Estate Planning

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Estate Planning as part of your overall financial plan

  • Estate planning requires more than a tax effective Will, especially if you own or partially own entities that are not in your name.
  • Creating a Will is the first step in expressing your wishes as to how your assets will be distributed and to whom. A strong Will is explicit and deals with beneficiaries fairly.
  • Don’t assume that your superannuation is covered by your Will. Be explicit about who the beneficiaries of your superannuation will be.
  • We cannot draw a Will for you, but we can align you with legal professionals who can. What we can do for you is to arrange all your entities in the most tax effective way both for now and for when your beneficiaries need to take over.

What is Estate Planning?

Strong estate planning is about more than just having a Will. Whilst your Will might be drafted with some tax effective strategies in mind for your personal assets, how joint assets, trust assets and superannuation are dealt with may not be covered in the Will. This particularly applies if the entities are not in your personal name.

Leaving your beneficiaries with the task of wading through the complicated arrangements, whilst also grieving their loss is not the kind of legacy that you want to leave.

In the legal world, assets such as those mentioned above are more commonly thought of as ’non-estate’ assets when it comes to estate planning, but they are just as important to plan for as the family home. Importantly, you need advice to find out how your wealth should be held to get the most financial benefit from it now and how it will pass to the next generation when you are no longer around to make decisions about it yourself.

Therefore it is essential to undertake detailed estate planning to ensure all assets are dealt with in accordance with your requests and in the most beneficial way possible for your successors. The following items are crucial parts to consider when planning for your estate.

Your Will

If you pass away and you either do not possess a Will or you possess a Will which is invalid, this is what is called dying ‘intestate’. If something like this happens, there are laws specific to each State and Territory which decide how your estate will be handled. As a result, your estate could be dealt with in an inefficient way and your assets could end up being distributed in a manner which is contrary to your preference. Unfortunately, it may also result in unwanted tax liabilities for the beneficiaries.

It is a common misunderstanding that your personal Will deals with the entirety of your assets, so careful planning is needed to include these in your total estate. How your assets are organised and in which entities your assets would provide the most financial benefit is a conversation for your financial advisor. From there, your financial advisor can provide a detailed report of your assets for your legal counsel to create a rock solid Will that covers all your assets.

It is a common misunderstanding that your personal Will deals with the entirety of your assets, so careful planning is needed to include these in your total estate.

Your superannuation

As a general rule, your superannuation is an asset which is usually kept out of your Will. If you have not made arrangements to establish a valid beneficiary nominee at the time of your death, any benefit which is paid as a result of your passing is given out by the superannuation trustee in alignment with the Trust Deed. As a result, the trustee is usually attributed the discretion to decide exactly who ought to inherit your superannuation benefits.

In which fund your superannuation is held is a consideration, especially for ease of allocating to beneficiaries after you die. Not all superannuation funds are made the same and your financial advisor can advise you on the best funds in which to hold your retirement fund.

Testamentary trusts

A testamentary trust is one constructed in accordance with your Will and might carry with it several significant benefits. There are a variety of different types of testamentary trusts, inclusive of discretionary trusts and special disability trusts.

Your legal counsel might recommend a testamentary trust if:

  • the beneficiaries are minors, as there is a concessional tax treatment available;
  • there is a chance that the inheritance may be eroded by claims on the beneficiaries by future partners or creditors; or
  • protecting the inheritance from claims on beneficiaries from future partners or creditors and wasteful or spendthrift beneficiaries.

The structure and conditions of a testamentary trust can be found in the Will. As with a large number of trusts, a testamentary trust under normal circumstances allows the trustee the discretion to assign income and capital to one or more of your specified beneficiaries, broad freedom of investment, and the ability to wind up the trust at a specified time.

It is essential to undertake detailed estate planning to ensure all assets are dealt with in accordance with your requests and in the safest, simplest, and speediest way possible.

Engaging a Professional

Estate planning must be based on individual circumstances and no two Wills are the same. The most important thing to remember is that engaging a professional to advise you on where to ascribe ownership of your assets and therefore, how to deal with them in your Will, is of paramount importance. For more information about how we can help you organise your assets ready for estate planning and how we can assist you with the succession of your business, call us today.

Financial Services

Our services include:

  • Values-based financial planning.
  • Wealth accumulation strategies.
  • Tax-effective strategies.
  • Risk management.
  • Retirement planning.
  • Estate planning.
  • Divorce financial settlement analysis.

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