Estate Planning

Estate Planning – 5 Things to Remember

Nobody likes to think about it, but one day we are all going to die. You probably have at least a vague idea about how you would like your assets, or your ‘estate’, to be divided amongst your family, loved ones and other potential beneficiaries. But you won’t be there to oversee what happens. Careful estate planning can avoid financially costly mistakes for your loved ones, not to mention family arguments.

There are a few key things you should consider carefully when you are making plans for a future without you.

1 – The Will

Shockingly, only about 50% of Australian adults have a valid Will. Your Will is the cornerstone of any estate planning, whether you have a large number of assets or not. A valid Will is essential to ensure your family and friends receive your assets, and not the government.

If you do have a Will, review it regularly to make sure it reflects your circumstances. This is particularly important if you have married, divorced, had a child or grandchild, or your assets have substantially changed.

2 – Executors

Administering an estate is a major undertaking. When choosing an executor, look for someone who is organised, competent, trustworthy and honest. It is also best if they are an unbiased party.

Nominating an ‘alternate’ executor is also a very wise move. That way, should your first executor be unable to undertake the role for whatever reason, your will can still be disbursed efficiently.

Always check with the person you are nominating to make sure they are happy to undertake the role. You should also make sure they are aware of your wishes, and know how to contact the solicitor who holds your will, as well as your accountant and your financial planner.

3 – Other Assets

You may be surprised to know that there are some assets which fall outside the scope of a Will, even though they may form a substantial portion of your estate.

Any assets jointly owned, for instance, your family home, will automatically pass to the surviving owner.

Your superannuation is the other major asset you may hold which can fall outside your Will. If you have provided your fund with a binding death benefit nomination, that person will automatically receive the payment, whether or not they are mentioned in the Will. If you have not completed a Binding Nomination, the assets in your super will be distributed under the instructions in your Will. Should you be interested in talking about the relative benefits of each option, a good financial advisor can help you.

4 – Fair and Equitable

Anyone with ‘reasonable grounds to believe they have a claim on your estate is able to contest your Will, whether or not they have been mentioned. The definition for reasonable grounds is very broad, and essentially encompasses anyone who has been dependent upon you in any way during their lifetime.

Making a claim against an estate is costly to the estate, which is usually required to pay costs, and if the claim is successful, it can significantly erode the value of the estate. Not to mention, rob those you wanted to receive your assets of their full inheritance.

Think carefully about all potential claimants, and make provision for them in your Will. Even if it is only a nominal bequest. This at least shows they were considered and not ‘forgotten’. If there is someone you do not wish to receive money from your estate, it is advisable to leave a witnessed statement as to why they were omitted. This can help avoid nasty legal action in the wake of your passing.

5 – Expert Advice

There are Will Kits available online and even through newsagents. But if you have any assets at all we cannot stress enough how important it is to seek proper expert advice from a lawyer who specialises in estate planning. General lawyers will not always have specific knowledge in this field. This is particularly important if you have a complicated family situation, or high value assets to distribute.

If you need to draw up a Will, or amend an existing one, and would like some advice on the best way to go about it, Manly Financial Services have the expertise to assist you in making informed decisions. Give us a call on (02) 9976 3388 or contact us via the below link.

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