When it comes to planning your estate, it’s common to believe that you only need to write a will, and that a will is a simple document listing your assets and who you want to receive those assets when you die. Right?
Estate planning is much more than a will, and even the will itself is often a complex document.
There are 7 fundamental elements of estate planning that everyone should consider – especially as with rising house prices and superannuation funds most Australians will have significant assets in their old age.
- Who will you choose as your executor? This is the person who will administer your estate and follow the instructions of the will. This person should be trustworthy and able to fulfill the duties required of an executor. An executor who fails to act in the best interests of the estate can be held personally liable and removed as executor by the court.
- Protecting your children from a previous marriage. As blended families become increasingly common, an important consideration is to protect your children from previous relationships. In the event that you pass away before your current spouse/partner, that person is not under any obligation to provide for your children. Therefore this should be factored into your planning.
- Protecting assets from lawsuits, divorce and bankruptcy. It can be disconcerting to think that the assets you’ve spent a lifetime accumulating can be decimated by your heirs being sued, divorced or facing bankruptcy. But it is possible to protect your assets from these scenarios with the correct structuring.
- Create oversight for children/grandchildren who many too young or inexperienced to manage an inheritance. If you are worried that significant assets being passed to heirs that may not know how to manage it responsibly, you can add oversight into your estate plan to help them.
- Avoid paying unnecessary tax. Good structuring can help avoid paying more tax than is necessary.
- Provide for heirs with special needs. It is possible to provide for children or grandchildren with special needs, such as disability. You may be concerned about their future care once you have passed away, for example. It’s possible to specifically provide for this situation.
- Discourage challenges to your estate. Even the most carefully drafted will may be challenged in court by your heirs. But it’s possible to prevent this as much as is possible. The best way to do this is to see a specialist in wills and estates, who understands the law and can help you draft documents that are fair and reasonable while taking all your wishes into account.
It’s not always possible to provide for every what-if scenario that might occur in the future, but it is possible to preempt many of them with good advice and careful planning.
Our clients walk out of our office with a weight taken off their shoulders because they’ve taken care of their loved ones should the worst happen. If you would like to experience the same, call us today!