Anthony Keane published an article entitled “Have you the will to leave your family in peace?” in the Courier Mail on 13 June 2011. Anthony quotes Darren James of AMP Financial Planning.
In the article Anthony summarises some of the key issues that Darren James considers should be included in the Will. All of the points raised by Darren are correct, and very important. In this post I would like to summarise some of the important factors that I feel should be taken into account when considering your Will. These are:
Your Executor
The appointment of an appropriate Executor is critical. Executors have very strict duties and choosing the wrong person could end up costing your estate a lot of money, or worse still, result in your wishes not being properly carried out.
Tax
Taxation objectives are key considerations when preparing your Will and estate plan. The treatment of different assets within your estate can have, in some cases, unwanted and avoidable tax consequences.
Asset Protection
It is very important to take into the account the circumstances of the beneficiaries of your Estate so as to minimise any risk that their inheritance could be eroded.
The ownership of your assets
In some states in Australia, assets that are not owned in your own personal name do not form part of your estate. These include companies, trusts and superannuation funds. It is very important to consider how the control of these entities is passed in your estate, and what happens to the assets that are owned by these entities.
Superannuation
It is important to thoroughly consider your superannuation as it may be paid directly into your Estate. Some of my clients prepare a Binding Death Nomination to ensure that the benefit from their superannuation fund is paid directly to the person that they nominate.
Family Provision
It is very important to consider the implications if you do not adequately provide for your spouse/children/dependents in your Will. Detailed advice should be obtained in this situation.
Businesses
If a business is owned in a company or partnership it is very important to consider what happens to the business, and the ownership of the business, upon your death. Often people enter into buy/sell agreements, (also referred to as Business Wills) to ensure a smooth transition in the ownership of the business upon death of one of the owners.
Life Insurance
Life insurance is a critical tool to ensure that your debts are paid out, and your beneficiaries are adequately provided for upon your death.
Testamentary Trusts
Testamentary Trusts are a very good tool to achieve different objectives within your Will and Estate plan. They can have the effect of minimising tax for your beneficiaries, assisting your beneficiaries in their wealth creation and management, and also asset protection.
The ultimate aim of estate planning is to maximise the value of your estate and reduce any potential hardship to your beneficiaries. It is important that you speak with your solicitor, or contact me to discuss any of your estate planning needs so that your wishes are carried out in an effective way.
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