2024 Wrap Up - Estate planning trends
As 2024 comes to a close, several key trends have emerged in estate planning and administration. These trends highlight the evolving legal landscape and reflect changing priorities among families and individuals seeking to secure their legacy. Below are some of the most prominent estate planning trends observed this year.
1. Right to Reside Clauses
Right to reside clauses have gained significant popularity throughout 2024. These clauses allow a designated person—such as a spouse, de facto partner, or child—to live in a property for a specified period or until their passing, provided they cover maintenance and living costs.
This approach has been particularly common among:
Parents with adult children living in the family home.
Couples where one partner owns the home and the other does not.
These clauses offer a practical solution to provide stability for loved ones without transferring ownership of the property. Incorporating such a provision into an estate plan can address specific family circumstances and ensure long-term security for the individuals involved.
2. Testamentary Trust Wills for Relationship Protection
This year, testamentary trusts have become a favored strategy for protecting children’s inheritance from potential relationship breakdowns. By excluding children’s spouses as beneficiaries, these trusts safeguard assets from being divided in family court proceedings and ensure that grandchildren remain the ultimate beneficiaries.
Testamentary trusts also offer several additional benefits, including:
Tax advantages for beneficiaries.
Enhanced protection from bankruptcy or other legal claims.
Flexibility to adapt to changing family dynamics.
These trusts are an effective tool for preserving generational wealth while providing peace of mind for parents concerned about their children’s financial security.
3. Guardianship Funds for Minor Children
With the rising cost of living, guardianship funds have emerged as an innovative solution to support guardians who take on the care of minor children after a parent’s passing.
These funds provide financial support to cover expenses such as:
Upgrading vehicles to accommodate additional children.
Renovating or relocating homes to create a suitable living environment.
Making lifestyle adjustments to provide the best care for the children.
This arrangement helps alleviate the financial burden on guardians while ensuring the children’s needs remain the priority.
4. Managing Foreign Assets
Foreign assets have increasingly complicated estate planning and administration in 2024. These assets, which range from overseas properties to shares, pensions, and potential inheritances, often come with unique legal and administrative challenges.
Key complexities include:
Variations in inheritance laws across countries, particularly in Europe.
Tax implications for estates and beneficiaries.
Administrative hurdles, such as obtaining legal advice in the relevant jurisdiction.
While Australian wills can cover foreign assets, it is often advisable to create a separate will in the jurisdiction where the asset is located. Proper planning ensures compliance with local laws and avoids unnecessary complications for executors.
Looking Ahead to 2025
The trends observed in 2024 provide valuable insight into the evolving priorities of individuals and families. With increased focus on protecting assets, providing for loved ones, and navigating complex legal landscapes, estate planning continues to adapt to meet these challenges.
As we approach 2025, it’s an excellent time to review your estate plan, ensure it reflects your current circumstances, and incorporate strategies that align with your goals.
Take Action on Your Estate Plan
If these trends have raised questions or inspired you to revisit your estate plan, now is the time to act. Whether it involves updating a will, setting up a testamentary trust, or addressing foreign assets, professional advice can make all the difference.
Book an appointment on our website or email lidia@viccalaw.com.au to get started. Secure your legacy and ensure your loved ones are protected as we move into the new year.