What is Estate Planning?

In summary – Be sure to consider the ownership of estate and non-estate assets.

Estate planning is how you ensure that your assets are distributed or passed on in a way that you want following your death. It also involves the implementation of documents during your lifetime that allow others to make decisions on your behalf when you are not able to make decisions for yourself, usually due to incapacity and ill health.

Guide to assets that do or don’t form part of your estate.

All assets kept in your name are considered to be part of your estate. Examples of the assets in your estate include:

·       Cash

·       Real property

·       Bank accounts

·       Motor vehicles

·       Personal items such as artwork, furniture, and jewelry

Clients frequently believe that having control over an asset equates to ownership. This may result in inadequate estate planning or legal advice. The following are some instances of assets that do not necessarily become a part of your estate:

·       Life insurance

·       Trust property

·       Superannuation

·       Company property

·       Property held as joint tenants such as real property, bank accounts, and shares

Correct ownership must be established before a plan can be put in place specifying how you want those assets handled after your demise. Documents like nominations, deeds, agreements, or transfers may need to be prepared to do this.

Here are some wise suggestions to keep in mind –

The risk associated with non-binding nominations and superannuation.

Since superannuation does not automatically become a part of your estate, you need to create the necessary binding death benefit nominations to either direct superannuation proceeds to your estate or to specific beneficiaries.

If you have set up a trust in your Will, you may wish to nominate your estate, or more specifically your Legal Personal Representative as the beneficiary to your super funds.

Getting legal or tax advice is crucial when creating superannuation nominations, to ensure equalization of distributions and minimize tax, as not all beneficiaries are taxed the same.

What happens to jointly-owned property when a joint owner passes away

When the property is held jointly with another person, the surviving joint owner may inherit the deceased joint owner's portion of the property automatically. You should think about changing the ownership of the property if you want to be able to manage your share through your Will.

Think about appointing an enduring guardian and creating an Enduring Power of Attorney

You should think about putting in place documents that can be depended on to help you during your lifetime at the same time that you make arrangements for the succession of your assets and the completion of your Will. An Appointment of Enduring Power of Attorney, which deals with decisions to be made regarding your finances, and an Appointment of Enduring Guardian or medical power of attorney, which deals with decisions regarding your health, are two essential legal papers. You should appoint someone who can make decisions for you aligned with your values and wishes.

Benefits of Establishing an Estate Plan

When your family and loved ones must make decisions on your behalf or when it comes time to administer your estate, having a solid estate plan in place will be crucial.

Simply put, having an estate plan in place:

·       Will offer advice to your family members;

·       Will make sure that your assets pass as intended (as much as possible);

·       Will guarantee that the medical care you receive is handled following your choices;

·       May save your estate a lot of money; and

·       Can minimize the risk of family disputes and stress.

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Please contact (03) 9028 7603 or info@webwills.com.au and mention this article for a no-obligation session with one of our experienced estate planning lawyers if you’re interested in setting one up.