It’s all about your peace of mind
Estate planning
Nobody knows what’s around the corner.
That’s why the best time to think about planning your estate is right now. While writing a Will is an essential part of the process, there’s so much more to estate planning that can ensure your wishes will be fulfilled exactly the way you want. A little planning today can make a big difference to your family’s tomorrow.
Estate planning is different for every person, but every plan has the same goal: peace of mind. With a proper estate plan in place, you can be confident that should you die or become unable to manage youraffairs, you have everything in order. Your plan may cover your own life care instructions as well as how your assets will be managed and, ultimately, distributed according to your wishes in the most efficient and tax-effective way.
While the structure of an estate plan will vary according to personal circumstances, assets and wishes, the process offers a range of tools to help you manage your affairs. Tools such as Wills, Powers of Attorney, insurance policies and trusts can help ensure your affairs are managed the way you would like.
Make sure your decisions are
the ones that count
Estate planning will ensure you have peace of mind knowing that:
• Your loved ones, including children, are provided for and protected.
• Your children’s inheritance receives increased protection if a relationship breaks down.
• You have received professional advice on how to structure your assets to optimise tax advantages.
• Your wishes are recorded in legally-binding documents, free from ambiguity.
• Your affairs will be managed by someone you trust when you die or are no longer able to legally manage your affairs.
There’s no time like the present
The best time to think about your estate plan is right now. If something unexpected was to happen to you and you don’t have an estate plan in place, your estate and your loved ones could be faced with legal disadvantages and extra costs. Not to mention added stress at an already difficult time.
You should also keep in mind that your estate plan can keep evolving as your life does. Certain life events such as marriage, divorce or the birth of a child should prompt the need for estate planning advice or a review of your existing plan.
Where there’s a Will...
Generally, your Will forms the basis of your estate plan. This essential document spells out your wishes for the distribution of your assets to your beneficiaries. It also allows you to:
• choose your executor
• appoint a guardian for any minor children
• establish a trust to transfer your assets tax effectively
• make specific gifts to charities
• establish a trust for minor children or another purpose.
Without a legally valid Will, known as “dying intestate”, you risk your estate being distributed according to strict legislative requirements. If you don’t make your wishes clear, a government-appointed executor could be left to decide who benefits from your estate.
An intestate estate is more difficult to administer and will take longer to be finalised, potentially resulting in increased costs and increased stress for your loved ones.
Choosing a trusted executor
An important part of writing your Will is appointing an executor. Your executor is responsible for carrying out your wishes for the entire administration of your estate, from funeral arrangements to the ongoing management of assets until the estate is completed.
Your executor - or executors - can be a family member, a trusted friend or professional, or a nominated trustee company. Their responsibilities may include:
• Confirming your Will is legally valid and, in some States, obtaining a grant of probate.
• Preparing a statement of your assets and liabilities - what you own and what you owe.
• Advising beneficiaries of their entitlements.
• Lodging tax returns, if required.
• Managing and protecting your assets prior to distribution. For example, superannuation, insurance, safekeeping of valuables and re-investment of surplus funds.
• Establishing trusts.
• Making payments or distributing assets to beneficiaries.
Enduring Power of Attorney
Keeping things on track when you can’t
An Enduring Power of Attorney is a key part of your estate planning. If you are no longer able to manage your own affairs due to an accident, illness or the loss of mental capacity, this legal document will ensure that someone you trust can step in when needed. In much the same way as nominating an executor, you can appoint trusted family members, friends or a professional trustee to act as your Attorney.
Prepared by a solicitor, an Enduring power of Attorney can prevent potential government intervention in your personal affairs, management of your assets and even your own medical care.
A trust could help preserve everything
you’ve worked for
Apart from distributing assets through your Will, you can also choose to distribute assets via trust. A trust is a legal structure used to hold assets that can be owned in the name of an individual, family or business. Trusts generally exist to protect those assets and minimise tax with specific rules and instructions detailed in a trust deed, which is prepared by your solicitor.
There are several types of trusts that may be a useful vehicle in your estate plan if you want to:
• pass on a family business
• make a gift to charity
• be flexible in distributing your assets for tax purposes
• protect and manage assets until beneficiaries reach a certain age.
The types of trusts that could work for you
Inter vivos trusts
This type of trust is created between living people such as your spouse or family members. Once the trust is established, the assets in the trust do not form part of your personal estate.
Children’s trusts
These are generally established in Wills and allow for assets to be managed by the trustees until children reach the age of 18 or older according to your wishes.
Testamentary trusts
Also created by a Will, testamentary trusts give trustees the discretion to split the income between beneficiaries for a period of time.
Although future changes in taxation laws may have an impact on these trusts, they are currently tax effective as the trustee can vary the income paid depending on their other tax liabilities.
Family trusts
Multiple super funds could mean multiple sets of fees. By consolidating them into one fund, you may find that more of your money will stay invested for your future.
Charitable trusts
If you wish to leave a legacy to your favoured cause, a charitable trust can be established through your Will or during your lifetime, which may also provide you with tax-effective benefits.
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Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit License No. 236523. This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission.
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