We talk a lot about the importance of estate planning, so I thought it might be good to share an article on this topic by one our friends, Bhavesh Mistry, Principal at the award-winning MistryFallahi Lawyers & Business Advisors.
The Importance of an Estate Plan
Estate planning is more than just preparing a valid will. It’s about considering yours and your beneficiaries personal and financial circumstances, considering your current assets from both a legal and financial perspective and then devising an estate plan to ensure that your family and loved ones are protected now and in the future.
Thinking about your Will and your estate can be confronting and unsettling yet it is crucial to ensure that your loved ones are well taken care of upon your passing.
A well-structured Will and estate plan that is tailored to your individual needs will protect your assets and legal interests so that your beneficiaries can enjoy the full benefits of your estate as you have envisioned and intended.
While you cannot predict the future, taking the initiative to plan for unexpected circumstances now will affirm the future financial and personal security of the people you care about.
Personalisation of Your Estate Plan
There is no standard method for determining your estate plan. Once we have considered your financial circumstances and your asset portfolio, a tailored estate plan will be created to meet your needs in order to protect your assets, take care of your loved ones, reduce the risk of your estate being contested and finally to deliver you the peace of mind.
The implementation of a legal advised estate plan will;
- Ensure that the ownership and control of your assets passes to your intended beneficiaries in the right proportions;
- Protect your assets in trusts for minor beneficiaries or beneficiaries who may not be able to manage their inheritance to ensure intergenerational wealth transfers;
- Ensure that your superannuation or benefits under an insurance policy are considered and valid nominations have been made;
- Ensure that your estate is administered in a cost effective and timely manner;
- Minimise tax consequences on your estate and beneficiaries; and
- Protect assets if a beneficiary is involved in any legal difficulties (for example, bankruptcy or divorce) or under a legal disability.
The Negative Impact of Intestacy
In the event that you pass away without a valid Will, your estate is legally considered intestate. Intestate estates are handled by the Courts and government using a fixed formula to administer and distribute your assets.
Failing to implement an estate plan for your loved ones can be irresponsible and troublesome as your estate that encompasses your assets and wealth that you have worked hard to accumulate and maintain will run the risk of not being distributed in accordance with your wishes. Your estate will incur significant legal costs for your family or result in your estate being contested in Court. Ultimately, the people who you care for or wish to provide for may end up not receiving a benefit from your estate or may receive substantially less as a result of your estate incurring significant legal costs.
In addition, intestate estates require their dependents to apply to the Courts for a share of your estate. This process can be costly, lengthy and extremely stressful.
By creating your estate plan today, you will ensure that your estate is distributed according to your wishes and that your loved ones do not have to undergo any unnecessary hardship and administrative burden.
Pitfalls of a Simple Will
In most cases, the implementation of a “simple Will” generally lead to your estate being problematic, time-consuming, costly and run the risk of exposure or loss for your family and loved ones.
You want to make sure that your family is not under financial pressure or debt in the event of your passing. Depending on your financial and health circumstances, you may wish to consider obtaining life insurance after obtaining proper financial advice.
Have you Appointed an Attorney or Guardian?
Have you considered what would happen to your family or business if you become sick, injured or unable to control your investments or your business? Have you put in place strategies to ensure your interest for your family and loved ones are protected? It is important that you legally appoint a Guardian with the right capabilities to care for your minor children or an Attorney to manage your personal and business affairs.
Keeping Your Will Up To Date
Your Will reflects your life intentions and personal circumstances. When you experience any significant life changes, it is important to update your Will and estate plan to ensure your testamentary intentions are accurately reflected so that your executors have a clear indication of your circumstances at the time of your death.
Regularly reviewing your estate plan with trusted advisors whom you have an ongoing relationship with is paramount. Changes in your circumstances that may affect your estate plan could include;
- Whether you have settled all financial and property issues with your former partner;
- Whether you have or adopt children or whether your beneficiaries have children;
- There being a major change in your financial affairs;
- You starting a business or are a director of a company;
- The purchase or disposal of any assets, considering the structure of how assets are held;
- A change of name, or anybody named in the original Will changes theirs;
- Whether you got married, divorced or re-marry;
- Having a de facto partner or someone financially dependent on you;
- Death or incapacity of any of your executors or beneficiaries;
- Considering the effect of holding property as joint tenants or tenants in common;
- Consideration of the exposure to Capital Gain Tax for your estate;
- Whether you have entered into an agreement/deed or provided a personal guarantee which may affect the distribution of your estate;
- Whether you have continuing debt obligations which your estate will be liable for;
- You reconsidering how your estate is to be distributed; and
- You experiencing serious health issues.
We offer ongoing professional reviews of your Will and estate plan that will identify the complexities in your estate. We also advise you of the issues you should address and provide you with strategies to assist you in accumulating wealth and properly managing your estate.
If you would like to know more about estate planning please contact me email@example.com