Mention estate planning, and a Will is often the first thing that comes to mind. But quality estate plans go much further, providing holistic protection at every life stage.
A professionally drafted Will should form the cornerstone of your estate plans, ensuring your assets will be distributed in line with your wishes. However, it pays to be mindful that not all assets can be bequeathed through a Will.
Property co-owned with a spouse (as joint tenants) automatically passes to the co-owner when you die. If you don't want this to happen, the property can be switched to a ‘tenants in common' ownership structure. This way your interest in the property automatically flows into your estate when you pass away.
Get your super sorted
The trustee of your super fund has the discretion to distribute your super as they see fit, and the only way around this is to complete a ‘binding death benefit nomination' specifying a particular beneficiary. Strict rules apply, and it's a step where the professional advice of a financial adviser is a must.
Is your life cover up to date?
If you've named a beneficiary on your life cover policy, the insurer must pay them directly. This money will not form part of your estate. This makes it worth speaking to your financial adviser for expert advice before making adjustments to your life cover.
Be mindful of the impact of tax
The impact of tax in estate plans should not be overlooked. The disposal of assets in line with your Will can trigger capital gains tax. A non-dependent beneficiary who inherits your super savings can face a considerable tax bill. To ensure your loved ones – rather than the tax man, benefit from your estate, talk to your financial adviser for a review of the likely tax implications of your Will.
Drafting a Will can be a confronting reminder of our mortality however quality estate plans can play a role while we are still very much alive.
Power of Attorney
Power of attorney gives a person or company the authority to act on your behalf in certain circumstances. If you're planning a round-the-world trip for example, and you need someone to look after your financial affairs while you're away, power of attorney allows someone you trust to manage your money until you return.
Power of attorney can also be a financial lifeline if you're rendered incapacitated in any way and are unable to authorise bank withdrawals or the sale of assets.
An Enduring Guardian – choose your lifestyle
As we age, Enduring Guardianship is worth considering. It allows someone you trust to make decisions about things like advanced care treatment when you can no longer make them yourself.
Is a testamentary trust right for you?
A testamentary trust is set out in your Will but only comes into effect when you pass away. These trusts can be helpful if you have beneficiaries who are children, or who have diminished mental capacity, or if you're just not sure a beneficiary will use their inheritance wisely.
Speak to a professional
With so much more to estate plans than a Will, it is worth speaking to an expert about possible gaps in your plans that could leave you or your family vulnerable.