Revisiting Financial Resolutions: Estate Planning
We are at the time of the year where people are either going strong with their financial goals, or they’ve completely abandoned them.
It’s time to revisit our earlier blog post “Get financially sorted in 2024 with these steps”? and take the time to break them up into easy steps.
Let’s do it together—shall we, starting with Estate Planning.
What do we mean by ‘Estate Planning’?
Estate planning is all about having peace of mind that the right structures are in place to make sure your assets are distributed effectively and in the way you want. This may include: your Will, Testamentary Trusts and Binding Death Benefit Nominations for your Superannuation. It can also include strategies which aim to reduce the tax on super death benefits.
Assets which are likely to be included in your Estate are:
· Real Property - held in your sole name, or as ‘tenants in common’;
· Bank Accounts – held in your sole name;
· Shares – held in your sole name;
· Superannuation – if your Legal Personal Representative has been nominated as the beneficiary; and
· Motor vehicles, personal effects and other chattel.
Estate Planning also covers how you want to be cared for, both financially and medically, if you are no longer able to make your own decisions. This part of your estate plan may include documents such as: Enduring Powers of Attorney and Enduring Guardianship (also known as a Medical Power of Attorney).
Why is it important to have an Estate Plan?
By having a properly curated Estate Plan, you can ensure that you maximise the financial legacy left behind, from the transfer of your wealth to your beneficiaries.
An effective Estate Plan can:
· Help your avoid disputes between your beneficiaries;
· Reduce the tax payable by beneficiaries on the transfer of assets, including Super Death Benefit Tax;
· Reduce beneficiaries’ tax payable from the income and capital gain on assets.
· Ensure your legacy assets are protected if your beneficiary is involved in legal difficulties such as divorce or bankruptcy.
Additionally, by having Estate Planning documents such as Enduring Power of Attorney and an Enduring Guardian, your close family members will not have to apply to the Courts in order for them to be able to act on your behalf, if you can no longer do so.
Estate Planning shouldn’t be left to chance, or to the Government. Talking with financial planners who can work with your lawyers or solicitors to plan your estate the way you wish, will give you peace of mind.
