A BEGINNERS GUIDE TO ESTATE PLANNING
What is Estate Planning?
This can be described as a planning strategy aimed at giving:
a)
financial security for a person during their lifetime, including an ability to meet lifestyle
expectations; and
b)
an uncomplicated, cost effective transfer of that person’s assets to their beneficiaries on their
death.
The broad scope of this type of planning has to take into account a lot of issues including
•
emotional and lifestyle issues, including having a Power of Attorney and appointing a guardian
in the event that the person may not always have the capacity to make decisions about
financial and lifestyle matters;
•
the passing of assets to heirs with minimum financial disincentives on their death;
•
ensuring the person has a will;
•
the financial and emotional wellbeing of minor dependants and the present and future financial
needs of the person’s family, dependants, business and assets;
•
the person’s actual contingent and potential liabilities;
•
the needs of physically or intellectually challenged dependants and the protection of assets for
the benefit of dependants, including whether assets would be available to creditors, the
possibility of claims under the Family Provision Act, the effect of holding assets under joint
tenancy, collection of overseas assets, life insurance, superannuation, relevant revenue and
insolvency legislation.
•
the use of family and testamentary trusts as vehicles for holding assets.
•
evolving appropriate investment strategies for the person, and also for any trusts.
Estate planning is most effective when there is collaboration between the person, their financial
adviser, their accountant and their solicitor.
An estate planning strategy is not static and should be reviewed at intervals to meet changing
circumstances. For instance, a new Will may need to be made in the event of marriage, divorce,
entering or dissolving a...