If you have specific wishes for the distribution of your wealth to your family, this tip is for you.
You need more than a Will, you need tax-effective strategies that consider your wishes for every branch of your family tree.
You need an Estate Plan. An Estate Plan is more comprehensive than a Will as it covers more than your personal assets and includes outlining your wishes for jointly-owned assets, business assets and proceeds from your superannuation fund or SMSF.
For all families, modern and traditional, an Estate Plan enables you to nominate your intended beneficiaries which may include not only your children but step-children or a new partner and, importantly, allows you to specify those you do not want to benefit from your passing (such as an ex-spouse).
An Estate Plan can be especially crucial for blended families.
There are many benefits of having an Estate Plan in place, including:
1. An Estate Plan identifies all your assets for distribution to your nominated beneficiaries, not just personal assets. A Will doesn’t usually cover your superannuation, jointly held assets, assets held in trusts or business assets. As well as outlining all your assets for distribution to nominated beneficiaries, an Estate Plan can be used to identify any areas of potential conflict, such as jointly-owned assets, to avoid confusion among your loved ones after your passing.
2. An Estate Plan identifies the most appropriate way to hold your assets for the benefit of your beneficiaries. There can be unexpected tax consequences of the distribution of wealth within blended families, so it’s important to seek professional advice about the most appropriate structures and consideration of tax implications associated with different assets nominated for distribution. Many families unknowingly create tax complications when it comes to distributing assets outside of a traditional family structure.
3. Without a valid Will, your assets will be distributed according to intestacy rules. This can mean that your assets may be distributed, in order of priority, to your surviving spouse, children, grandchildren or great grandchildren, parents, brothers and sisters, nieces and nephews, grandparents, uncles and aunts or first cousins. For non-nuclear families, these rules do not account for your spouse’s children or grandchildren.
4. When you marry, any previous Will in place will no longer be valid. It’s always important to seek advice when your circumstances change.
5. Without explicit wishes outlined in your Will and Estate Plan, your family home will be automatically transferred to your surviving spouse unless you jointly-own it. There may be more tax-effective ways to hold your assets and distribute to your nominated beneficiaries, so it is best to seek advice. A comprehensive Estate Plan can help to avoid tax implications that may be associated with the transfer of assets upon your death.
Estate Planning can be complicated, but it is vital to protect the wealth you have worked so hard to accumulate. An Estate Plan can help to clarify your wishes to avoid conflict or litigation after your passing and, importantly, avoid disadvantaging the ones you love. We can work in collaboration with other key stakeholders such as your solicitor and accountant to develop an Estate Plan which incorporates your overall financial objectives.
If you would like advice on Estate Planning, I encourage you to contact us on 07 3720 1299 or email admin@wealthfundamentals.com.au.
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Lane Moses Pty Ltd ABN 56 092 186 117 trading as Wealth Fundamentals and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
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