Estate Planning Tips

Estate Planning Tips

The only certainties in life are death and taxes. Nobody likes to think that they will pass away eventually, but it is incumbent upon each and every person to plan for this event. The first and best way to plan for these certainties is by creating an estate plan.

Make a will – don’t pass away intestate as this can often result in unexpected and undesirable outcomes:

Without a will, assets will be distributed according to a statutory formula which varies from State to State. It can be possible to pass away with multiple spouses or dependants, even those that the deceased did not necessarily recognise. This can mean assets going to people for whom they were never intended. Not having a will can undo the best enacted financial estate planning strategies.

Identify all the assets and who controls them:

It is important to know what is available to distribute upon death before deciding who gets what. Most people have more assets than they think, only assets personally owned and control actually go to the deceased’s estate:
I. Personal assets controlled by the deceased flow to the estate and are controlled by the will.
II. Joint assets go to the survivor – they are not included in the estate.
III. Superannuation does not form part of deceased estate UNLESS there is a binding nomination specifying that the member death benefit should be paid to the estate, or the trustee uses their discretion to pay it to the estate.
IV. Family trusts – the Appointer with the power to appoint and remove the trustee.
V. Business assets and structures – may involve partners, their rights, their control, and combined money or value in the business.

Be realistic about what can and cannot be controlled:

It is often better to provide for someone rather than ignore them and trigger a challenge to the will. Being too general or too specific can cause problems. For example, use percentages for monetary bequests rather than absolute amounts. Beneficiaries’ lives, needs and wants change over time – it’s the best to try and cater for this with a well-crafted will.

A good will is about flexibility and minimising the potential for being challenged:

Not all future events can be foreseen – professional help and flexibility are key to being able to achieve intended outcomes. A good will can allow the executor the flexibility to deal with changes to individual situations within the parameters of the deceased’s wishes at the time. The estate and beneficiaries rarely benefit from challenges – it is a good idea to do everything possible to avoid them.

Things change between now, when the will is made, and later when it needs to be executed:

Review the will on a regular basis to ensure that it is still relevant to the circumstances. Think about the impact of decisions on children, grandchildren and other beneficiaries and keep the family appraised of any wishes.

Start estate planning now – don’t leave it to the last minute:

With enough time, legal and financial professionals can achieve many outcomes. With little time, options become very limited! Estate planning is a marriage between financial planning and the smooth operation of the will. They work together rather than separately, don’t leave your estate planning too late.

A will is nothing more than a delivery device. It is there to ensure that the deceased’s assets are delivered to desired recipients. A good will cannot replace good financial planning but, good financial planning can all be for nothing if there is not an appropriate will. The two must work hand-in-hand to ensure an optimal solution.

Give Lou a call on 041 416 8326 for any further estate planning tips and advice.


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