Estate Planning is not a subject many people like to think about, but the fact is, it’s important to understand, not only for your peace of mind, but to ensure that your loved ones are spared the legal complexities that could arise if your intentions are not made clear.

Many people consider Estate Planning to be just about having a will. It’s much more.

It’s about reviewing your financial and personal circumstances and planning your affairs to enable the distribution of your assets in accordance with your wishes.

You may be thinking that you don’t have enough assets to warrant an Estate Plan. But think again. Estate Planning is essential for everyone, no matter what your wealth level or the amount of assets you have.

Having an up-to-date Estate Plan will ensure as much as possible that:

  • Your Assets pass to the intended beneficiaries;
  • Any bequests you make to Charities are honoured;
  • The chances of any challenges to your Will and therefore your Estate are reduced.
  • Taxation consequences to your beneficiaries have been considered particularly any benefits that might be paid to your beneficiaries from a Superannuation fund.
  • You will avoid the many complexities to dying intestate i.e. without leaving a Will.
  • You will have considered the use of a Testamentary Trust to protect any minor, vulnerable or incapacitated beneficiaries that need ongoing care.

Developing an Estate Plan

Here are some points to consider:

  • Will: Ensure that you have a valid and up to date Will. Your solicitor should generally hold the original Will and your Executor should also be notified of it’s location. If you do not have a Will, your assets will potentially be distributed according to the intestacy laws of your state. This could mean that your assets might not go the right person. It’s a good idea to revisit your plan every 12 months or when a key life trigger occurs. For example, the birth of a child, a divorce or remarriage; or in the event of an illness or terminal medical condition.
  • Taxation: Your beneficiaries may end up with significant taxation obligations as a consequence of their inheritance and the way in which it is distributed to them. A well thought out Estate Plan will consider alternate ways to minimise the incidence of taxation.
  • Superannuation Benefits: Consider a Binding Death Benefit nomination or non-lapsing Death Benefit nomination for the payment of these benefits. This a written nomination made to your fund Trustees to ensurethat your death benefits – which include your total superannuation balance and any life insurance held in the fund – is paid out according to your wishes.
  • Power of Attorney: Your Attorney will act on your behalf up until you pass or if you become incapacitated and are incapable of managing your own affairs – in other words, during your lifetime.
  • Enduring Guardianship; An Enduring Guardian is someone that will make health and lifestyle decisions for you when you can’t do this for yourself.

Estate Planning in today’s world can involve not only your solicitor but your accountant, financial planner, insurance broker and banker.  It’s important that these people work together as a team, to ensure your Estate assets and liabilities are properly identified and dealt with in accordance with your wishes.

Your solicitor’s role is to prepare all legal documentation for your Estate Plan, as well as to help with the administration of your Estate after death. We, as accountants, will work with your solicitor and the team to supply all the necessary information regarding your financial structures, financial accounts, income tax information, taxation compliance and advisory.

Should you not have a solicitor, or you don’t believe your “everyday” solicitor is not equipped to undertake the Estate work, we would be happy to recommend a legal firm with which we have strategic alliances to advise you. We would then work very closely with this firm or the solicitor of your choice to ensure that you achieve a fully considered Estate Plan.

In summary, Estate Planning ensures your wealth is managed and transferred according to your wishes in the most effective way. It’s about planning ahead to give you peace of mind, knowing that your wishes will be carried out.

To find out more, contact Fred Scali here.