Quick summary:
- Your Will only controls assets held in your name alone – a large portion of most Australians’ wealth sits outside it
- Super, jointly owned property, life insurance, family trusts, and company assets all have their own rules
- An outdated or missing super nomination is one of the most common causes of unintended outcomes
- Trust structures need careful succession planning – overlooking the appointor role is a frequent and costly gap
- A complete estate plan maps every asset, not just what’s in the Will
When people think about their estate, they tend to think about their Will.
But a Will can only deal with assets that actually form part of a person’s legal estate – and a significant portion of what most Australians own sits entirely outside it.
Understanding which assets fall outside of your estate is not just a technicality: it is the difference between an estate plan that works versus one that leaves behind confusion, unintended outcomes, and potential conflict.
Assets that typically sit outside the estate
Before beginning to plan your Will, you should have a clear grip of what assets you own, and how you own them. This will help you understand whether they are assets that your Will can deal with (estate assets) or if they are non-estate assets, in which case you will likely need to take other steps to transfer them to your intended beneficiaries.
Superannuation
For most Aussies, superannuation is the most notable non-estate asset we have. Your hard-earned retirement fund is held in a trust by your superannuation trustee, and governed by the fund’s trust deed and Commonwealth legislation.
In other words, super is not automatically covered by your Will.
Whether your super will pass to your estate or directly to a beneficiary depends on whether you have a valid nomination in place with your super fund, and what type it is.
For example:
- A binding death benefit nomination directs the trustee to pay your super to specific beneficiaries (such as a spouse, child, or your estate). Provided the nomination is validly made and not expired, it will override the trustee’s discretion and bind them to follow your directions.
- A non-binding nomination on the other hand is guiding but does not bind the trustee (a bit like a wish list). The trustee retains discretion over how the benefit is paid and to whom.
- A lapsing nomination expires after a set period of time – usually three years – unless you renew it before then. Unfortunately, many people are unaware their nomination has lapsed, or that it even has an expiry date – even if they made a binding one.
Outdated or absent nominations are big culprits for superannuation (inadvertently) passing in ways the deceased person never intended.
Jointly held property – automatic survivorship
Property you own jointly with another person will automatically pass by right of survivorship to the surviving owner, outside of your Will. Your Will cannot and does not deal with joint assets because they are not your sole personal property and so don’t form part of your estate. Unless you are the surviving joint owner, these non-estate assets are not available to the beneficiaries in your Will.
Life insurance with a nominated beneficiary
A life insurance policy with a valid beneficiary nomination pays directly to that person outside the estate. Only policies payable to the estate – or those where no valid nomination exists – are captured by the Will.
Family trust assets
Assets owned by a trust belong to that trust, not to you personally. Your Will cannot direct what happens to them. What matters instead is who controls the trust – usually this lies with the appointor (or principal) of the trust, who has power to change the trustee – and how that role is dealt with on death.
Overlooking the succession of a trust’s appointor is a common trap (and gap) in estate planning for families with trust structures.
Company assets
A company is a separate legal entity and assets owned by that company are not transferable by Will. What your Will may be able to deal with is your shares in the company – but it’s crucial to look at the whole structure, including the company’s constitution and any shareholders’ agreement, as these may affect how the shares can be dealt with or transferred on death.
Pension products and reversion
Some superannuation pension products have their own nomination or reversion mechanisms that operate independently of your estate and Will. The terms of each product need to be reviewed individually, to understand how they will flow (and to whom) after the product owner’s death.
Why does all of this matter?
The most well-intentioned person can have a carefully drafted Will and still leave behind an estate that distributes nothing like they planned to – because their greatest-value assets sat entirely outside the Will’s reach.
Common scenarios we encounter include:
- Superannuation nominations being made out to a non-eligible beneficiary, or old nominations that are never updated after circumstances change (e.g. marriage or divorce)
- A family trust falling into dispute because the appointor role was not addressed in the estate plan, and the wrong person gets control
- A family home passing by survivorship to a second-marriage spouse or partner, with children from first-marriage or partnership receiving nothing
Close the gaps before they become problems
Effective inheritance planning does not start and end with a Will, even if that is a central piece of the puzzle. A thorough estate plan maps out every asset, understands how each one is owned and able to be transferred, and then puts the right structures in place – nominations, trust deeds, ownership arrangements – to align your actual intentions. This comprehensive and rounded approach gives you a fighting chance at achieving the outcome you want for your loved ones.
At Solomon Hollett Lawyers, we take that whole-estate view. We help clients chart a complete picture of their estate, closing the gaps that are otherwise easily missed – to steer them towards the right course for the vision they have.
If you’re not certain your current arrangements cover the full picture, book a confidential consultation with our estate planning lawyers today.
Frequently asked questions on estate assets
What assets don’t form part of your estate in Australia?
Assets that typically sit outside your estate include superannuation, jointly owned property, life insurance with a named beneficiary, family trust assets, and company-owned assets. Each has its own transfer mechanism – and none of them are controlled by your Will.
Does superannuation go through your estate when you die?
Not automatically. Super is held in trust by your fund and paid according to your death benefit nomination. Without a valid, current nomination, the trustee has discretion over where it goes – which may not align with your wishes.
What happens to jointly owned property when one owner dies?
If property is held as joint tenants, it passes automatically to the surviving owner by right of survivorship. Your Will has no say over it, regardless of what it instructs.
What is a death benefit nomination and do I need one?
A death benefit nomination tells your super fund who should receive your super when you die. A binding nomination locks in your instructions; a non-binding one is advisory only. Many people don’t realise their nomination has lapsed or was never made – leaving the outcome entirely to the fund’s discretion.
What happens to a family trust when the appointor dies?
If the appointor role isn’t addressed in the estate plan, control of the trust can pass to the wrong person – or become disputed entirely. This is one of the most commonly overlooked gaps in estate planning for families with trust structures.
