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Assets and Liabilities of an Estate

August 1, 2013
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This article aims to provide a summary to guide you through the assets and liabilities of an estate, including assets which are not controlled by a Will and information about the lodgement of Caveats. 

Assets Which Are Controlled by a Will

    All assets which are owned by you do not always form a part of your estate and are not controlled by your Will.Joint ownership assetsAssets which you hold jointly with another person including your spouse and parents will pass on directly to the other person upon your death, irrespective of your Will.Usually these assets include home or real estate, bank accounts and personal properties.Sole ownershipAssets which are in your sole name and not jointly owned, will form a part of your estate and be controlled by your Will. These assets include real estate, cash, motor vehicles, shares, debentures, bonds and units in trusts.Unit trusts or companiesAssets owned by unit trusts or companies will not become a part of your estate, if such trusts and companies are controlled by you. However, the shares and units of the trusts and companies will form a part of your estate.Life InsuranceIn most of the cases, a person who is insured in a life insurance policy nominates another person such as spouse or children as the beneficiaries of the policy and not the estate as the beneficiary. In such circumstances, the proceeds of the policy are paid directly to the beneficiaries and do not form a part of the estate of the deceased.SuperannuationIn cases where your assets are held by a superannuation fund, those assets are usually passed on to your dependants such as spouse or children and do not form a part of your estate.

Lodgement of Caveats

In case you are residing in New South Wales (NSW) and you have a legal interest in a deceased estate, you may lodge a caveat on that estate with the New South Wales Land Titles Office.If you are an eligible applicant under the Succession Act 2006 (NSW Consolidated Acts) for a Family Provision Order, this does not mean that you have a legal interest in the deceased estate.You may have a legal interest in a deceased estate, if you are a mortgagee and there is an outstanding loan on a real property.The effect of lodging a caveat on a real property out of an estate is that the real property will not be distributed to its beneficiaries in accordance to the Will, until the caveat is removed.

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