8 Estate Planning Essentials

Death may be considered final by some, but the complex affairs that must be attended to after a person’s death is far from final and may cause ongoing personal and legal complications.  These eight essentials of estate planning will assist you to effectively ensure that your wishes will be met if you become incapacitated or die.

1. Maintain an Up To Date Legal Will

If you die without a will (intestate), your assets will be disbursed according to a legislative formula that may not be according to your wishes.  A legally binding will allows you to specify your wishes, for the most part of your estate. Update your will regularly to ensure there are no uncertainties of your intentions and remember to let others know where to locate your will.

2. Review Joint Ownership of All Property and Assets

If you own property or assets jointly with another person, including bank accounts, review the ownership legalities of each jointly held property or asset to ensure they are not inadvertently transferred to someone against your wishes.  The two most common joint ownerships are “Tenants In Common” where if one of you dies, your share goes to your estate and is dealt with according to your Will and “Joint Ownership With Rights of Survivorship” where if one of you dies, the other inherits the property.

3. Determine Your Business Interests

Your stake in any company, as a separate legal entity, does not form part of your estate and full consideration must be given to the legal distribution or sale of your company interests for estate planning.

4. Assign an Executor

An Executor will administer your estate, which includes the reading of the Will, paying funeral costs, submitting the estate’s tax returns, paying creditors and the sale, transfer and distribution of the estate’s assets according to the Will.  Before nominating your Executor, be certain they will be able to manage the tasks you require of them.

5. Nominate Your Superannuation Beneficiaries

To ensure your superannuation fund is paid out upon death to the beneficiaries you want it paid to, you can make a Binding Death Benefit Nomination with your superannuation fund/s and stipulate their percentage share.  Superannuation funds are bound by law to pay your accumulation as defined.  It is very important though to ensure you submit a new Binding Death Benefit Nomination form if any personal circumstances change, as it is a lifetime nomination and supersedes your Will.

6. Assign a Power of Attorney

It is important to consider who has the legal right to make your health care and financial decisions, should you not be capable of doing so.  There are three types of Power of Attorney, you need to consider:

• Power of Attorney for Health Care (or Health Care Proxy), where you legally nominate someone as the person authorised to make your health care decisions if you cannot make them for yourself;

• Power of Attorney for Financial Matters where you legally nominate someone as the person authorised to manage your financial affairs should you be determined incapable of doing so; and

• Power of Attorney for Guardianship ensures a legally nominated guardian is appointed and provisions can be made for the child/ren and guidance can be stipulated for their future upbringing.

7. Tax Planning

The types of assets, how your structure your estate and the distribution of your estate, will impact the tax liability on your estate or your beneficiaries. 

8. Establish a Trust

The establishment of a trust, will allow you to tax effectively plan for the distribution of your estate and protect the estate from will contestation and enable you to provide income streams for beneficiaries rather than lump sum inheritances.

Personal situations where special consideration is required:

• If you are separated, divorced, living in a de-facto relationship, re-partnered or remarried, or have a blended family and if you have children or others who are still dependent on you

• If you have business interests and associated business assets

• If you have significant assets requiring significant consideration

• If any of your assets are jointly owned, yet legally ascribable to the other joint owner

Want balance in your life, ensuring you have the right amount of everything?  Share your hopes and dreams.  Plan your future and let me help you make sure you have peace of mind along the way.

Glen Hatcher
Financial Adviser
New Vision Financial Services

Plan your future and let us help you have peace of mind along the way.