Most people with substantial property assume their will deals with it. Often it does not. A will only governs assets that form part of your estate, and a great deal of property wealth sits outside the estate entirely: jointly held land passes automatically to the survivor, trust assets are not owned by you at all, and superannuation is dealt with by the fund’s trustee under separate rules. Estate planning for a property owner means reading the title, the trust deed, the super nomination and the will as one document, because that is how they will operate.
How the title decides it
Start with how each property is held. Land held by two or more people as joint proprietors carries the right of survivorship: on the first death the survivor takes the whole, immediately and automatically, regardless of what the deceased’s will says. Land held as tenants in common is different, and each owner’s share passes under their own will.
This single distinction causes more unintended outcomes than anything else in estate planning. A parent who remarries, holds the home jointly with a new spouse, and leaves everything to their children by a previous marriage has, in substance, left the home to the new spouse, and the children get nothing from it. That may be the intention. Very often it is not. Checking how each title is actually held, rather than assuming, is the first task.
Property in a trust is not yours to leave
If an investment property is held by a family discretionary trust, you do not own it and you cannot leave it to anyone in your will. What you can pass on is control: the ability to appoint and remove the trustee, which generally sits with whoever holds the role of appointor or principal under the deed. Succession of that role is governed by the trust deed, and many older deeds deal with it poorly or not at all.
So the question for trust-held property is not who inherits the asset, but who ends up controlling the trust, and whether the deed lets you nominate that person. Where a family has several adult children and one trust holding the bulk of the property wealth, handing control to one of them without a plan for the others is a reliable source of litigation. The fix is usually some combination of amending the deed to provide for succession of the appointor role, splitting assets across trusts before death, and documenting the intention clearly.
Superannuation and the fund that holds property
Superannuation does not pass under your will unless it is directed to your estate. The trustee decides who receives a death benefit, subject to any binding death benefit nomination you have made and kept current. Where a self managed fund holds real property, the practical problem is liquidity: the fund may have to sell the property to pay a benefit, possibly at a bad time, unless the members have planned for the asset to be transferred in specie to a beneficiary who is entitled to receive it.
Fund control matters too. On the death of one of two members, the surviving member may end up controlling the fund and, through it, the property. If the members are a couple in a blended family, that outcome deserves thought well in advance.
Tax follows the asset, eventually
Australia has no estate duty, but capital gains tax does not disappear on death; it is generally deferred. A beneficiary who inherits a property usually inherits its cost base too, and the tax is paid when they eventually sell. The main residence has its own concessional treatment with time limits attached, which can make a real difference to beneficiaries who leave a family home sitting empty while they decide what to do with it.
Transfers of land arising from a will or on intestacy are generally treated differently from ordinary dutiable transfers, but transfers that depart from the will, such as a deed of family arrangement redistributing assets between beneficiaries, may not be. Because these rules and the relevant thresholds change, confirm the current position with the State Revenue Office and your accountant rather than relying on general statements.
The practical review
A useful property-focused estate planning review covers a defined list:
- A schedule of every property, how each title is held, and which entity owns it.
- For each trust, who the trustee and appointor are, and what the deed says about succession of those roles.
- For each fund, who controls it after a death, what nominations are in place, and whether they are still valid.
- Whether any property is subject to a mortgage, and which assets will service or discharge it after death.
- Whether anyone has a moral or legal claim likely to lead to a family provision application, and whether the plan addresses it or ignores it.
- Powers of attorney, so that if you lose capacity someone can actually deal with the properties, deal with a lender and sign a contract.
That last point is routinely neglected and causes immediate practical paralysis. A will takes effect on death; incapacity can arrive decades earlier, and without an enduring power of attorney the family may need to apply to a tribunal before anyone can pay a rates notice or renew a lease.
We advise property owners on wills, structures and succession across Melbourne, working with your accountant where structures are involved, with pricing disclosed before you engage us and no surprises. Book a free first consultation, or read about our wills and estate planning work. Our notes on dying without a will in Victoria and getting the ownership right when you buy cover the two ends of the same problem.
Frequently asked questions
Does my will control a property I own jointly with someone else?
Generally no. Where land is held as joint proprietors, the right of survivorship means the surviving owner takes the whole property automatically on the first death, outside the estate and regardless of the will. Only property held as tenants in common passes under a will. If you want your share to go to someone other than the co-owner, the way you hold the title may need to change.
Can I leave a property that my family trust owns?
No, because you do not own it. The trust does. What you can plan for is who controls the trust after your death, which usually depends on who succeeds to the appointor or principal role under the trust deed. Many older deeds are silent or unclear on this, so the deed often needs to be reviewed and sometimes amended as part of the estate plan.
Why do I need a power of attorney if I already have a will?
Because they do different jobs at different times. A will only operates on death. An enduring power of attorney operates if you lose capacity while alive, and without one nobody can deal with your properties, your lender or your tenants without applying to a tribunal for authority. For anyone holding multiple properties or running property through a structure, it is as important as the will itself.