Effective Estate Planning

Effective Estate Planning

There is more to an effective estate plan than simply signing a will for the lowest price you can find.

The estate plan will require a thorough approach considering your current and foreseeable circumstances. At a minimum, it needs to consider:

(1) what assets you currently own;
(2) what assets you may reasonably expect to acquire in years to come;
(3) your personal circumstances; and
(4) how you wish those assets to be distributed after your death.

Your lawyer’s role in the process is to document your wishes to ensure they are legally enforceable when you die. Ideally, an estate plan should:

  • appoint a trusted person (or people) as your Power of Attorney to manage your financial affairs and/or a Power of Guardian to manage your health and welfare if you lose legal capacity;
  • put in place an Advance Health Directive which clearly sets out your medical wishes;
  • appoint an executor and trustee of your will to administer your estate (and associated trusts) after you die;
  • nominate your intended beneficiaries and/or any particular class of beneficiaries;
  • maximise the value of your estate through effective tax planning; and if needs be,
  • provide for an effective business succession plan or the winding up of a business upon your death.

To effectively instruct your lawyer you will need to provide:

  • an overview of your family circumstances and a list of all your family members (full names and dates of birth) and an indication of whether you would like them to benefit from your estate and if so, to what extent; and
  • a detailed list of your assets and liabilities which will assist in determining the overall value of the estate, how and when assets should be distributed, and the appropriate structure for your will.

You will need to provide a precise description of your assets including their location and value, as well as advising whether they are held individually or jointly. If you intend to make specific gifts through your will (such as items of sentimental value etc) then those items should be clearly identifiable and adequately described in your will.

Further, it is also important to highlight to your lawyer any existing conflict between family members and identify any person who you think may claim against your estate. In particular, blended families are common nowadays and require careful consideration as there may well be competing interests between past and current partners, as well as biological children and stepchildren.

Furthermore, choose your executor and trustee carefully. He, she or they will be your personal legal representative/s upon your death. For simple estates, a spouse, child or children (or combination) is usually appropriate but be aware of potential conflict where a person (often a child) feels overlooked for this role and disputes an appointment etc. However, for more complex estates (particularly those with business interests or which will have ongoing trusts created by your will, it may be preferable to appoint a professional such as an accountant or a lawyer.

Finally, consider your superannuation carefully. Death benefits (comprising the superannuation account balance and any life insurance payments) are usually paid to a person determined by the fund trustee, or in accordance with a Binding Death Benefit Nomination (BDBN). Most funds allow members to nominate their intended beneficiaries through a BDBN. Without a valid BDBN, the beneficiaries may be decided by the fund trustee and may not reflect your wishes.

The above information is by no means comprehensive in respect of the multiple issues which may need to be considered. Whilst no two people have the same circumstances, the take-away message ought to be that effective estate planning takes time and careful consideration. Often, estate planning is a case of you will get what you pay for and if you are simply after a low budget will then you may in effect be ‘saving money’ only to unintentionally be setting up your executor and/or intended beneficiaries for a costly dispute after you die.

Finally, if you have read this far and think that you will need some practical advice about your situation, then now is probably the time to get in touch. Austral Legal can help and we offer an initial discounted 30-minute SmartMove appointment for $80 by phone or in person at our office to discuss your situation.

Bookings can be made online or simply by phoning the office (08 9745 9550). Once we have a handle on what is required, we may well be able to offer a fixed fee for any further legal services, giving you cost certainty from the start. Austral Legal. Practical advice.