Where there’s a will, there must be planning
YOU spend a large part of your life working to earn money to look after yourself and your family and to save for the future.
Given the emphasis placed on creating wealth over your lifetime, it seems logical to have a plan for how your wealth is distributed when you are gone.
Unfortunately, many people neglect this important part of their financial planning.
Estate planning is about giving you the control to decide what happens to your assets when you die — rather than leaving it for someone else to make the decision for you. Lack of planning may result in your intended beneficiaries missing out.
The more complicated your personal and financial affairs are, the more important it is to have a well thought-out estate plan. For those with blended families, business partners, family members with special needs to name a few scenarios it is essential.
The three main areas to address in your succession planning are: A WILL (may include a testamentary trust); POWERS of attorney; and SUPERANNUATION nominations.
Dying without a will is called “dying intestate”. When this happens, the court will appoint an administrator and your assets will be distributed to a strict formula.
This may not be in line with your intentions.
You should update your will in the event of any significant changes in your life — such as the birth of children, death of a family member, significant changes to your financial situation, entering a new business or retirement.
Some assets won’t be distributed through a will, such as superannuation benefits — unless a binding nomination is made to the esta estate — assets owned in joint names that will pass to the surviving owner, and life insurance payouts where you have nominated a beneficiary to directly benefit.
Without question, the most important consideration when preparing your will is your children, in particular young children. Your will should detail who you want to take care of your children in the event of your death, as well as how you want them to be cared for. This is particularly important in blended family arrangements. A testamentary trust will allow you to nominate someone to distribute income from the estate to your child in the manner you wish.
Estate planning is a complex area and you should seek professional legal advice before structuring your will and additional estate planning.