13 August 2018
Although our passing can be an uncomfortable subject to talk about, estate planning is an essential process for ensuring your wealth is distributed in the way that you intended, reducing the burden on you and those you care about.
Estate planning is about more than just Will preparation. It’s also not just for the rich or older people. It’s for everyone who has assets to pass on, including the car, house, superannuation, life insurance, investments and more.
Below are four key reasons for why it’s never too early to develop an estate plan.
1. Protect Your Assets
The main component of estate planning is designating heirs for your assets. Without an official estate plan, your estate will be distributed under government legislation, and not necessarily in accordance with your preferences.
Estate planning ensures the passing on of your assets, including consideration of:
- Your children, grandchildren and spouse
- Anyone you intend to leave out of your Will
- Businesses you may own
- Self-managed Superannuation
- Family Trusts
2. Protect Your Children
In the unfortunate event that both parents pass away, an estate plan can give you peace of mind that your children will be taken care of in a way that is approved by you. For example, it is common for people to elect grandparents as guardians for their children, if they’re willing and able to take on the responsibility.
3. Stop Your Heirs Overpaying Taxes
An important part of estate planning is to look at the tax minimisation opportunities available and include these within your estate plan. This means that the greatest amount of your estate will be passed on to your loved ones with minimised taxes and involvement of the Courts. Without an effective estate plan in place, taxes and costs can significantly reduce the amount that your beneficiaries are left with.
4. Prevent Family Feuds
It can be a disaster if your family gets into conflict over your estate. With an estate plan, you can elect an executor who controls your finances and assets if you become unable to do this yourself. It’s recommended that you update your estate plan and Will every five years, so that details of your executor and beneficiaries are up to date. It’s also a good idea to advise your executor of the whereabouts of the original copy of your Will.
Conversations about estate planning aren’t always comfortable or easy, but they are important. If you want to have a chat to find out more about what you need to do to future proof your legacy, please get in touch.