets After Death: What You Need to Know

Understanding how assets are transferred after death is crucial for effective estate planning. This article aims to clarify what happens to different types of assets when someone passes away and how they are dealt with in a Will and during the administration of a deceased estate.

Here’s A Guide To How the Following Assets Are Handled

Personal Chattels

Any assets solely in the deceased’s name are managed according to the terms of their Will. This includes bank accounts, personal property, and real estate. The executor named in the Will is responsible for administering these assets, paying off any debts, and distributing the remaining assets to the beneficiaries.

Company Assets

If the deceased was a shareholder or director of a company, the company’s assets remain within the company. They are not directly affected by the death of the director or shareholder. However, shares in which a deceased owned in the company are dealt with according to the deceased’s Will, subject to any Shareholder Agreement(s) that the deceased has entered into with the company or other shareholders which could vary this position.

When a director dies, they will cease in being a director and the shareholders will need to appoint a new director. Any money owed by the company to the deceased will be treated as an asset of the estate and distributed accordingly, likewise any debts are treated similarly.

Trust Assets

Assets held in a trust, where the deceased was either a trustee or beneficiary, remain within the trust. The death does not directly affect these assets. However, the deceased may have the power to appoint a successor trustee or appointor. The deceased will no longer be a beneficiary, but if the trust owes money to the deceased, this loan will be an asset of the estate.

Partnership Assets

Assets in a partnership remain within the partnership. The deceased can only transfer their interest in the partnership, not specific partnership assets. Subject to any Partners Agreement, the deceased’s interest in the partnership and any money owed to them by the partnership will be managed according to the will.

Joint Tenancy Assets

Assets held as joint tenants automatically pass to the surviving joint tenant(s) upon the death of one tenant. This applies to real estate, joint bank accounts, and jointly held shares.

This can be a tricky one for blended families with much of the family inheritance and wealth in the family home. If you own the property, as most people do, as joint proprietors, and want to leave a share to beneficiaries who aren’t on the title you must address this appropriately.

Superannuation

Superannuation funds, whether self-managed or part of an industry fund, are held in trust. Death benefits from these funds are paid out based on a valid binding death benefit nomination or at the discretion of the fund’s trustee. Generally, the trustee can direct payments only to dependents (such as a spouse, child, or someone financially dependent on the deceased) or the deceased’s estate. Tax implications may arise from these payments, so it’s important to seek professional advice.

Getting the right estate planning advice is essential

Understanding the different ways assets are transferred after death is essential for effective estate planning. At PCL Lawyers, we provide expert guidance to help you navigate these complexities and ensure your estate is managed according to your wishes. Not all legal providers have a deep understanding of the administering an estate and the issues that arise.

If you have a trust or other business assets succession and estate planning is key to ensuring that there is a smooth transition of assets to the beneficiaries after your death.

Contact us today for comprehensive estate planning services tailored to your specific needs.

About the Author: PCL Lawyers is a medium-sized law firm in Australia, known for its expertise and quality work in family law and estate planning. Our experienced team is dedicated to staying updated with legal changes to provide the best possible service to our clients.

For more information or to discuss your legal needs, please contact out Wills & Estates Lawyers on 1300 907 335 or complete an online form today.

About The Author - Glenn Duker

Glenn Duker is Managing Partner, and founder, of PCL Lawyers. Glenn has a Bachelor of Laws / Arts from the University of Melbourne and was admitted to practice more than 25 years ago. He has...