INSIGHTS WITH EVALESCO
Planning for the future is important for whatever life stage you’re at. Estate planning is a major part of your overall financial plan and is so much more than just writing up a will. We look at some of the common questions around estate planning and how it can help you and your family.
What is estate planning?
Estate planning is the process of setting up your estate so your assets such as property, shares and insurances pass onto your beneficiaries in the most efficient and effective way. This may involve a variety of estate planning strategies, such as establishing trusts, restructuring your investments, setting up superannuation beneficiaries and reviewing your life insurance policies.
Why is estate planning important?
Estate planning is a way to ensure that if you were to pass away your family assets are distributed to your nominated beneficiaries according to your wishes. By setting out exactly how you want your estate to be structured and distributed, you can bring peace, security and clarity to your loved ones. Plus, any likelihood of disputes between family members or loved ones will be minimised.
What’s the difference between estate planning and a will?
Both estate planning and a will give instructions to your loved ones on how you want your assets to be distributed when you’re not around but a will is only one part of the jigsaw piece in estate planning. Essentially, a will sets out what you want to leave to whom as well as guardianship details, such as who would look after any underage children or financial dependants. It primarily covers assets you own in your personal names and any dependants you look after.
Estate planning, on the other hand, covers a broader scope and goes into more detail. It deals with family assets that may be held in a company or trust and how they will be structured, distributed, or managed upon your death. An estate plan seeks to ensure the continuity of control over assets and businesses that may not be in your personal names but that you control so they can continue on even when you’re gone. An estate plan could also include identifying who will have authority to manage your finances and businesses if you are no longer able to control them due to mental incapacity or death. It can also set out how family assets will be managed if your children are too young or not mature enough to inherit them upon your death.
What does estate planning cover?
Estate planning generally covers the structure, distribution and transfer of all family assets, which may include your investments, superannuation and life insurance. It would appoint the people who will look after your estate – the executor of your will – who will ensure that the instructions are followed, including dealing with the control of any trusts. Most estate plans also include other matters relevant to the end of life, such as powers of enduring attorney, powers of enduring guardianship and advanced health directives. This ensures that, if you’re unable to make decisions for yourself, someone can make them for you, according to your wishes. The goal of estate planning is to give you peace of mind, so that you and your loved ones are ready for whatever may happen—be it illness, accident or death.
Who would benefit from estate planning?
There’s a common misconception that estate planning is for the wealthy, however anyone who controls assets such as shares, property, jewellery, has a superannuation fund or a life insurance policy would benefit from having a plan in place that deals with how these should be distributed and who they should go to once they. Likewise, anyone who has financial dependants such as children, parents, a spouse or other family members would also benefit from estate planning to ensure those who depend on them continue to get the adequate care into the future. Also, anyone who has a direct or indirect share in a business would benefit from an estate plan that outlines what should happen to the control and management of that business if they are no longer around.
Family estate planning strategies for blended families
Blended families are becoming the norm in Australia as divorced parents are joining to form their own, unique unit. But unfortunately family estate planning for blended families can be complicated. Usually, there are children, spouses, properties and assets from at least two marriages to take into account – all bundled together in a web of complex and fragile relationships. We are always here to help no matter how complicated (or uncomplicated) the scenario. Only assets under a particular person’s estate will be dealt with under their will. Any assets outside of a person’s estate cannot be distributed between various children or different partners. That’s why it’s so important to leave clear, unambiguous plans. To prevent future challenges and disputes, family estate planning takes into consideration how assets in blended families can be distributed to ensure legal and financial obligations are met.
Estate planning and preparing for the future
It can be tempting to put off estate planning for a rainy day. Most of us don’t want to think about illness, accidents and death. But, the sooner you manage your affairs and obtain professional financial and legal advice on your estate plan, the sooner you’ll be able to relax—and more thoroughly enjoy the present with your loved ones.
Please reach out to your adviser if you have any questions relating to this article, we’d be happy to help. After all, family estate planning strategies can help you prepare your family for the unexpected. With the right structures in place, the assets you’ve spent your life building are more likely to go to the people you intend, in the right way, with maximum benefit and minimal conflict.
SHARE OUR INSIGHTS
Share on Facebook
Share on Email
Share on Linkedin
Sign up to get the latest insights with our newsletter delivered straight to your inbox
We believe the true value of financial advice isn’t found in dollars and cents (although this is important too!) but in the peace of mind a financial plan can provide. It’s knowing where you want to go and how to get there, with a dedicated team behind you every step of the way.
We know the impact of good holistic financial advice can make and we have the life experience, technical capability and quality support team that can make that difference for you. We’ve empowered over 1000 families through the delivery of great financial advice, to be healthy, wealthy and happy.
The amount of super you’ll need when you retire depends on your big costs in retirement and the lifestyle you want. The Associate of Superannuation Funds of Australia (ASFA) estimates for a single $44,224 a year and for couples $62,562 a year is how much you may need. This is only an indicator and our advisers assess everyone’s individual circumstances.
The fees we charge for financial advice is only a fraction of the value we derive for our clients, meaning our clients are always better off after seeing us. Rarely do we encounter a new client invested appropriately for their needs, with adequate risk protection, structuring and estate planning provisions in place. Even small tweaks to a financial plan over a long period of time can result in drastically better outcomes for our clients which eclipses the fees of the financial advice. Additionally, you can opt-out of an ongoing fee arrangement at any time.
In our discovery meeting with you our advisers discuss the initial advice fee and the ongoing fees associated with our services.
After our initial phone call to discuss why you are seeking a financial adviser, we arrange a discovery meeting that outlines what is important to you, your current position, our areas of advice, our approach. We then present a Statement of Advice (SoA) to discuss your goals and our recommendations and go through the steps of how to proceed to the implementation stage. After signing the SoA, we discuss your questions, get you to sign the authority to proceed and complete any application forms before implementing the recommendations detailed in the SoA.
One thing to consider is the interest rate on your home loan in comparison to the rate of return on your super fund. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future
The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Evalesco Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance. Copyright © 2019 Evalesco Financial Services. All rights reserved