This is a very easy question to answer – NO, Estate Planning is for everyone.
A good Estate Plan requires the involvement of skilled Legal, Accounting and Financial specialists, to ensure that your hard-earned assets end up in the right hands at the right time.
Estate Planning does not just mean you have to have a valid Will, although that is a very important aspect. Estate Planning should cover all of the following areas:
- Wills and Powers of Attorney
- Superannuation and Life Insurance Beneficiary Nominations and Types
- Ownership structure of Assets
- Taxation Planning
- Consideration of Trusts including Testamentary Trusts
- Life Insurance
Did you know?
- That assets held in joint names automatically pass to the other owner upon death without passing through your Estate? (e.g. your house and joint bank accounts) So there may be no point in putting them into your Will.
- That superannuation benefits with valid binding nominations to a dependent can also bypass your Estate? (Which means there may also be no point in putting them into your Will)
- That a non-binding superannuation nomination may be able to be challenged by people who think that they are entitled to your super benefits? (After you are gone and not able to give the real story)
- That Life Insurance proceeds in Superannuation may have tax payable of 30% (plus Medicare levy) if received by a non-dependent beneficiary (such as an adult child) but are paid tax free to dependents?
- That a Testamentary Trust may assist in preventing assets from going to that son or daughter-in-law that you don’t like?
- That leaving two properties worth the same amount to two different children may have vastly different values when sold once Capital Gains Tax is applied?
- That if you do not have a Will your Estate is usually much harder to manage by your loved ones you have left behind?
- That if you become disabled and do not have a Power of Attorney then the courts who don’t know you may decide who is in charge of you and your Assets?
- That many people do not have enough Life Insurance to support their families in the event of their premature death?
It’s not hard to do Estate Planning
- A solicitor can assist you to set up Wills (with a Testamentary Trust if required) and Powers of Attorney as well as general Estate Planning advice.
- An Accountant can assist you with tax planning, trusts and asset ownership to ensure your beneficiaries maximise any benefits they are entitled to.
- A Financial Adviser can assist you to ensure your Superannuation, Beneficiary Nominations, Life Insurance and Ownership structures are appropriate. They can assist you to set your finances up correctly, and ensure that everything is structured in accordance with your Will. They can also work with your Accountant and Solicitor to assist you to get it right and to make changes if your circumstances change in the future.
It won’t happen to me!
Maybe not, but is maybe good enough for your spouse and children?
My wife/husband will get everything anyway.
Probably. But it will take longer to sort out and could cost more. So is probably really good enough?
If I make a Will I will die.
Definitely at some stage, but no sooner than without a Will. If you don’t make a Will you will still die sometime, and your family will have to sort out your Estate without the benefit of your forward planning.
I don’t want to think about it.
Of course you don’t, but neither does your family when you are not around, and they will have to think much harder and longer about it (while they are grieving) if you don’t have a valid Will.
I can’t afford it.
You can’t afford not to. And it probably doesn’t cost as much as you think. It may cost much more to manage your Estate without Estate Planning, and proper planning will often save tax and legal fees.
I made a Will 20 years ago.
Did you? Well done! Time to check with your Solicitor that it is still valid, current and that you don’t need to change anything. Did you establish Powers of Attorney, complete beneficiary nominations, and do tax planning then as well?
I have seen many examples of Estate Planning strategies where people think they have it right, however without advice ensuring it is correct, their wishes may not actually be met. Once you are gone, it is too late to change it. Check your overall position now, and seek advice to get it right!
Adv Dip FS (FP)
Insider Out – Understand and Trust your Advice
0400 533 865
This information may be regarded as general. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.
I am no longer authorised to provide financial advice. If you wish to receive financial advice you must contact an authorised provider.