The idea of estate planning can sometimes seem strange, as it is something that doesn’t typically come into effect in your lifetime. It may seem hard to see the direct benefits, but the same argument could be said for insurance in many ways.
In fact, estate planning does matter a lot, particularly to your loved ones after you depart. It can also be incredibly important for managing your care and assets when you get older, or if you were to become incapacitated.
Yet many Australians – some estimate one in two – don’t have a valid and up-to-date Will or estate plan in place.
Some make use of a DIY Will kit rather than contacting a solicitor, which in itself can lead to problems down the track.
In short, there are three crucial issues that you should never ignore while thinking of your Will and estate planning.
Is Your Will Valid and Up-to-date?
Once you are of legal age (18 years and above) with some assets, then you should have a Will. These assets don’t need to be substantial, and may just include items of sentimental value, superannuation, and any associated life insurance policies, but these are still assets that need legal protection, to ensure they go where you intend them to go.
Creating a high quality Will is not as costly as you may think, and when you seek the assistance of an experienced, trustworthy solicitor, it isn’t time-consuming either.
If you die without a Will, your assets and estate will be distributed according to the state and a predetermined formula. This can mean assets being passed on to unintended beneficiaries such as estranged relatives and former partners.
When you set up your Will and Estate Plan, you’ll be able to determine who will receive your assets, and estate, as well as other important factors such as guardianship for children.
What are the Tax Implications?
In Australian law, we don’t have the typical ‘inheritance tax’ that is known in the UK and other parts of the world. However, this is not to imply that the beneficiaries of your assets cannot be charged other forms of tax when your estate is administered.
If you seek the advice of an experienced Wills and Estate Planning solicitor, they can advise on tax implications and legal methods of minimising the burden, as well as protecting your loved ones.
This may involve setting up a Testamentary Trust as well as other considerations.
Have You Set Up an Enduring Power of Attorney?
It is also important you set up an Enduring Power of Attorney as well as a general Power of Attorney as part of your Estate Plan.
An Enduring Power of Attorney provides legal power to a specified person to make financial and healthcare decisions on your behalf if you become incapacitated.
You should seek advice from a suitably qualified legal professional to assist you in your Will and estate planning.