Estate planning involves reviewing and considering your assets and liabilities, as well as your unique personal circumstances, to put in place structured measures that meet your wishes and the needs of your family. Estate planning ensures you take control of how the wealth you have worked to build for your family can be transferred, protected and enjoyed by the next generation.
Importantly, it extends beyond personally held assets to include superannuation, insurance policies, family trusts and private companies.
To be clear, an estate plan is not just a Will; although your Will is a key document of your wealth and risk management plan. There are actually 4 key documents that we recommend you have in place to form a strong estate plan: a Will, an Enduring Power Of Attorney, an Appointment Of Medical Treatment Decision-Maker, and an Advanced Care Directive.
Why is estate planning so important?
You don’t need a lot of wealth or a big family to benefit from an estate plan. It’s important for everyone to protect what’s left behind, particularly in the current COVID-19 climate.
Control how your assets pass on your death
If you don’t have a valid estate plan when you die, you will be ‘intestate’. This means that instead of you determining who will receive your estate, it will be divided up in accordance with a formula set out in legislation. This can lead to unexpected and unintended results.
Avoid costly complications and administrative issues for your family at an emotional time
Making a comprehensive estate plan gives certainty to your family and helps to avoid disputes arising amongst family members. No one wishes their legacy to be a family conflict!
Protect your family and secure the wealth you have built up
You can structure your estate plan to ensure that your family’s wealth is protected against adverse outside influences or events. In some cases, your family may also need protection from themselves.
Simple versus Complex Wills: What’s the difference?
A Simple Will generally leaves lump sum payments or assets to your beneficiaries as absolute gifts in their personal names. Commonly, if you are married or in a de facto relationship and have children, in the first instance your estate would be left to the surviving spouse in their personal name and then to your children equally in their personal names if your spouse has predeceased.
A Complex Will has all the hallmarks of a Simple Will but also has added mechanisms, such as Testamentary Trusts , Rights to Occupy Main Residence clauses and Superannuation Proceeds Trusts. Complex Wills are a means of ensuring that the wealth you leave to secure your family’s future is not quickly lost through poor financial decisions, or as a result of divorce or family conflict.
While a Simple Will does the job of distributing your estate to your beneficiaries, you may need a Complex Will to take advantage of their numerous benefits for asset protection and tax effectiveness.
When do I need a Complex Will?
There are a few key reasons why you might benefit from a Complex Will:
- You own valuable assets where estate taxes will apply (some overseas jurisdictions have estate or wealth taxes) or where significant income is derived from the assets
- You want to establish a ‘Special Disability Trust’ for a disabled child
- You have a previous spouse or children from a previous relationship
- Your beneficiaries are likely to receive $500,000 or more
- You expect to add to your assets over the balance of your working life
- You own a business
- You have significant life insurance cover or superannuation benefits which may be transferred to your estate on your death
- You want to set up a trust that allows your children to receive certain amounts of income up to a certain age after which they may be able to take over the trust to manage it themselves
Do you need help with estate planning?
Estate planning can be tough to think about. If it’s something that you have been putting off for too long or, alternatively, have implemented in the past but feel needs updating, BlueRock can help.
With many of us working from home and with more time available due to the COVID-19 shutdown, now is the perfect time to address your estate planning, which might have been put in the ‘too hard’ basket in the past.
BlueRock has extensive experience in estate planning, with our Private Wealth and Legal teams working closely together to ensure all areas are covered off throughout our industry-leading process.
Whether you are just getting started in your wealth accumulation journey or have a significant and complex asset base, BlueRock has the firepower in the fields of tax, commercial law, Wills and estates, superannuation, wealth management, insurance and more to ensure your estate falls in line with your wishes should something happen to you or your loved ones.
