Generational wealth transfers are growing in Australia. According to the Australian Financial Review, Australia is…
The short answer is yes. You need an estate plan.
An estate plan is less about mansions and riches and more about your Will and organising your assets to be distributed the way you want.
In the event of your unfortunate and untimely passing, it would be best if there were specific instructions about where and to whom your remaining assets should go – everything from your savings, super, cars, real estate, and more.
If you happen to pass without an estate plan, most likely, intestacy rules will apply and Letters of Administration (a court order that allows an estate to be administered when there is no will) can be applied for by a surviving relative. Afterwards, your assets will be distributed as the government sees fit—not necessarily exactly what you want to happen, especially if you want it to go to your family, a loved one, or a cause you believe in. You have to put all that in writing in your estate plan.
What Does an Estate Plan Contain?
An estate plan requires several elements, including a will, a living will, healthcare power of attorney, financial power of attorney, and sometimes a trust.
A will is a legal document that expresses how you want your assets to be distributed and who you want to oversee the process. This states what goes to whom, how much, and so on. It also details who should be the legal guardian of your dependents, if you have any.
A healthcare and financial power of attorney gives someone the legal right to make crucial decisions regarding your medical care, procedures, treatments, and finances on your behalf.
Finally, a trust controls how and when your assets are distributed. You can choose to have it released in one go or in small increments to reduce or eliminate estate taxes.
What is the Purpose of an Estate Plan in Your Life?
To Protect Your Assets
No matter what you have, it’s important to protect your assets so that they can go where you want them to, whether that’s your family or to someone else.
Having an estate plan ensures that your assets go to the right people. It helps to preserve the value of your assets and minimises wait times for disbursements.
Furthermore, it allows you to consult with your family during the process of writing your Will and disburse your assets in a manner that is tax-effective and not financially detrimental to the beneficiary.
Allows You to Choose Who Can Make Your Decisions
As mentioned above, a financial power of attorney grants someone the legal right to access your accounts, pay your bills and taxes, and buy and sell investments or real estate in your name. Meanwhile, the healthcare power of attorney will make all critical decisions related to your medical care.
When you’re incapacitated and unable to make your own decisions, you must have someone you trust fully who will act in your best interests. They should be someone who knows you very well too so that the decisions they make are based on what you would want for yourself.
The Bottom Line
It doesn’t matter whether you’re young or old. If you have any significant and valuable assets to your name, or people who financially depend on you, you should have an estate plan.
It’s also essential to update your plan regularly to ensure that there are no old, irrelevant details that contradict your current plans.
Coastal Advice Group is a financial consulting firm committed to providing our clients with the best services and reliable financial advice. We can work with you and your solicitor to formulate an estate plan that is thorough and works to maximise the financial benefits to your family and beneficiaries.
We cater to everyone from all stages of life, from young professionals to people in retirement, through to aged care. We are here to help you achieve your financial goals. You can find us in Newcastle, the Central Coast, Sydney, and Port Macquarie. We have offices located in Newcastle, the Central Coast, Sydney, Port Macquarie, and Byron Bay. Call or book online to secure your complimentary first appointment with us today and get started!
Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Coastal Advice Port Macquarie and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.