Estate planning is a process designed to help protect the wealth you have built over your lifetime so that it is distributed smoothly and in accordance with your wishes.
More than just a Will, an estate plan also takes into account your superannuation and powers of attorney as well as assets held solely in your name or jointly with others, or assets held in private companies or trusts.
Some elements to consider in Estate Planning:
Put simply, a Will is a legal document which outlines your wishes following your death. Whilst most people have a Will in place (and if you don’t you certainly should), it is important that your Will is updated when your circumstances change, in order that your estate is dispensed according to your current situation and wishes. Some examples of when you should speak to your lawyer about updating your Will:
- getting married, commencing a de facto relationship, separating or getting divorced;
- having children, grandchildren or becoming a step parent;
- married child’s division of assets on a possible failure of the marriage;
- buying real estate or other valuable assets;
- buying, selling or operating a business;
- if you have family members with special needs or children who are vulnerable; and
- if you set up a family trust or company.
These days, the provisions you make in your Will can be challenged, and the best way to protect against this is to update your Will when your circumstances change.
This forms part of a more comprehensive version of a standard Will, which establishes a trust upon your death, rather than passing assets to the beneficiaries in their own name. A Will incorporating a testamentary trust has a number of potential advantages over a regular Will, including:
- protecting your estate’s assets from existing or future creditors;
- minimising the tax payable on income and capital gains earned by the trust.
Perhaps most importantly, a testamentary trust can also be structured so that the assets stay with your ‘blood’ relatives in the event of a marriage breakdown at some future stage.
Super is often a large component of a person’s assets upon death (particularly where life insurance is held in a super fund, as is often the case), yet few of us are aware that super is not automatically distributed in accordance with your Will. The trustee will often have absolute discretion in who receives your super upon your death, leaving the funds at risk of being distributed in a manner contrary to your wishes.
This problem can often be overcome, however, by making a written, binding nomination directing your trustee to pay your super to your estate upon your death.
As there are various ways your superannuation can be structured and ultimately dispensed, it is important that you discuss the various options with both a financial planner and lawyer so you can make better, more informed choices which will benefit both you and your family.
Powers of Attorney (PoA)
Being in control of our lives and the decisions we make is important to us all. However, sometimes things happen that mean we don’t have quite as much control as we might like. State law gives you a number of ways to help ensure you have maximum control over how decisions are made when you are not in a position to make those decisions yourself. You can appoint someone to make those decisions for you through documents known as Powers of Attorney.
Your estate plan will provide you with the comfort of knowing that your wishes will be carried out should anything happen to you in the future. This benefits not only you, but also your family members, who otherwise may face the burden of making choices for you without your input. If you already have an estate plan in place, you should see your lawyer every few years to have this plan reviewed.
Law 554, at 554 Mount Alexander Road, Ascot Vale, and its predecessors has been practicing in the local area for almost 40 years. They provide a range of legal services including, in particular, advice on estate planning.
Law 554 and Abound Lifestyle Planning have been providing each other with support for the past few years and in recognition of that support, Law 554 is pleased to provide Abound Lifestyle Planning clients the opportunity to meet with a lawyer at the following discounted fee rates:
Feel free to contact Law 554 on 03 9375 2616 to make an appointment. Naturally we would be more than happy to assist in briefing Law 554 with a background of your situation and assets if deemed appropriate.