As blended families become more common estate planning becomes a more complicated process. The added complexity becomes apparent when considering who and what you are leaving behind after you are gone. Manoeuvre Wealth can save you hours of time, headache and heartache and make the process far more simple.
Not having a valid estate plan can be financially and emotionally exhausting for the family you leave behind.
Why do I need to plan my estate?
Estate planning is more than just a Will; it is ensuring that after you are gone your assets are distributed they way you want and in the most effective way.
45% of Australians do not have a valid will. Your assets will be distributed according to a pre-determined formula if you die without a will. The State Government will take control of these assets if your only living relatives are more distant than your cousins.
If you had a child with a partner and did not leave a will, the child would receive your assets when they became 18 year old whilst your partner would receive nothing.
Taking the time to adequately plan your estate is important for the future wellbeing of your family. It ensures they don’t have to deal with unintended consequences of these kinds of situations.
Where do I start?
Planning your estate starts with deciding who will inherit which assets and who is in charge of distribution. Choosing someone to manage your affairs if you’re injured or sick, unable to control your investments is vital.
Have you accumulated sufficient assets to provide your family to pay off your debts? Come and talk to us to ensure you are doing all you can to reduce the shortfall if there is not an adequate amount to pay off your debts. Relieving your family of this burden is one of the advantages of setting up your estate.
Family dynamics are usually complicated and this results in difficulty when naming beneficiaries. We will help to create structures to protect your estate after your death by acrimonious family members or business stakeholders.
Should I include a testamentary trust in my will?
If you intend on preserving your estate, including provisions in your will to establish a testamentary trust can be advantageous to your beneficiaries. A testamentary trust allows the estate assets to be divided between the beneficiaries. The assets will still be part of the estate and mean they are protected against law suit or divorce. It also allows you to distribute the earnings from those assets to minors under the age of 18. This is can save you lots of tax of many years.
What goes into estate planning?
When you pass away, ensure you are leaving behind the least amount of financial burden for your loved ones. Making the distribution of your assets and the takeover of your responsibilities can be an easier task for your family if you plan your estate.
The main factors to decide upon for your estate are:
- Who will receive what asset
- What the tax implications are for the beneficiaries receiving those assets
- Who the executor(s) will be
- If you need a testamentary trust
- The payout of superannuation
- The payout of life insurance
Estate planning will make certain that you:
- minimise the tax payable on income and capital gains earned on your assets
- minimise the tax your adult children beneficiaries pay on superannuation
- pass on ownership and control of your assets to your intended beneficiaries
- have protection of your assets if the beneficiary falls into legal trouble (e.g. divorce, bankruptcy)
How often should I update my estate plan?
You should review and update your estate planning regularly and make changes when significant events occur.
The events include:
- The birth of children
- Starting retirement
- Significant change of assets
- Change in beneficiaries’ marriage, lifestyle or independence
- The death of someone you included in your estate plan
Not keeping your estate plan up to date can have undesired results. For example; an ex-spouse inheriting part of your estate while a current spouse receives little to no part of it.
Estate planning is an important part of your overall financial plan. An disorganised estate can leave a major burden for your family and loved ones. Planning your estate can be a complicated process. Chat with us to ensure your estate plan is completed effectively.