Aug 20, 2018

Our Insights

It’s never a comfortable thing to think about what will happen when we are gone, however properly planning your estate makes things less difficult and stressful for your loved-ones and dependents in the event of your death.

Having a comprehensive plan in place will ensure your beneficiaries receive the correct entitlements, will help ensure that the tax those beneficiaries have to pay is minimised, and can also help prevent conflict arising between families members. When mixed families, large estates or businesses are involved, an estate plan is even more essential.

We recently wrote about the basics of estate planning. Building on the topic, we've now put together this check-list to help ensure your assets are distributed exactly as you intended.

1. Do you have Will?

While Wills can be contested, having a good, professionally drafted Will minimises the risks and ensures that your estate will be managed and assets distributed according to your wishes.

If you have a mixed family, a Will also provides clarity to all family members as to what your intentions were, and minimises the risk of confusion or conflict between beneficiaries. 

2. Does your Will need updating?

Wills should be considered an evolving document, and should be updated whenever your circumstances change. Circumstances that may require you to update your Will include changing employment, starting a business, getting married, getting divorced, the birth of a child or the birth of a grand-child, the death of someone you had previously listed as a beneficiary or the sale or loss of an asset you previously left to someone in your Will. 

3. Have you included all items of value that belong to you in your Will?

When creating a Will, you should take an inventory of all your assets of value - including digital assets. How detailed you wish to be is up to you, but as a rule-of-thumb, include assets valued at over about $100. This includes non-physical assets such as shares in companies.

You should also list all your liabilities, including all loans. This will ensure your heirs are not hit with any nasty surprises.

4. Is your Will structured to ensure your beneficiaries receive the maximum value or benefit from your assets?

This is where the assistance of an experienced financial planner is absolutely critical. There are certain taxes that apply to some beneficiaries, but not others. For example, if someone with super dies and the Will stipulates the benefits will be shared 50 percent each between a spouse and a child, the spouse will receive their share tax-free, but the child will be required to pay 17 per cent tax. That could be a hit of tens, or hundreds of thousands of dollars to your estate. A good financial planner could help you avoid this by, for example, advising that 100 per cent be left to the spouse and that the child be compensated through other assets in the estate. 

5. Have you appointed an Executor of your Will?

Appointing a trusted Executor of your Will is essential. An executor is like an advocate that will help to ensure that your Will is carried out according to your wishes.

6. Have you appointed a Power of Attorney?

A Power of Attorney is different to an Executor. A Power of Attorney can carry out duties and attend to affairs on your behalf if you are medically unable to do so. They can help make important decisions relating to business, investments or medical treatment on your behalf. 

7. Have you left instructions in regards to your funeral?

Despite what you may think, many people do not fully articulate what their wishes are regarding their funeral to family members. Setting this out as part of your Will gives you, and your family, peace of mind. 

8. Have you provided instructions for the running of your business?

If you are a business owner, planning for your succession in the business and setting out business strategies in your absence can help ensure your business continues to operate in the event of your death.

9. Have you notified your Superannuation Fund about who you want to receive your Super benefits?

Your Super benefits are not automatically included in your Will, and who they are paid to can vary depending on your fund. It’s important to let your fund know who you want any benefits paid to.

10. Have you nominated a beneficiary of any life insurance and is it up to date?

Once again, you may have specific instruction in terms of who you would like your life insurance paid out to, rather than leaving it up to generic provisions within your Will. 

11. Have you nominated guardians for your children?

Regardless of your age, it’s important to nominate who you wish to be the guardian of your children, if they are under 18. A financial planner can also provide advice on how to properly provide for your children in the event of your death.

Seek advice

Do not tackle your estate planning without the help of an experienced financial adviser. Calder Wealth Management can put an estate plan in place that best protects your assets and those you want to benefits from them.

Call us on (08) 8373 3333 to schedule your free initial appointment. 

Written by Ben Calder, Private Client Adviser at Calder Wealth Management.