With an ever-growing, aging population estate planning is becoming a hot topic of conversation around Australia. It’s not easy approaching your own mortality and looking to your family’s future without you however it is one of the most important things you can do to help them after you pass away.
According to statistics from the NSW Trustee and Guardian over 45% of Australian’s die without a valid Will each year. A person’s Will sets out how they would like their assets distributed should they pass away. Without a valid Will the Public Trustee will take over your estate and distribute the assets and funds as they deem appropriate. This can be a time consuming process but without a valid Will there is no other way for your accumulated wealth to be distributed.
When should a Will be updated
Generally a Will should be updated whenever a significant life event occurs. These include, but are not limited to:
– Marriage/Divorce not only your own but also your child’s
– The addition of children or grandchildren
– Significant financial changes
– Separation from a spouse
– Loss of a spouse
– Poor health
– The degrading health or death of the executor
It is important to seek legal advice when considering your circumstances to ensure your assets are distributed as and where you wish.
The Executor of your Will
The executor of your Will is responsible for the administration of assets upon your death and distribution to the intended beneficiaries. It is important to consider the right person who may not be the closest person to you. An executor needs to have the skill set to make hard, logical decisions. They also need to have the time required to deal with the enormity of the task and have the ability to perform under pressure should confrontation arise between beneficiaries.
Estate Planning for Business Owners
Family businesses account for 70% of all businesses in Australia. Planning for the next generation transitioning into the business, or alternatively selling the business in the future, can be time consuming and severely hindered if not planned for. There are many considerations when looking at succession planning for a business which include:
– The age at which you intend to retire
– If the business can run without you in the management role
– The next level of ownership be it intergenerational or a new owner, or potentially liquidation
– Unplanned transition such as serious illness or death
It is important to consider your estate planning requirements and put your intentions in writing. Without a plan considering your business’s future it is likely that your business will suffer.
Many people account for superannuation in their Wills however this can be a very costly mistake for potential beneficiaries. For your superannuation to go to your estate a valid binding death benefit nomination needs to be in place directing your super as such. However it is not always this simple. For self-managed superannuation funds a nomination of any type needs to be allowed by the trust deed and each deed has a different interpretation of how and what format a binding nomination needs to be. It is important to carefully read and understand the provisions of both the trust deed and SIS law in order to make a valid nomination.
If you would like to discuss your estate planning options please contact our office.