Estate Planning

Many people believe that a will and estate planning are the same thing. While it’s true that a will is the primary component of an estate plan, there’s a lot more to it.

A will is a legal document detailing where your assets will go after you die. It can also lay out your wishes when it comes to how your children will be cared for after your death. A will forms part of your estate plan. 

An estate plan is a broader plan of action for how your assets will be preserved, managed and distributed. It may apply during your life as well as after your death. 

Having an estate plan ensures your wealth will be distributed as per your desires, in the best possible tax-effective and financially efficient way.

Did you know your superannuation assets and insurance are not included in your will?

This is because your superannuation isn't considered as one of your assets. Rather, this money is held in a trust and is managed by the trustee of your superannuation fund.  Only the trustee can distribute the money in your account.

Your estate plan will allow you to choose whether your superannuation and insurance will be included in your estate.

Other assets that could make up your estate include:

·         Houses

·         Cars

·         Stocks

·         Artwork

·         Jewellery

·         Insurance

·         Pensions

·         Any debt

There are many different documents involved in the estate planning process. Usually, an estate plan will include your:

·        Will

·        Enduring Power of Attorney

·        Enduring Power of Guardianship

·        Advanced Health Directive

·        Superannuation Beneficiary Nomination

But there are a range of other documents that may be included, particularly if you have non-estate assets such as companies or family trusts to consider.

However, without a structured plan in place, the use of estate planning documents alone won’t deliver the most efficient and effective outcome for your loved ones. That’s why we recommend putting a formal plan in place.

The price for putting in place your estate plan will depend upon your individual needs and circumstances, but we aim to make the process as affordable as possible for you. Just ask us if you want to know our estimate of how much your estate plan will cost.

The main takeaway is that while the upfront professional fees for an appropriate estate plan will be higher than doing it yourself, (or doing nothing), the estate administration process and unintended taxation consequences that can arise after your death can be significantly higher.

It’s recommended you review your estate planning documents every few years. However, if you experience a “trigger event”, we recommend a more urgent re-evaluation. Trigger events may include:

·        A change in your relationships, (new marriage or de-facto relationship, new child or child reaching adulthood, separation/divorce, beneficiary developing a vulnerability, a change of relationship with a beneficiary, executor or attorney

·        A change in your financial circumstances, (bankruptcy, receiving a windfall gain such as an inheritance, acquisition/disposal of large assets, establishment or winding up of a SMSF or family trust, major change in asset values or acquiring overseas assets

·        A change in your personal circumstances, (relocating to a new state/country, retiring, commencing a new role where asset protection becomes more important or acquiring new care responsibilities for another person)

·                 A change in legislation, (treatment of foreign beneficiaries for tax purposes, validity of superannuation death benefit nomination

The earlier the better! Estate planning can be a complex process and there could be legal and tax implications if you don’t set things up correctly and understand the fine print.

Taking the time needed now, will ensure in the future, your estate will end up exactly where it is intended, by you, and that no unnecessary costs will be incurred.