The starting point for farm estate planning is to determine:-
- whether assets are owned solely or jointly,
- whether land is owned as joint tenants or tenants in common, and
- whether assets are controlled via trusts rather than owned.
Sole or joint ownership? For most assets (shares, bank accounts, chattels – but not land), joint ownership usually means that the survivor automatically inherits when the first co-owner dies.
Co-ownership of land – joint tenants or tenants in common? When the first co-owner dies, land owned as joint tenants must automatically go to the surviving co-owner/s, whereas land owned as tenants in common forms part of the co-owner’s estate, and can be gifted in their Will. Determining whether co-owned land is owned jointly or as tenants in common can be achieved from purchase documents, or by conducting a title search.
Assets in a trust Assets in a trust are controlled but not owned, which means they cannot be gifted in a Will. Instead, understanding how the trust is controlled, and transferring control to your intended beneficiaries, is usually the best option. Trusts will be discussed in detail in a future article.
Next steps? W have a useful template to assist you to categorise asset ownership which you can find on our website – Ownership Template
This is the second in a series of 6 articles on farm succession planning that aim to help you start the process to ensure an efficient transition of your wealth to your intended beneficiaries.
If you have any questions or if you would like to start the planning process, contact Trent McGregor today in Bendigo on 5434 6666 or Castlemaine on 5472 1588.
Wills & Estate Planning Lawyer