Want to leave a fantastic legacy for your family? Then you need to do some proper estate planning. And that does not mean just getting a will.
Whenever I see a new client to do a new will a common statement is, “I just want to keep it simple.”
I think what people really mean is that they don’t want any complications for their families after they die. And that makes sense, doesn’t it?
But keeping it simple sometimes takes a fair bit of work, not to mention good planning.
Estate planning is not just about having a will. Wills are usually a vital part of a harmonious deceased estate, but are not the only element.
Good estate planning is about understanding the role of a will in transferring rights and property to others on death, and understanding how other financial resources are transferred.
This means understanding how jointly owned property will not necessarily form part of your estate, and understanding that it may not automatically go to your wife or husband, or your children.
It also means being aware of consequences of options and choices.
For example, the selection of your executor should not be based on a wish to treat all children equally. Your executor should be the person who is most appropriately qualified for the job. Naming all of your children as executor, can cause additional costs and delay in the administration of the estate, particularly where there is potential for lack of harmony between them, or where other estate planning issues have not been properly considered.
Considerations include: How do you provide for children from a previous relationship whilst still ensuring that your new partner and kids are also provided for? Do you know what will happen to your superannuation when you die? Who will run your business? What about existing family trusts?
It may not be appropriate or possible to share your estate equally between children. What if one of your children with special needs and requires their interest to be looked after by a trusted person? What if one of your beneficiaries is bankrupt or at risk of going bankrupt? What if one of your beneficiaries experience relationship breakdown after they inherit from you? Did you know that their inheritance could be taken by the trustee in bankruptcy to discharge the debt?
And did you know that your superannuation may be paid to your estate, or it may not? In some cases the trustees of the super fund will decide where your superannuation will be paid. It could be that your superannuation death benefit is paid to someone not of your choosing, perhaps someone you would not have considered, leaving the beneficiary you thought would get it with few rights.
What if you think that your estate might be disputed by someone such as a child or girlfriend? Did you know there are strategies we can assist with to minimise the risk of estate disputes?
What happens if your will isn’t signed correctly? This often happens when people “do their own wills”.
And what about your debts, what happens to them? Are you worried that your debt might be passed on to your family?
Did you know that you can leave your estate in a structure called a testamentary trust which provides asset protection from third parties such as the Family Court or bankruptcy, and the ability to generate wealth for your family?
There are answers to all of these problems but you won’t find these answers in a post office will kit, or be advised about them by a generalist solicitor.
The answers to these questions are further benefits of seeing an appropriately qualified solicitor with experience in estate planning.
It is possible to structure your affairs to minimise the risk of the estate litigation. It is also possible to structure your affairs so that your estate is administered simply, harmoniously, and inexpensively.
The costs involved in consulting a solicitor for proper estate planning are minimal compared with those arising in contested estates or estates that are complicated because proper advice has not been taken before death. But even worse than the financial cost is the sadness and trauma that family members experience when an estate is left in a mess because a spouse or partner or parent has not taken the care to properly plan their estate.
Failing to plan your estate can have disastrous results, which are costly and take time to fix, if they can be fixed at all. Failing to plan your estate is a waste of an opportunity to ensure that the results of all your hard work are passed on in the best way to the people of your choosing.
An estate that can be administered simply, efficiently, inexpensively and with certainty because of your careful planning is the best inheritance you can leave your family!