I’M YOUNG, SINGLE AND HEALTHY, WHY SHOULD I CREATE A WILL?

As a young, healthy, and single person, the idea of creating a will might not seem necessary. You might be focused on other priorities like advancing in your career, completing your studies, or staying updated on the housing market trends. However, estate planning is an essential step to ensure your assets are handled according to your wishes, no matter your age or relationship status.

Here are a few important reasons why having a will—along with other key estate planning documents—can make a huge difference.

  • What Happens if You Don’t Have a Will?

Meet Peter, a 21-year-old who tragically passed away in a workplace accident. While Peter didn’t have much in terms of assets at the time, his estate did include significant insurance payouts, superannuation, and damages. Because Peter did not have a will in place, the laws of intestacy took over, and his estate was split evenly between his parents. Peter had been estranged from his father for many years and was living with his mother at the time of his death. It’s likely that he would have preferred his entire estate to go to his mother. Unfortunately, without a will, Peter lost the ability to make that decision for himself.

Having a will in place ensures that your estate goes to the people you choose, whether it’s family, friends, or a charitable cause.

  • Superannuation: It Doesn’t Automatically Go to Your Will:
    One aspect of estate planning that many young people overlook is superannuation. Your superannuation benefits do not automatically form part of your will. Instead, the trustees of your super fund decide who will receive these funds when you pass. This becomes especially important if you have life insurance or significant superannuation savings.

Take the case of Ashleigh, a 23-year-old who was tragically killed in a traffic accident. Ashleigh had been in a relationship with Rod, a much older colleague. While Ashleigh intended for her superannuation death benefits to go to her mother, her nomination was invalid under superannuation laws. As a result, her benefits were paid to Rod, her de facto partner, sparking a lengthy and public battle over the funds.

To avoid this kind of confusion, it’s essential to make a binding death benefit nomination with your superannuation fund. This ensures your super goes to the person or entity you intend, whether that’s your estate, your partner, or a family member. Keep your nomination up to date, as it could prevent unnecessary legal battles and ensure your wishes are honored.

  • Centrelink Considerations for Your Beneficiaries:
    If your beneficiaries rely on government assistance, such as a Centrelink pension, the transfer of your assets could have unintended consequences. Consider Sarah, a 32-year-old professional who unexpectedly passed away in a car accident. Sarah had created a will leaving everything to her father, Bill, who was receiving a Centrelink Aged Pension.

However, under Centrelink’s deprivation provisions, Bill was considered to own Sarah’s assets for five years after her death. This meant the inheritance affected his eligibility for the pension and other financial supports. Bill had preferred that Sarah’s assets go to her siblings, but this wasn’t possible without proper planning.

When naming beneficiaries in your will, always consider their financial situation and whether receiving your assets could affect their eligibility for government benefits or create other financial challenges.

KEY TAKEAWAYS FOR ESTATE PLANNING:
No matter your age, relationship status, or the size of your estate, estate planning is essential. Here are four key takeaways:

  1. YOU MAY BE WORTH MORE IN THE EVENT OF YOUR DEATH THAN YOU REALIZE. Life insurance, superannuation, and other assets can accumulate to significant amounts.
  2. INTESTACY LAWS MAY LEAD TO YOUR ESTATE BEING DISTRIBUTED TO PEOPLE YOU WOULDN’T WANT TO BENEFIT. A will ensures your estate goes where you want it to.
  3. WITHOUT A BINDING NOMINATION, THE TRUSTEE OF YOUR SUPER FUND DECIDES WHERE YOUR SUPERANNUATION BENEFITS GO. Make sure you nominate a beneficiary to avoid surprises.
  4. CHOOSE YOUR BENEFICIARIES CAREFULLY. CONSIDER THEIR FINANCIAL CIRCUMSTANCES and the potential impact on their benefits or finances.

Estate planning isn’t just for the elderly or those with significant wealth—it’s for everyone. Taking a few steps now can provide peace of mind and protect your loved ones from unnecessary complications in the future.

General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC and VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement for this purpose