Estate Planning Basics

Many people think 'estate planning' doesn't apply to them - the word 'estate' can have connotations of vast acres of land, sprawling mansions, and millions of dollars in Swiss bank accounts. While this definition may apply to some, for the rest of us, estate planning can be as simple as having a valid, up-to-date will.

Basic estate planning involves arranging your affairs in such a way that they benefit you today as well as your beneficiaries should you die.

More complex estate planning can involve setting up the best ownership structure for your assets, examining the taxation position of family members, developing a succession plan for ownership of the family business, or even family trusts. Taxation issues, particularly the effect of Capital Gains Tax on the family's finances, is another major consideration.

Everyone can benefit from estate planning, regardless of the amount of money you have or your family status. In particular everyone should at least have a valid will, which should be reviewed every three years or so, or on major changes such as marriage, divorce or the birth of children or grandchildren.

No matter what your personal circumstances are, estate planning aims to place your financial affairs on the strongest possible foundation and to ensure maximum effectiveness in the transfer of wealth to your beneficiaries.

It's a logical extension to the financial planning process. Having put your financial plan into place to ensure your family's future financial security, it doesn't make sense to leave that security open to the interpretations of taxation laws, or having your estate disbursed in a way that you wouldn't have wanted.

Another aspect is the potential effect of second or third marriages and/or de facto relationships, particularly when there are children from both present and previous relationships. The family structures which develop require careful consideration of the ownership of family assets and the conditions of the will.

Other issues covered by the estate planning process include:

  • enduring power of attorney letter- appointing someone to look after your affairs;
  • discretionary or family trusts, established for specific purposes;
  • testamentary trust - established to reduce a family's tax liability on
  • the death of a breadwinner; and appointment of trustees and/or executors.

For estate planning advice from our friendly staff please telephone 1300 73 PLAN. We will be happy to assist you.