No one likes to think of death, especially their own estate plan. It’s not exactly a great conversation starter.
This might explain why so many people end up “dying intestate”, which means they die without a will and, so, have their assets distributed according to State Law.
Sadly, the way the State distributes a deceased person’s assets among family members can often be very different from the way the deceased person wanted their assets distributed. It can create a lot of unnecessary stress and conflict within a family.
Unless you’re living as a hermit with no contact or relationships with others, and you also don’t have a single possession to your name, you need to not only think about preparing a will but do something about it, NOW.
And you need more than just a will. You need an estate plan.
Why having a will is not enough.
If you have a will in place, which spells out your “who gets what” instructions, you probably think you don’t even need an estate plan. Unfortunately, the estate you’ve specified in your will may not include all of your assets. By law, your will won’t include assets such as:
- jointly-held property
- superannuation
- proceeds of life insurance policies
- assets held in trust
- company assets.
To control what happens to these assets, you need an estate plan.
6 more reasons to have an estate plan.
A well-written estate plan can do more than just distribute all of your assets the way you want. It can also help:
- Your beneficiaries (i.e., your loved ones) to reduce (if not eliminate) tax on the income generated when they receive their inheritance, and every year thereafter;
- Protect your beneficiaries’ inheritance from unfortunate events such as divorce and bankruptcy;
- Minimize or even avoid the death benefits tax when distributing your superannuation benefits;
- Guard against a beneficiary wasting their inheritance because of their spending habits, mental health, drug addictions, gambling, or other vulnerabilities;
- Make capital gains tax savings on the assets distributed through your estate;
- Ensure your assets are passed to your preferred beneficiaries rather than, say, an in-law or former spouse.
Who should help you create your estate plan?
While an estate plan is a legal document, its creation shouldn’t be left solely to your solicitor. You need someone who knows about you, your family, and your financial situation.
And the person who generally knows the most about that is your accountant or financial planner.
However, while they may know all about your finances, they may not have the legal qualifications needed to create a watertight estate plan. The best solution is to involve a team of experts – your accountant, financial planner, and your solicitor.
“The financial planner’s job is to try and identify if the estate plan is funded properly, and if it is funded that the insurance is owned by the right person; the accountant’s job is to make sure that the client’s affairs are structured appropriately from a tax point of view, and the solicitor’s job is to make sure the documentation is all drawn up.”
One Super Fund partner, Gerard Wall.
Avoid leaving a trail of chaos behind you.
Whether or not you have an active will in place, without an estate plan there’s no telling who your assets may end up with. Avoid creating stress and conflict for your loved ones and give yourself the peace of mind in the here-and-now that your affairs are well in order.
Get in touch with MBC on 6362 0988 and we can start the ball rolling to get a solid estate plan in place for you and your family.
