7 Steps to Estate Planning
Nobody likes to think about their own mortality but having an estate plan in place will make it easier for your loved ones to handle your affairs, no matter your age, stage of life or circumstances.
Your estate plan will generally be centred around your Will in addition to arrangements for your superannuation and other assets that your Will may not cover.
We have broken the process down into 7 steps to consider when planning your estate:
Choose appropriate people that you trust to take on the roles of Executor of your Will and Powers of Attorney. Discuss this with them to ensure they understand and are able to carry out their responsibilities
Aim to be fair and make adequate provisions for your dependents and close family members. Where you wish to exclude someone from your Will, seek professional advice on how this is to be expressed. A person who feels unfairly provided for may have grounds to contest your Will and this can be a stressful and costly process for family members while also damaging relationships.
Be specific about how your assets are to be distributed, making provision for payment of taxes and debts. Not doing so can result in some beneficiaries receiving less than you intended.
Account for assets that are not distributed via your Will. This extends to superannuation, life insurance policy proceeds, jointly held property or assets held via certain trust structures. Often these assets need to be considered as part of the estate plan, but outside the Will.
Ensure it is tax-effective. Capital gains tax can apply on the disposal of assets by a deceased estate and this can be costly. A lump sum superannuation tax may also apply in some cases. There are structures that you can put in place to minimise these taxes.
Consider the simplicity or complexity of your family situation including your own relationships and those of your children and other beneficiaries. If you have a spouse, dependent children, or disabled dependents, think about what will be needed to assist them. Provide instructions on how the assets of the state are to be treated in the case that changes occur in your family for example marriage, divorce, or the birth of a child.
Once you have your estate plan in place, ensure that you review it at regular intervals and after significant events to ensure that it is still relevant.
It is important to seek professional advice when planning your estate and at Sound Life, we are only too happy to discuss this with you and your loved ones.
