Estate Planning
Estate Planning is the organising and structuring of your financial affairs during your lifetime, to ensure your assets are protected for you and your heirs. The concept of Estate Planning includes the making of a Will, the appointment of an Enduring Power of Attorney (EPA) and in certain cases, the establishment of a Testamentary Trust.
Will - a Will is a document which sets out the disposal of assets in your name, upon your death. It appoints the Executor(s) that carries out your instructions and also names the beneficiaries whom you wish to inherit your assets.
Enduring Power of Attorney (EPA) - an EPA is a legal document appointing an organisation or a person(s) to act on your behalf, even if you may subsequently become either physically or mentally incapacitated. It can be held in a dormant state and only activated upon specific instructions from yourself or on written medical evidence. The designated Attorney can effectively do anything that you are legally able to do - for example, make decisions for you, sign documents, manage your investments and affairs.
Medical Powers of Attorney may also be designed, which specifically relate to decisions regarding the donor's medical treatment, in the event they are incapable of making the required decision.
Testamentary Trust - a Testamentary Trust is effectively a Family Trust, incorporated in a Will and only comes into being on the death of the Testator. Like a Family Trust, it allows the Trustee to direct financial benefits to your beneficiaries with greater flexibility and in a tax effective manner. Generally, a Testamentary Trust will not be required if assets consist largely of jointly owned assets (which pass directly to the survivor), assets owned by a Family Trust, superannuation benefits or life insurance proceeds.
Advantages of a Testamentary Trust include -
- Protecting assets from divorce, bankruptcy proceedings and/or spendthrift beneficiaries;
- Capital gains and future income tax benefits;
- Providing for beneficiaries, usually children who are disabled, who are unable to manage the proceeds from an estate themselves;
- Protecting assets for specific beneficiaries where multiple families exist
Any decision regarding the establishment of such a Trust, must involve a thorough evaluation of the needs of your family and their financial requirements.
We can offer a referral service to experts in the field of Estate Planning to assist in structuring an effective strategy for your specific circumstances.
Superannuation Binding Nominations
Superannuation benefits upon death of the Fund member, are often treated separately from their Will, although still representing part of their Estate. Members of superannuation funds are able to control who will receive those benefits in the event of death, via a Binding Nomination. A Binding Nomination is notice in writing from the member nominating specifically who is to receive their death benefit - a dependent, a non-dependent or their legal personal representative. If the last of those options is nominated, the benefit is then distributed in accordance with your Will or the laws of intestacy.
A Binding Nomination is valid for three years from the date it is made and needs to be renewed to maintain that validity. However, it can be altered at any time. Alternatively, a Non-lapsing nomination can be made which, whilst still able to be changed, is not restricted by a time limit.
Estate Planning is a combination of directing assets to your nominated beneficiaries efficiently, as well as tax planning and minimising tax on the movement of assets after death.
