Estate Planning Overview

Estate planning involves much more than simply preparing a Will so that your assets are distributed according to your wishes when you pass away.

This is a general overview of estate planning issues and is designed to help you identify issues you may need to consider in order to develop an appropriate plan.

 Naturally, I would be happy to answer any queries you have concerning your specific estate planning needs. 

 INTRODUCTION

 Estate planning is a three-phase process involving:

1. identification of your personal assets and the assets in your broader estate such as assets held in a superannuation fund, owned jointly, owned by trusts or companies, and life insurance;
    
2. identification of potential risks you wish to address, including for example your loss of mental capacity or early death, or the possible divorce or bankruptcy of a beneficiary;
    
3. the design and implementation of a plan and structures that incorporate all your assets and takes into account; flexibility to accommodate future changes, family concerns, risk minimisation, tax minimisation and succession issues. 

The process is a multi-disciplinary exercise that will usually require the co-ordinated involvement of you, your financial planning, accounting and legal adviser. 

 So what does estate planning involve?

Although a Will is a good start, estate planning involves much more.  While not all of the issues listed below may be relevant to your current circumstances, it is worth considering each of them to determine whether they are relevant, either now or perhaps in the future.  A well thought out plan may include:

1. A Will;
    
2. Appointing an Enduring Power of Attorney: to manage your legal and financial affairs if you can’t, or don’t wish to;
    
3. Appointing an Enduring Guardian: to manage you health and welfare issues if you can’t;
    
4. Preparation of an Advanced Heath Care Directive: to direct family and doctors what medical treatment you do or don’twish to have;
    
5. The co-ordination of company, trust and superannuation structures;
    
6. The future realisation of your investment in a business: do you have an exit strategy;
    
7. Flexibility to accommodate changes to the laws or changed circumstances that my exist at the time you pass away;
    
8. A tax efficient structure addressing the income tax, Capital Gains Tax, GST and stamp duty implications of transferring assets and/or managing assets upon retirement, death or any other event;
    
9. Testamentary trusts:  these trusts are created by your Will and come into existence after you pass away.  There are many types of trust that can be created depending on what you wish to achieve or address.  Some enable maximum flexibility so that a beneficiary may enjoy the full benefit of a gift from your estate whilst enjoying the asset protection and taxation benefits provided by a testamentary trust, whilst others protect an inheritance for the benefit of a beneficiary who is not capable of managing their inheritance themselves.The use and integration of insurance as an asset in your plan, whether as part of a business succession strategy to cover debt or income, or simply to bolster the wealth of your future estate.
    
10.  Incorporation of a retirement plan as well as investment and wealth accumulation strategies in your planning. 
     
11. The consideration of a range of critical events, apart from death.  These include:

• mental incapacity: yours and each of your future beneficiary’s; 
   
• physical incapacity: yours and each of your future beneficiary’s
   
• bankruptcy or business failure: yours and each of your future beneficiary’s;
   
• divorce: you and each of your future beneficiary’s
   
• your retirement; 
   
• re-marriage: you or your spouse after the first passes away
   
• the potential for disputes between beneficiaries over the Will