ESTATE PLANNING PERTH
Appropriate Estate Planning is an essential, but often neglected, consideration.
There is more wealth in the community now than at any time in the past and personal and business financial arrangements are increasingly more complex and sophisticated. Added to this is the fact that family and personal relationships have also become more complex and, in some instances, less stable.
When a family member passes away it can be a very difficult and stressful period. Having in place an effective and well considered estate plan will provide greater certainty during this difficult period time and it will also reduce the risk of conflict between loved ones about money and finances in the future.
A well-prepared estate plan is built around a carefully considered and crafted Will. However, estate planning involves much more than simply preparing and signing a Will.
The aim of putting a good estate plan in place is to provide you and your loved ones with peace of mind when you die, ensuring that your assets are passed on to your beneficiaries in the most efficient and effective way and that should you lose your capacity to make decisions for yourself before you die that proper arrangements are in place for those decisions to be made for you by a person in whom you have confidence and whom you trust.
In many cases people forget to update their Wills. The danger in doing so is that your Will may no longer reflect either and/or the beneficiaries to whom you wish to distribute your assets.
WILLS & ESTATES LEAD
What Types Of Matters Should My Estate Plan Include?
Your Estate Plan should be based on a Will which:
- Nominates a legal personal representative (called an Executor/Trustee) to administer your estate and any associate trusts after you die;
- Nominate your intended beneficiaries clearly and with certainty or alternatively, nominate a class of beneficiaries to ensure that your assets pass only to those who you intend to benefit from your estate;
- Prevent uncertainty, undue stress, and unnecessary expense by minimising the risks of your Will being challenged by a claim for provision or better provision pursuant to the Family Provision Act. The consequence of which can be to undermine your wishes;
- Secure to the extent reasonably possible, your assets from any unintended distribution to creditors of insolvent or bankrupt beneficiaries, vulnerable beneficiaries such as those who may suffer from drug, alcohol or gambling issues and estranged partners of children whose financial affairs may be subject of orders from the Family Court of Western Australia;
- Provide adequate flexibility of your assets considering both the persons and future needs of the beneficiaries nominated in your Will;
- Utilise effective tax planning to minimise exposing beneficiaries to unnecessary tax liabilities such as capital gains tax and income tax;
- Where it may be relevant, make provision for effective business succession or the winding up of any business entity.
What Other Considerations Should Be Considered?
What is included in my Estate?
Assets that are owned in your personal name will fall into your personal estate. These may include real estate property, shares, bank accounts and personal possessions such as jewellery, motor vehicles, furniture, and the like. However, you may own some assets jointly with someone else such as your marriage partner, a relative or business associate. Assets which are jointly owned will not fall into your estate but will as a matter of law automatically become owned by the remaining joint owner or owners. Such assets may include real estate property where it is owned as joint tenants (but not when owned as tenants in common), joint bank accounts, joint share portfolios etc.
Other assets which will not fall into your estate which are those owned by a trust, assets that are owned by a company, the death benefit entitlement from any superannuation policy will fall outside of your estate if you have made a Binding Death Benefit Nomination for that benefit to be paid to somebody.
Where assets are owned by a company or a trust where you are the sole shareholder or sole Appointor then through your Will control of the trust may be passed on to one of your nominated beneficiaries.
Testamentary Trusts may be a useful inclusion in your Will where the person to whom you wish to leave an asset or assets in your Will is a vulnerable beneficiary because they are under the age of 18 years, have become or are at risk of becoming bankrupt, have an addiction to alcohol, drugs or gambling or otherwise may be involved in family law proceedings. The use of a testamentary trust allows you to pass the asset or the assets to a trust and a chosen beneficiary is put into control of the trust. This trust does not come into existence until your death. Testamentary trusts are usually a discretionary or a fixed trust. A Will may include more than one testamentary trust and there may be one or more. A Trustee is appointed to control that trust.