Estate Planning - What you need to know
This article was written by Lana Black Senior Solicitor at Osborn Law
Put simply, estate planning is a way of ensuring your assets are passed on to your beneficiaries in the most financially efficient and tax effective way possible. Estate planning is much more than just preparing a will! Effective estate planning is as much about preserving relationships as it is about distributing assets.
Estate planning looks at effectively planning for what is to happen with each element of your wealth after you pass away. The most obvious reason to do this is to protect your hard-earned assets and to do so in the most advantageous way for the beneficiaries of your estate.
Traditionally, your will was the major focus for estate planning. With progressive and ongoing changes to the way personal, investment and business wealth is owned and taxed these days, your will has become just one part of the process of implementing and achieving estate planning objectives and is not always the most important part. Crucial estate planning decisions are now often made by your choice of financial products such as superannuation and insurance, and in the ownership structures chosen for business and investment assets, the protection of assets and the minimisation of tax.
There are a wide variety of estate planning strategies that we use; these all comes down to circumstance and your priorities. No one size fits all approach works when it comes to this area. In some circumstances, simple wills are appropriate; more often than not, they aren’t.
Estate planning has many elements, including:
· Powers of Attorney
· Enduring Guardians
· Business Succession
We consider what risks you and your beneficiaries may face now and into the future and look at strategies to try to minimise the risks you aren’t comfortable with. These risks might relate to family provision claims (people contesting your will), competing interests in blended families, relationship breakdowns, subsequent relationships, outside influences in your advancing age and bankruptcy.
The most effective estate planning involves us, as lawyers, working together with your accountant and financial planner (your other professional advisers) to ensure you get the most use and enjoyment of your assets while you are alive, as well as providing for your beneficiaries after your death. Effective estate planning requires specialised knowledge and consideration of all the relevant circumstances.
Failure to give attention to, or to implement, estate planning can lead to a reduction in the wealth passed on to your intended beneficiaries, cause unnecessary tax liabilities or the foregoing of pensions. It can even result in benefits passing to the wrong beneficiaries, e.g. estranged or unethical children or other relatives, former spouses or creditors. There seems little point diligently accumulating wealth if the wrong person ultimately benefits!
Thank you to Lana Black from Osborn Law for producing this article for Serendipity Wealth Advisor's for use on our website.