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Too many times, we hear “I am only young and I don’t have any assets—I don’t need a will”.
However, the consequences of not having a will can cause a lot of heartache and pain for your loved ones.
Here’s an example:
Sarah is 22 years old and is currently studying at university and works casually at a bar. Her superannuation fund has $12,000 (but she also has $350,000 of life insurance which her superannuation fund pays for). She and her boyfriend have been going out with each other for over a year and for the past six months, have been living together in a rented apartment, sharing expenses.
Sarah has nominated her sister Frances to receive her superannuation. However, when she passes away unexpectedly, her superannuation fund sends a letter to Frances to ask her to prove how she was in an ‘interdependent relationship’.
While Frances and Sarah emotionally support each other, they don’t live together nor do they rely on each other financially in any way, so the superannuation nomination fails.
Her boyfriend, however, claims the superannuation as her de facto spouse and the trustee agrees and pays $362,000 to him.
In other words, Sarah’s wishes for her sister to inherit her superannuation weren’t carried out.
Remember the life insurance usually attached to your superannuation! Anyone that is working and has superannuation should have a will. Nearly everyone forgets that normally your superannuation policy has a life insurance policy attached to it, which could be your biggest asset if you pass away. So even if you don’t own any significant assets you still have a large payment that you should consider.
Remember you generally can’t nominate your siblings or your parents to receive your super! Time and time again we hear young people say “don’t worry I have signed a nomination and my siblings (or parents) will be getting my superannuation”. What they don’t realise is that superannuation benefits can only be paid to a very strict list of people in accordance with superannuation law including your spouse or a de facto spouse.
Even if you have filled out a form to nominate your sibling, the superannuation company often just accepts those forms, without ever actually checking to see if they are a valid beneficiary.
Once you pass away, if you don’t have a valid nomination, and there are no other eligible beneficiaries then the trustee of a superannuation fund is likely to pay to your ‘Legal Personal Representative’. This can have unintended consequences.
If you are young, or have any family members who are young, contact us now so that we can assist.
firstname.lastname@example.org (02) 6279 4444