How Your Inheritance Can Be Taken Over Without a Proper Will

Jason · 00:00Welcome to episode 258 of the Numbers Game. I'm Jace. I'm here with Nick and Marty, and if there's a few things in the world that are certain it is death and taxes, we talk about taxes a lot. But maybe today, Nick, you might be bringing us something different. What do you got?

Nick · 00:14Uh, well, yeah. Death. Death and death and death.

Nick · 00:20Great. Death and assets. And what happens to your assets if you experience death? Um, Jace question. You're a very trusting man. Very trusting man. Some might say, too trusting. Would you leave your inheritance as far as dealing with your inheritance up to the government? Our trusty government. Ho,

Jason · 00:43ho. Easy one.

Jason · 00:44Didn't even have to swallow that grape as fast as I did. Uh, absolutely not.

Nick · 00:48Absolutely

Jason · 00:49not.

Nick · 00:49Marty.

Jason · 00:49You know? Yeah, no, that's it.

Marty · 00:52That's a rhetorical question for me. There's no hope in hell that that's happening.

Jason · 00:56Anyone who listens to the numbers game know that we've got quite a bit to say about the government at times.

Jason · 01:00So resounding no is from Jason Marty.

Nick · 01:03Yep. And I think it'd be resounding no from, you know, anyone who was asked that question. So, you know, we've, we've spoken about wills before and the importance of having a will. Um, I, I did see a show last week and it just, it, it just talked about someone's experience who didn't have a will.

Nick · 01:23And it reminded me of an experience that I had myself, um, with my grandparents. And, you know, helping my, um, my mom out get through that. Um, and I thought it would be worth talking about, you know, the, uh, implications of not having a will as in, not so much your money not going to the right area, but the, the, the delays that can cause.

Nick · 01:43Um, and second to that, just how imp it's becoming more and more important because. Uh, people are dealing with a lot of wealth now, whether they've considered themselves wealthy or not. You know, if you've got, um, you know, a, uh, a mom and dad who have passed away in and they had a decent house in a decent suburb in Melbourne, there's every chance there's $2 million worth of inheritance to be dealt with.

Nick · 02:10Um, the superannuation scheme, you know, people never used to have super. Now there's big super balances being left. Uh, life insurance policies, share markets are at all time hires, so if they've had shares, they're now worth more than what they were, um, 10 years ago. So. There's just, there's this spike in, um, wills being contested at the moment because of these particular reasons.

Nick · 02:33Um, just to give you some stats, 'cause Stacey, you're a numbers man. Um, 60% of Australians now die without a valid will. Um, in 2024 in New South Wales alone, there were. 1,461 contested estates.

Jason · 02:50Wow.

Nick · 02:50Just last year, um, 29,000, well, pretty much 30,000 probate probate ca uh, cases handled in the New South Wales courts just last year.

Nick · 03:00So obviously New South Wales show I watched. Mm-hmm. Um, and obviously we deal with superannuation in our business. For your superannuation to go to the right dependent. If you don't have a will in place, you have to sign what's called a, uh, a binding death nomination. So, uh, for me, if I was leaving it to my daughter, um, I would do a binding death nomination and I'd have to update that every three years.

Nick · 03:27Mm-hmm. The reason you've gotta update them is. Marriage breakups, you know, might be some, it might not even be a marriage, it could just be a separation where you had your partner and then that changes. So every three years that needs to be updated. Um, but as it stands at the moment, 6.5 million Australians have no binding nominations in place with inside their super.

Jason · 03:47Wow.

Nick · 03:48So it's a big issue at the moment, and you can see why things are getting contested, particularly with split families where things aren't. Uh, it doesn't, you know, it's not obvious what's going to happen. Um, but anyway, that kind of talks about the issue that we've got, but I wanted to talk about the process that would happen if you don't have a will.

Nick · 04:08And, and that is, it gets dealt with by the state trustees. And I think, I think going back, um, my personal experience is my grandparents, so. You know, they would've been sort of in their nineties now, late eighties, nineties. They both passed away and, you know, hardworking Australians, um, not considered wealthy.

Nick · 04:30Um, but, um, you know, so when I say not considered wealthy, not the type that would think that they should see, get a will or see a lawyer. Um, so they actually put all of their faith and my, my grandfather in particular put all his faith. In the state trustees. Um, 'cause that's what he knew. That's what he knew.

Nick · 04:48And he thought that that's how things would get dealt with, um, you know, in the best way they could. So our particular case was. Not so much that the state trust, straight state trustees, excuse me, um, did the wrong thing with the money. It was just the process that we had to follow and the emotional drain and in the end monetary drain that that caused.

Nick · 05:12So. My grandparents had a house on the central coast, little town called Yin, right near Gosford. Beautiful town, uh, paid nothing for the property. Um, you know, it was worth quite a bit of money. Uh, by the time they passed away. My grandfathers tell me all the time he paid in pounds and built the house and all that kind of stuff.

Nick · 05:30Um, but when they both passed away, it went to the state trustees to be dealt with. And the state trust trustees is obviously a government, um, organization, so it's highly under-resourced. And I reckon we were with the state trustees for about a year and all we were trying to do is get the state trustees to appoint a real estate agent to sell the house.

Nick · 05:55So we had to put up, um, three. Three agents that were, um, that we wanted or we wanted to recommend to sell a house, something like that. Um, and then they would, they would get different valuations 'cause they're the trustee. So they're trying to get the best result. So they wanna be involved. Um, and it was a few years ago, and you may or may not remember, but um, new South Wales had some torrential, uh, rain, um, a couple of years ago.

Nick · 06:22And this was an old house and it got absolutely pelted with rain. And in the nine months that it sat there doing nothing, not on the market, there was a lot of damage. Um, and it had a massive impact on the valuation and. Also the property market had come back slightly, uh, from when, you know it really should have been sold.

Nick · 06:41So that, so that was my personal experience. And then I see this, um, uh, this story on the news the other night about a, a guy named Tim Brigden from Sydney. So Tim's, um, family nominated straight state trustees. Both of his parents have died. He is the only child. So there is no other kids. He's the only child.

Nick · 07:05So his assumption is that his parents, and my assumption would be too, his parents' inheritance will pass to him. Tim has now spent three years arguing with New South Wales public trustees. Um, and what he's trying, this is his own words, what he's trying to, um, argue with them that. In the estate's best, it's in the estate's best interest that he's actually the trustee.

Nick · 07:31So, you know, there's, there could be more to this story because you know, you don't really know. Um, but the reality is on the surface, he's the only child, um, and he's now being, doing, um, or fighting this for, for three years. So you've got costs from a legal point of view. You've got the emotional drain, you've got the opportunity cost of not having that inheritance, um, working for you in, in other ways.

Nick · 07:58But it, it's, for me, it's just the timing and it just reminded me of the process that we went through and how can it go on for three years. It just doesn't make any sense. Like it should be able to be dealt with really, really quickly. So, yeah. People don't, it's not just about, um, the will, and we would've said this in the last episode, but it's not just about getting the money to the right place, it's the speed and how quickly it can happen.

Nick · 08:22Um, and you don't wanna be in the position where you are dealing with, um, a government organization that's heavily under-resourced, that's dealing with more and more cases, um, 'cause it's only gonna get worse. Um, any personal stories or any experience with state trustees? You boys.

Marty · 08:41No, you haven't. But I, I find it challenging to, like you said, I didn't have a will the last time we spoke about this, and I ran out pretty quickly and got one.

Marty · 08:51Uh, so it had an impact, um, that discussion. But again, yeah, it's, it's the lack of control. It's not even the speed of money, but all of a sudden someone else is controlling your own family's assets. Mm-hmm. And I don't like that because you, you're disempowered and then you're having to fight for something.

Marty · 09:10'cause you're going through enough grief with the death of the person. Right. Let alone now having to fight a battle on the back of it to try and do what's, you know, get what's right. Um. So no matter, even if there's a positive outcome, it just feels like a really horrible process to go through, um, emotionally and financially.

Marty · 09:28So it's, um, yeah. Yeah, I, I think, yeah, definitely, definitely get a will.

Nick · 09:35Yeah. And one of the, one of the biggest issues they pointed out too on this particular story was the rise in, um, the rise in popularity of online will kits and just the issues that they cause. Um, because the, there's a lot of factors that aren't considered.

Nick · 09:52Um, and yeah, you know, not to repeat myself, but this wasn't a problem. Sort of 50, 60 years ago now that properties are worth so much. Wills are getting contested or estates are getting contested. Um, but yeah, I just, I don't know. I just think, um, yeah, it's so easy to get a will and it's so simple, um, that it's something everyone should be doing.

Marty · 10:15I, I think you make a good point there though, with the, um, with the wheel kits. Because people generally go to the cheapest option without recognizing that could be the most expensive, really. But that's, that's where the general, you know, general consensus people will go to that as the first point of call.

Marty · 10:35So, Nick just didn't, I mean, you do estate planning there at Innovator as well, so you're sort of, you know, sharing strategies in regards to how to best, you know, utilize. That sort of transition, um, what, what do you see or what have you read or what do you know in regards to the difference between those will kits and actually having something that's, that's very, you know, that's through a lawyer?

Nick · 10:59Yeah. I think there's a lot like some of the key things that aren't considered, uh, you know, like blended families and, you know, who could contest this and, um. I think when without, uh, without an expert on the other side of the table asking you specific questions, there are things that you're probably not going to be thinking about yourself.

Nick · 11:20That's probably the best way I can explain it. So, Marty, if you fit, you know, you're obviously a finance and a business expert, so if you sit across the table from someone who's not and they're thinking about buying a business. You are gonna challenge them on aspects. What if aspects, what if this happened?

Nick · 11:35What if that happened? Um, it's not just them saying to you, Marty, I wanna buy this business. It looks great. Look at the bottom line. Can't wait. You're gonna say, okay, well, um, what's the long-term viability of the industry? What's your, what's your competition look like? Uh, what happens if you leave one, you lose one of the key people.

Nick · 11:53Um, you know, what's your, what's your long term goal here? You're trying to build a business that you don't need to be in. So. These questions get asked, um, by the right people being lawyers or family estate lawyers. Um, that will combat any of these issues that could come up, um, when it does come time for your will to be, um, initiated and possibly contested.

Nick · 12:17So yeah, that's probably the best way I could explain. It's without going into actual things.

Marty · 12:20That's a great point. I've been working sort of just with an architect doing little Reno and, um, and they've just, they've got a design, um, background and I go, I had sort of ideas on what I wanted. And then having an expert on it, I just go, you don't know what you don't know until you realize you know nothing.

Marty · 12:40Mm-hmm. And it's like, and that, that would be the same I would think sometimes with clients, sometimes in the legal field. Definitely. Um, so again, when you feel exposed, because you going far out, I just don't know. I don't understand any of this really. It's, um, it's important to get the right direction and, and really protect yourself with the right information.

Jason · 13:02A couple of ones to add to the either not having a will or having a poorly drafted will from, you know, a basic kit that doesn't go into detail. Family trust with corporate trustees or family trusts. Mm. So often it talks about in a will it says, I'm gonna leave this asset to this person. But if that asset was actually owned in a family trust, it wasn't up to that person to put that in their will to then pass that on.

Jason · 13:24Because it's the family trust asset, not that particular individual's asset. So there's a, a, an issue that pops up straight away comes down to then understanding, I mean, accountants will go and recommend structures for clients. We do it, we're guilty of it. You know, we send a bunch of info and just expect a client or read it.

Jason · 13:42But you know, you need to understand what is an appointor. And the appointor is who really controls the trust because they can remove and appoint a new trustee. Um, so you know, if the person who passed away was the director of the trustee company or the trustee, it's the appointor who needs to then go and make the change to who that person is.

Jason · 14:00So this should be laid out in the will. If a will fails to nominate a new appointor to the trust, then all of a sudden it can be unclear of who. This passes too, and it may end up with an unintended person becoming in control. There's also beneficiaries of a trust, um, often as you said, Nick, blended families, marriage breakdowns, new, um, new marriages that come along.

Jason · 14:21You may have started a family trust in your original marriage. You may have separated from your partner and you have a new partner, but if you departed, spouse is still listed as a primary beneficiary, could open up some issues. So you need to look at amending. Yeah. Previous family trusts.

Nick · 14:36Yeah. And another, another thing I'll add to that, you see this a lot where your, your ex-partner is the primary beneficiary and not your children and the ex-partner remarries, which means you, you kind of lose control over your kids getting that money 'cause there's now a third party involved that number one, you dunno obviously.

Nick · 14:57And number two, um, you have no control over and you dunno what they're like. So if that, uh, new partner coming in is rogue. There's all kinds of things that can happen and we've, we've seen that quite a few times.

Jason · 15:09Yep. Seen that in family personal story as well. Um, where Yeah. New wife comes in and, and changes are made to the will.

Jason · 15:16Yeah. Pretty, pretty devastating effects.

Nick · 15:18Yep.

Jason · 15:18The other ones on that list are then, you know, flow on from trust. You've got companies, if you're a director of a company, a shareholder of a company, um, especially in private companies like what you were just saying, Nick, but you know, need to say if you are a sole director and sole shareholder and, and it's your will and you're passing away.

Jason · 15:33Where does that con control go to? What is the expectation of what happens to that? And often the part of family business disputes is, you know, who gets what in, in, in a sense of a business and also getting the value out of that. And in this new day and age, Nick, you know, you guys probably see it a little bit innovate, but digital assets, cryptocurrency in a, in a wallet, whether it's a, I think it's hard or cold or hot or cold.

Jason · 15:56Few different words for it. Um, I'm gonna get drilled by the crypto, uh, crypto people online that just think I've absolutely cooked that. But the crypto wallet, you know, you need a key, no key, no asset. So all of a sudden you might have invested in Bitcoin, Ethereum, any crypto asset. All of a sudden, you know, if something happens to you and you think your loved ones are gonna get that, is it clear how it's accessed, where it is held?

Jason · 16:18What is the password to get in? 'cause quite often this stuff disappears and you know, it'll never be found again. Um, yeah, just a couple of extra ones to add in there.

Nick · 16:27Yeah. All great points. And I, I think one of the main messages, um, that I wanted to get clear here was. The, the, the faith that my grandparents had in the state trustees.

Nick · 16:40Mm-hmm. So they thought they were doing the right thing. And look, at the end of the day, it all worked out, but I obviously wasn't around in that era, but I kind of got the feeling that, okay, this po this, um, this, this age group, this is, this is what they were taught was the right thing. And if you think back to, you know.

Nick · 17:02Fifties, sixties, whatever, however far you wanna go back. You can imagine that probably only the wealthy have lawyers.

Nick · 17:09Mm.

Nick · 17:09You know, that's, that's my, that's what I'm assuming. So, so my grandfather in particular, as I said, he had complete faith in the state, state trustees, and he actually, one of them involved because they would act as the middle, the the middle, um, person in between.

Nick · 17:26Sisters, you know, so I guess the other message is, you know, if you are in your, you know, if you've got elderly parents, um, it is worth asking the question not to, you know, be able to drive the will in a particular way, but. Hey, have you got a will in place? And just make sure they don't go, oh no, it's with the state trustees and that's, that's the best option 'cause that's how we do it.

Nick · 17:47So, uh, that's probably the thing that really surprised me, that my grandfather thought that was the best way to go. Um, and was doing what he thought was the right thing. Uh, 'cause he probably just didn't know any better, you know?

Jason · 18:01Hundred percent. I think, uh, if, if the fact that we've done a, a follow up episode on this, it's clear that it is a, a key issue that people need to take seriously.

Jason · 18:11Um, so, you know, just like the last episode, we stressed, go out there, look into it, get a referral if you need one, reach out to myself, Nick, or Marty, if you want a referral to some other, can help you out. If you don't have someone in your network,

Marty · 18:22Jason, Nick, is it just an estate planning lawyer or you just go to a general solicitor?

Marty · 18:27Like wh when do you go to those? Are they different, just sort of. Give the audience something on that. Um,

Nick · 18:34yeah, there's people that specialize in, um, in estates, but, uh, most, most law firms will have someone within their, um, within their group that does that. Now, that's generally how it works as, yeah, this as do different, specialize in different areas, so, and if they don't, they'll refer you to someone.

Nick · 18:50Um, financial planners the same like we work with, um, we obviously don't do the, the legal side, but we work with a group, you know, a couple of groups that, um, that look after the family estate for us. Estate planning.

Jason · 19:04Pretty sure as well. Uh, a will for it to be legally binding and done properly needs to have, um, a few people formally present face-to-face.

Jason · 19:13I think multiple people have to sign at the same time, in person in a room just to make it legally binding as well. Um, so if you are doing one-on-one and it's digital signature and it's remote, um, probably a red flag there that you actually need to get into a room with the appropriate parties when it comes to setting things up properly and having it legally binding.

Nick · 19:32Yep, exactly right.

Jason · 19:34It's, uh, absolute banger again. It's, uh, the, you know, we, we exist to help people learn to, to share education, to share our war stories, and to share other people's war stories. So, Tim, new South Wales, hopefully you're getting it sorted. Um, there was an article, you know, it's, uh, as late in, in late September, there was an article still going with, uh, Tim and lawyers still fighting this.

Jason · 19:55So, uh, don't be Tim. Get out there, get your will sorted. Um, you know, if you haven't contacted Innovate and you don't have a financial advisor, this is also a good time to. Get your superannuation looked at, get that binding death nomination sorted. Um, innovate, uh, look after. I've actually just got a message from Macy, uh, Casey and I have a meeting with, uh, innovate this evening to go over our budget and talk all things exciting.

Jason · 20:19Lucky day. So a lucky day. Um, but this isn't about me. It's not about in just innovate. Although we do love innovate here at the Numbers game. Uh, this is about you getting your will sorted and being safe and secure, and, uh, not having things go pear shaped when you are gone. Until next time.

Marty · 20:33Protect your loved ones, control your assets.

Marty · 20:36Game over

Jason · 20:39this podcast is for educational and informational purposes only. The conversations are of a general nature and do not qualify as financial or tax advice. We recommend before you make any financial decisions, you consult a licensed professional. Individuals on the podcast may hold positions in the companies discussed. ---