When creating a Will, one important consideration is ensuring that your assets are distributed according to your wishes, especially if unexpected circumstances arise.
When making your Will, you will nominate beneficiaries to inherit your assets upon your death. However, what happens should a named beneficiary have predeceased you? This is where a “gift over” provision comes into play. It is a vital element of estate planning that provides a backup plan in case a beneficiary is unable to receive their intended inheritance. By providing an alternative or substitute beneficiary, the Will provides a safety net, ensuring that your assets goes to the right person or entity under various scenarios.
Why is it Important?
The primary purpose of a gift over provision is to address uncertainties that could affect the distribution of assets.
For example, if a named beneficiary:
- dies before the willmaker; or
- is legally incapable of receiving the inheritance; or
- dies within 30 days of the willmaker,
the gift over provision ensures that the assets do not remain unclaimed or subject to intestacy laws and are distributed to your alternative or substitute beneficiary named.
Example of a Gift Over Provision
“I give my jewellery to my daughter Amy Smith provided that should she not survive me obtain a vested interest, then to my granddaughter Lisa Smith.”
In her Will, Samantha has left her jewellery to her daughter Amy however, she has included a gift over provision to ensure that if Amy were to pass away before her, her jewellery would be distributed to her granddaughter Lisa.
Types of Gift Over Provisions
Gift over provisions can be set up in various ways depending on specific circumstances and preferences. They may be contingent upon events like the death of the primary beneficiary, the beneficiary not reaching a certain age, or any other conditions named by the willmaker.
Considerations for Including a Gift Over Provision
By including the necessary gift over provisions in your Will, you can ensure that your assets are distributed according to your wishes and that your loved ones are taken care of. By adding flexibility and security to your Will, even in unforeseen circumstances, there is peace of mind knowing that your estate is preserved and your loved ones are provided for as you intended.
How can Nevett Ford help?
A gift over provision is a valuable tool in estate planning and one which our Wills and Estate Team are well versed in and will discuss with you when making your Will. For more information, please contact us on 03 9614 7111 or by email at melbourne@nevettford.com.au.