While no one wants to think about the uncomfortable subject of death or losing capacity, it is important to consider what happens in either of these events. An appropriately administered estate plan will ensure that relevant assets go to the relevant people at the right time, in a productive and tax-effective way. It can also ensure that if you’re unable to make important decisions (both financial and lifestyle) for yourself, the appropriate person is able to intercede and make these decisions on your behalf.
In this post we will outline the key strategies and tools you can use to attain your estate planning objectives at a high level, ready for a deep dive on the respective strategies in future posts.
Where do I start?
Before you begin planning your estate, it’s important to consider how different assets are regarded and the options open to you. Directing assets to the right people after you pass away is not always as easy as expressing your wishes in your will. How your property is distributed may depend on a number of factors, including how your assets are owned, the terms in your will, and which State or Territory legislation applies to your assets.
Many are uncertain about how and where to start when estate planning. Pekada is on hand to quell any concerns you may have about going through the process. We can also help you in ensuring that any future investments you make are structured in a way that is consistent with your estate planning preferences and objectives. The estate planning process can be summarised as:
Prepare a Will
A will comes into effect after you die. It may detail how you wish your assets to be divided, any trusts you want set up, who you nominate to take care of your underage children, even your own funeral arrangements.
You may want to consider having a provision for a testamentary trust created after your death. This could provide some benefits, such as tax planning opportunities and asset protection.
While you may write your own will if you want, it is suggested to have a solicitor or public trustee review the document to make sure everything is in order. Also, if a will remains unsigned or isn’t adequately witnessed, it may be considered invalid.
If you die without a valid will, your estate assets will be distributed by a Court appointed administrator, according to the intestacy laws. While the intestacy laws vary between the different States and Territories in Australia, they generally only cater for certain family members, in strict proportions, and are unlikely to reflect your wishes.
Execute a Power of Attorney
Executing a ‘Power of Attorney’ means legally granting a person the authority to sign documents, make decisions and look after affairs on your behalf.
There are several types of Powers of Attorney –
You may be able to choose for the Power of Attorney to be effective from the time you execute the document until formally rescind it, or alternatively only to come into effect in specific circumstances (eg. loss of capacity).
Make superannuation death benefit nominations
Superannuation is a non-estate asset that isn’t part of your will. Most super funds allow you to nominate someone to receive your death benefit in the event of your death. If you do not have a nomination in place, then the super fund trustee decides who should receive your super benefits.
To avoid the super fund trustee having sole discretion, you may set up beneficiary nominations –
Even if you intend to send your superannuation benefits to a specific beneficiary, it’s important to establish a contingency in the event your superannuation is directed to your estate.
Below is a useful checklist for estate planning issues to discuss with your financial adviser, solicitor and registered tax agent.
To find out more or if you have any questions relating to Estate Planning, please don’t hesitate in contacting firstname.lastname@example.org.
Principal Adviser | Pekada
Wealth Collective trading as Pekada (ABN 95 624 612 684), corporate authorised representative (CAR), number 1263725, is authorised to provide financial services on behalf of Communitas Wealth Pty Ltd.
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