Tag Archives: Estate Planning

Estate Planning: Making sure your money goes where you want it to

By Robert Wright /October 06,2016/

Estate planning is not just about making a will. It’s about deciding how you want to be looked after (both medically and financially) if you can’t make your own decisions later in life. It’s also about documenting how you want your assets to be distributed after you die.

Estate plans can be a complex area. So you may want to consider seeking professional advice to help guide you through the maze of legal, tax and financial matters arising from estate planning.

Here are some things to think about:

1. Make a will – a solicitor can help you draw up a legally binding document that advises who should receive your assets when you die. If you don’t have a valid will, your estate will be distributed according to the law in your relevant state.

2. Appoint an executor – this is the person who is responsible for making sure your assets are distributed according to your wishes, as well as paying bills, closing banks accounts and so on. Find out about the duties of an executor.

3. Set up a power of attorney – An enduring power of attorney allows someone to make financial decisions on your behalf, even if you lose legal capacity. In some states, a power of attorney holder can also make lifestyle decisions. In others, you need a separate document (eg enduring guardianship). Ask your solicitor about the relevant powers of attorney documents in your state.

4. Guardianship – if you haven’t legally appointed a person to manage your affairs through a power of attorney and it becomes necessary to do so, then a family member or friend can be given guardianship to make decisions on your behalf about your lifestyle (health, where you live etc). An administrator can also be appointed by a guardianship board to manage your financial affairs.

5. Consider a family trust – this can help you manage your family assets or business with potential tax benefits. A family trust might also assist you with succession planning, wealth creation and protecting your assets, but make sure you’re aware of the tax implications. Trusts are very complex and you should get specialist advice to decide if they are appropriate for you. You should also discuss succession planning for any existing or new family trusts you may have with your solicitor.

6. Nominate super beneficiaries – think about how you want your super to be distributed after you’re gone. Nominate your beneficiaries by completing a form from your super fund. Make sure you keep your nomination up-to-date. If you don’t, the super money may end up in the wrong hands.

7. Insure yourself to protect your loved ones – insurance helps you and your family in the event of unforeseen events, such as serious illness or injury. Find out more about the different types of insurance, some of which are available through your super.

 

Do you need help?

Estate planning can be a complex area and there could be serious legal and tax implications if you don’t have it set up correctly. But while it can seem a bit daunting, it can also give you real peace of mind.

 

Source: AMP

A Will isn’t always the way

By Robert Wright /June 28,2016/

You would have heard the saying: “where there’s a will, there’s a way”.

This statement is usually used to encourage people who are losing enthusiasm for a task or goal.  But it also reflects the way many people feel about estate planning. They think that so long as you have a will, you have a way to ensure your wealth is passed correctly to your loved ones.

But this is not necessarily the case.

The truth about Wills

A will can help ensure the assets that form part of your estate get distributed according to your wishes.

But did you know that a will typically only applies to personally held assets and therefore may not deal with a significant portion of your wealth?  For example, the proceeds from your superannuation funds and life insurance policies don’t necessarily form part of your Estate. They can pass directly to certain beneficiaries nominated by you or go to your Estate where they’ll be dealt with by your will.

Also, some assets never form part of an estate, like jointly owned assets and assets held in a discretionary family trust.

To cover all bases, thorough estate planning (or personal succession planning as it’s also known) involves putting in place strategies that address all your assets, not just those covered by your will.

Do I need a personal succession plan?

Another common misconception is that personal succession is only for the wealthy or the elderly. However, just about every asset you own and every investment you make has estate planning implications. As a result, personal success planning is something we all need to consider, regardless of our age or stage in life.

At a minimum, every individual should have:

• a current will to distribute estate assets
• an Enduring Power of Attorney to cover situations where they’re unable to make financial decisions themselves, and
• appropriate estate planning arrangements to distribute specific assets that are not covered by the will.

What are the benefits of personal succession planning?

Personal succession planning can:

• provide certainty by getting the right assets in the hands of the right people, at the right time, and
• enable you to provide for your loved ones while minimising tax payable by your nominated beneficiaries.

What are the consequences of not having a personal succession plan?

Personal succession is something you should address now. Don’t wait until it’s too late.

If you die without a valid will, intestacy legislation will determine how to distribute your estate assets to your surviving family members.

If you die without a valid death benefit nomination in your superannuation or life insurance, the proceeds may not be distributed according to your wishes.

And, if you’re badly injured in an accident or lose mental capacity, who will manage your affairs while you’re still alive but unable to make your own decisions?

Who should I contact to discuss my personal circumstances?

You should consider holding an initial discussion with a qualified financial adviser.  With assistance from your financial adviser and, where appropriate, legal and tax professionals, you can:

• Ensure you’re making the right ownership decisions when acquiring new assets or re-structuring your existing assets. For example, your financial adviser can help you determine whether it’s best to invest in your name, your partner’s name, joint names or with further tax and legal advice to consider another arrangement such as a trust or company.
• Determine if you have sufficient investments to achieve your estate planning objectives. This includes holding life insurance inside or outside of superannuation to provide your family with a lump sum payment or an income stream to repay debts, meet their ongoing living expenses and cover your children’s future education costs upon your death.
• Develop a range of strategies to provide certainty, tax efficiency and/or asset protection. For example, your financial adviser can help you make a death benefit nomination in superannuation or make a beneficiary nomination for your life insurance policy. By making appropriate nominations now, your beneficiaries will be able to effectively and efficiently receive the death benefit when you’re no longer around.

To get your estate planning affairs in order or to discuss options available to you and/or your loved ones, please contact us.

 

Source: MLC

What to consider when discussing Estate Planning with your loved ones

By Robert Wright /March 08,2016/

Broaching the subject of your passing or potentially becoming mentally incapacitated is a sensitive and difficult discussion and not necessarily one that those close to you will be keen to have.

So, while it’s important to discuss your final wishes concerning the distribution of your assets with close family, it’s also critical to make sure you act on your requests as much as possible, while you are still fit and healthy.

Here are some topics to consider:

1. Your will

Your will is a legal document that covers what you’d like to happen with your assets and allows you to appoint a guardian for your children or even detail wishes for your funeral. It’s important to have a will in place as it represents your voice after you’ve passed.

Discuss what will be included in your will and how you want your assets to be distributed. This could be a controversial subject, so make sure you iron out any family issues before you see the solicitor. If you decide to opt for writing your own will, make sure you have a solicitor or trustee review it to make sure it is legally binding.

2. Who you would like to be the executor of your will?

Let your family know the person you have chosen to be the executor – this is the person responsible for carrying out the wishes detailed in your will. Make sure the person you’ve chosen agrees and knows the duties of an executor (which differ in each state). Also, let your executor know where your will and other important documents will be kept, such as with your solicitor or in a bank safe.

3. Who will make your financial and lifestyle decisions if you can’t?

Family members may volunteer to help, but you will need planning ahead tools in place, including a properly documented will, Power of Attorney and Enduring Guardianship to appoint someone to make legal, financial and health decisions for you if you can’t.

4. What are your wishes for care if you can’t look after yourself?

The My Aged Care website (www.myagedcare.gov.au) provides a range of options from receiving help in your home to after-hospital care to transferring to an aged-care home.

5. Are your super beneficiaries current?

Some people assume that the proceeds of their super are included in their will. This is not the case, so you need to make sure your beneficiaries are up-to-date. A beneficiary is a person who receives money or other benefits from a benefactor.

6. What is your plan for your kids (and the pets) if you can’t care for them?

Consider appointing a legal guardian to look after your children. But be aware that the court has the ability to change or remove the guardian if it is in the child’s best interest to do so. Also, check what options are available for looking after your pets when you can’t.

7. Do you want to be, or are you already, registered as an organ donor?

Being an organ donor can be a sensitive, and sometimes controversial, family issue.  There are generally three steps to consider:

• Discover what’s involved
• Make the decision to donate, and
• Discuss it with your family.

8. Do you have specific instructions for your funeral arrangements?

Discuss this with your family as they will need to enact your wishes within days of your passing. This will be a very stressful and emotional time for them, so consider how you want to pay for your funeral and document where you want your final resting place to be.

9. Talk to your partner about finances

Check with your bank to make sure your partner will be able to access your account after you’ve gone. This is because funds from your estate (probate) can take months before they become available to pay for funeral and other out-of-pocket expenses.

So, now you know what to think about before you start the conversation. If you really want your assets to be distributed according to your wishes, it’s a good idea to let loved ones know of your plans in advance. And while it may be a difficult and emotional subject to discuss with them now – it will ensure that your wishes are known – and it will be for their benefit in the long run.

 

Source: AMP

Estate planning: not just for the wealthy

By Robert Wright /December 01,2015/

Most people don’t like to think about estate planning. In fact according to studies, almost half of all Australians don’t have a legal will. Yet if you have some assets; such as your home or some nice furniture or collectibles you still need an estate plan, especially if any minor children are involved.

Contrary to popular belief, estate planning isn’t just for the wealthy. Estate planning can help your family during a particularly difficult and emotional time. A well-structured estate plan will make things easier for your loved ones by making provisions for supporting your significant other and any other dependent, preserving assets for later generations, and protecting your family’s security and privacy. On the other hand, a poorly constructed estate plan—or no estate plan at all —may lead to a greater taxation obligation and increased costs. Without an estate plan you also run the risk of your assets being disposed of in ways you wouldn’t have necessarily chosen.

The truth is that estate planning is an important consideration for everyone.  In short, estate planning encompasses the accumulation, preservation and distribution of an individual’s assets. Its main aim is to enhance and maintain the financial wellbeing of an individual and their respective family – whatever form the family unit may take – during the course of their lifetime and at the time of their passing.  For this reason, estate planning ought to be addressed sooner rather than later.   Life events, such as the birth of a child, engagement, wedding, or other form of commitment ceremony, are often ideal occasions to begin the process.

Regardless of where you are along life’s journey, or your particular financial circumstances, starting a conversation around estate planning today can help you prepare for unexpected events in the future. For example, estate planning can help you to:

• Identify and nominate who will take care of any minor children.
• Nominate who will manage your assets and financial affairs during your lifetime should you become unable to manage them yourself through illness, injury or physical/mental impairment.
• Ensure that your estate is distributed according to your wishes; to the right people, at the right time, and in the right form.
• Minimise the time, taxes and expense associated with settling your estate at the time of your passing.
• Provide details of the life-sustaining medical care you wish to receive (or not receive).
• Identify who will make medical decisions on your behalf should you become incapable of making those decisions yourself.

The last thing any of us want is to have conflicts within the family. However the reality is that many of us simply fail to have adequate estate planning documents and structures in place. Should an unexpected illness or death of a family member occur, it can have serious ramifications at an already stressful time and lead to conflict and relationship breakdown.

A legal will is just one part of an effective estate plan. Other documents and legal structures that may be relevant (depending on your circumstances) include Powers of Attorney, Trusts, Superannuation Death Benefit Nomination, Appointment of Enduring Guardian, and an Advance Care Directive (also known as a living will).

A further consideration is your retirement savings held within the superannuation environment. The introduction of compulsory superannuation means that every Australian worker now has a significant asset in the form of their superannuation savings that sits outside the confines of their legal will (if they have one).

In almost all situations, these superannuation benefits are held in a trust that is controlled by a third party trustee.  This means that these superannuation benefits do not form part of an individual’s estate and as such cannot be determined by the instructions in their will.  Many superannuation funds also offer life insurance as a benefit to members, so it’s not just the accumulated retirement savings that are at stake, but possibly a substantial amount of money in life insurance if the member were to die prematurely or unexpectedly. This is where a Superannuation Death Benefit Nomination is essential.

Estate planning is a complex area that requires careful planning and the right advice from qualified professionals.   As such, you should always consult with financial advisory and legal professionals who have expertise in estate planning. Effective estate planning can provide you with a great deal of comfort and peace of mind that comes from knowing that your affairs are in order and that the needs of your loved ones will be met long after you’re gone.  To find out more, speak to your financial adviser.

Source: Capstone