Estate Planning: Top 5 things you need to know now

By Norman Howe | More Articles by Norman Howe

If something happens to me, who will look after my family?

What will happen to my assets when I’m gone?

What about my children?

These are uncomfortable questions that haunt many of us. The idea of estate planning is often sensitive and scary, which causes people to put it off for as long as humanly possible because truthfully, nobody wants to spend time thinking about what happens when they’re no longer around.

The unfortunate reality is that the trigger to look at estate planning often occurs when someone close unexpectedly passes away or gets diagnosed with a life-threatening illness. This is particularly true for people in their late 30’s or early 40’s who watch helplessly as a financial mess unfolds because there was no proper estate planning or up to date Will.

Even seemingly trivial things like checking you’ve got the right super beneficiary in place can be life changing, as you may be unknowingly leaving a large amount of your wealth to an ex or to someone who is no longer a part of your life.

Sorting out estate planning is something of an art form these days and can become quite complex if you have a business, an SMSF, a corporate structure or a family trust. Getting your estate planning sorted now will offer you invaluable peace of mind and let you sleep knowing the money and assets you have spent your entire life working for is going to the right place.


1. Get educated – what you need to know

Before embarking on your estate planning journey, you need to know some key information before you start.

Your Will is important, but did you realise there are four estate planning documents which play a crucial role in figuring out your estate planning strategy?

  • Your Will design
  • Enduring Power of Attorney
  • Enduring Medical Guardian Attorney
  • Super Fund Binding Death Benefit Nomination

Educate yourself on your own situation by identifying:

  • Who your super fund beneficiary is and is this correct?
  • Who gets your life insurance policy money if you died?
  • Who is the successor of your family trust?
  • What would happen to your private company shares?
  • If you have an SMSF and you die what happens?


2. Why you might need a specialist wealth adviser and experienced estate planning lawyer

It’s critical to seek out estate planning specialists because having the right estate strategy is one of the most important decisions of your life.

A wealth adviser will introduce you to many different strategies when it comes to allocating your wealth to ensure there are no loopholes or inconsistencies that could interfere with your intentions. One strategy you will become familiar with is called ‘gifting.’ This is important and your adviser will help you decide if you want to ‘gift’ your wealth with no strings to your heirs (which make this gift vulnerable to creditors or a potential family law claim) or instead make an ordered intergenerational transfer of family wealth to the next generation.

Having a wealth adviser and estate planning lawyer on board allows you to have expert advice at your fingertips and knowing you and your legacy is in good hands, is irreplaceable.


3. Understand what Wills do and don’t control

Did you know your Will doesn’t necessarily control your super entitlements or personal life insurance unless everything is aligned with your estate strategy and Will wording?

If you jointly own your home, did you realise your Will may no longer control this asset as it might simply pass to your partner?

How about if you have a business and a family trust, how well does your current Will take care of this if you died?

The message here is your wealth adviser takes all of this into account when developing your estate strategy and often the most valuable assets actually sit outside the Will (in corporate structures or family trusts). Careful strategic planning and legal advice is essential to ensure your wishes are carried out.


4. What type of Wills are there and what type of Will works best?

This is a loaded question, and ultimately depends on how much you want to protect your family’s wealth and if you have company or trust structures.

Cost is a notable factor, as Complex Wills with Testamentary Trusts are cost more but knowing you have the right type of Will design, is an investment that rewards in peace of mind.

Simple Wills

Simple Wills are great for singles or families who have modest assets, don’t run a business and are happy to gift family assets to their beneficiaries as they do not need the asset protection a Complex Will provides.

For example, if you have children and want them to each receive an equal portion of your estate (family wealth), then a Simple Will may be right for you.

Complex Wills

Complex Wills are a must if you have significant assets and are ideal for passing on your family’s hard-earned wealth to your kids in a controlled way.

This approach is often called an intergenerational transfer of wealth.

One of the main benefits of Complex Wills is they generally have Testamentary Trusts built into the Wills’ design to provide asset protection for beneficiaries from creditors and family law claims.  Also, Testamentary Trusts can be tax friendly as minors are able to receive income up to the adult tax-free threshold.

If you want to protect family wealth from any unscrupulous partner of your heirs, then your Testamentary Trust(s) can be designed to be “bloodline” and exclude any nonfamily member from being a Beneficiary.

You should also use a Complex Will if you have:

  • a previous spouse or a blended family
  • a business – Company or Family Trust
  • SMSF
  • a child with special needs-Special Disability Trusts


5. Know the best time to take action

So, when should I start my estate planning?

Call an adviser today and do you and your family a favour.

Don’t put off something that will have such a profound impact on those you love most.

About Norman Howe

Norman Howe is the founder of Strat X Advisory and has been involved with wealth management for over 30 years. He primarily works with SMSF trustees, SME owners and family groups helping them achieve wealth-life goals. As a high-level adviser and strategist, Norman specialises in SMSF, business restructuring, Estate Planning and Wealth-Life planning.

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