As we sail through life's journey, preparing for the unexpected and the final destination is as crucial as planning the voyage itself.
This preparation, known as estate planning, is a process that ensures the proper management of your finances and health in the event you become incapacitated, and the distribution of your assets upon your death.
It's more than making a will. It is about securing your family's future, easing potential burdens, and minimising tax payable by your estate.
Given its importance, here's a quick guide on the top 10 things you should consider when making estate planning arrangements.
Create a will: Your will is the cornerstone of your estate plan. Without a valid will, your assets may not be distributed as you wish. Regardless of age, everyone should have a will.
Choose an executor: This individual will deal with your estate and carry out your wishes as per your will. You should choose someone that knows you well, who is responsible and trustworthy.
If your affairs are complicated, you may be better served by choosing a professional such as your lawyer.
Beneficiary nominations: Your will should clearly outline who your beneficiaries are and what they are to receive. You can elect to simply divide your estate amongst them equally, or you can make special provision for one or more of them.
Consider a testamentary trust: Considered the "gold standard" in estate planning, a will that establishes one or more trusts upon your death can offer significant tax advantages and asset protection benefits for your chosen beneficiaries.
Choose a guardian: If you have children under 18, you should nominate someone you trust to be their guardian in the event you and your partner die.
Update your will: Life events like marriage, divorce, or the birth of a child can alter your estate plans. Regular updates ensure your will reflects your current wishes. Even if there haven't been any major life events, you should still review your arrangements every five years or so.
Assets not covered by your will: Superannuation funds, jointly owned assets, or trust-held assets may not be dealt with effectively in your will. You need to plan for these separately.
Enduring Power of Attorney: Nominate someone as your attorney. Your attorney is the person you nominate to manage your legal and financial affairs, while you are alive, in situations where you are no longer capable.
Enduring Guardian: Nominate someone as your guardian. Your guardian is the person you nominate to make decisions on your behalf in respect to your health and living arrangements in situations where you are no longer capable. Be careful not to assume your 'next of kin' can assume that role.
Possible contests: Lastly, if you anticipate a contest to your will, discuss preventive measures with a lawyer who specialises in contested wills and estates.
In summary, estate planning is essential to ensure your loved ones are taken care of when you're no longer around.
It provides a roadmap of your wishes, alleviates family burden, and helps mitigate any potential legal hurdles.
As you navigate the waters of estate planning, remember to seek legal advice to ensure your decisions are informed, valid, and ultimately, that your estate sails smoothly to its intended port.
For more information go to rmblawyers.com.au or call 1800 681 211.