MARK PLASKITT, FINANCIAL ADVISER
To paraphrase Benjamin Franklin: the only things certain in life are death and taxes!
It raises the issue of estate planning – if you know you can’t live forever, and you’ll likely have some assets when you die, what will happen to those assets?
The starting point is often a Will. A Will can help ensure the assets that form part of your estate get distributed according to your wishes. Since you can’t make or change your will after you die, you need to get it right in advance.
People often don’t realise that a Will typically only applies to personally held assets and therefore may not deal with a significant portion of their wealth. For example, the proceeds from your superannuation funds and life insurance policies don’t necessarily form part of your estate, but they can pass directly to certain beneficiaries nominated by you.
Also, some assets never form part of an estate, like jointly owned assets (properties are often jointly owned), or assets held in a discretionary family trust.
To cover all bases, thorough estate planning involves putting in place strategies that address all your assets, not just those covered by your Will.
Just about every asset you own and every investment you make has estate planning implications. As a result, estate planning is something everyone needs to consider, regardless of 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 estate planning?
Estate 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 the right estate plan?
Estate planning 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 your estate assets are distributed among your surviving family members.
If you die without a valid superannuation or life insurance death benefit nomination, 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.
- Determine if you have sufficient means to achieve your estate planning objectives.
- Develop a range of strategies to provide certainty, tax efficiency and/or asset protection.
If you don’t have an estate plan, or haven’t updated your estate plan lately, it’s probably time to talk to your adviser and your solicitor.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. ________________________________________________________________________Mark Plaskitt is an Authorised Representative GWM Adviser Services Limited ABN 96 002 071 749, MLC Financial Planning an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies.