Stone Financial Services Pty Ltd (ASIC No. 318837) ABN 24 125 161 435 is a Corporate Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361 Joanne Hahnel (ASIC No. 313858) is a Limited Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361
Having a valid estate plan is essential
If you pass away without a valid will, or dying intestate, state laws determine how your estate will be administered. This leaves your family with a complicated administrative burden, and may result in assets being distributed against your wishes and at risk of contention, plus unnecessary tax liabilities for your beneficiaries.
You may not think you have sufficient assets to worry about estate planning, or you believe your estate will automatically pass to the people you intend, such as your spouse and children, but that is not always the case.
Appropriately documenting how assets should be distributed in the event of your death protects your interests and those of your loved ones. A Will also enables you to appoint the person you trust to administer your estate in accordance with your wishes.
More than just a will
An effective estate plan includes more than a will. A substantial part of your estate may not be subject to your will, including assets held in trusts and superannuation funds. These are not included in the estate covered by the will and need to be dealt with separately.
Jointly owned properties go to the last surviving owner, so it is important to understand how such assets are held and people who have a family trust need to understand who would take control of the trust after their death. Often the key here is the appointor of the trust.
There is a huge build-up of wealth in superannuation funds, so it is essential to include instructions in your estate plan on how to deal with your interests held in family trusts and superannuation funds. People need to approach their superannuation fund and complete the right paperwork to identify who should receive the fund’s assets when they die. For self-managed superannuation funds, a death benefit nomination form must be completed to direct how assets will be distributed. In the absence of a nomination, the funds’ Trustee decides who receives your superannuation.
Therefore, a comprehensive Estate Plan will include, among other things, a Will, Enduring Power of Attorney as well as Superannuation Death Benefit Nominations.
Drawing up an estate plan
There are a few ways to write up a will, the most common being through a lawyer, or by purchasing a kit from a newsagent. Although both are legal, there may be a number of fiddly administrative issues associated with legal will kits and they fail to consider certain provisions for your beneficiaries, therefore it is usually best to consult a lawyer who can provide you with expert legal advice and ensure your estate is protected. Additionally, it is helpful to discuss your estate plan with your accountant and financial planner who can ensure your finances and assets are protected and well in order.
Although, even if you never get around to seeing a lawyer or discussing your wishes with your accountant or financial advisor, it is a good idea to at least have something written down. While not legally binding, filling in something like our Personal Information and Estate Record form gives your family an idea of what you want.
Where there’s a will…
At the end of the day, you have worked hard to earn your assets, and they should be distributed according to your wishes. Working with your accountant, adviser, and estate planning lawyer will help ensure that your estate goes to who you want it to go to in the most tax-effective manner. Also, while not always easy, it usually helps to discuss your estate plan with members of your family. Later disputes may be overcome by setting expectations in advance.
At Stone Accountants & Advisors, we take the protection of your finances and assets very seriously. If you would like some assistance with estate planning, please contact us.
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product. These strategies don’t apply to everyone – our Wealth Advice Team must pre-qualify you to ensure you will be better off from these strategies and will then provide you with a Statement of Advice which clearly outlines our strategies and advice for you.
Stone Financial Services Pty Ltd (ASIC No. 318837) ABN 24 125 161 435 is a Corporate Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361
Joanne Hahnel (ASIC No. 313858) is a Limited Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361