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Securing Your Legacy: A Roadmap to Comprehensive Estate Planning

Article By Rebecca Faiers | | Financial Planning

In the hustle and bustle of building your career, it’s easy to overlook an essential aspect of securing your financial legacy—estate planning. Estate planning goes far beyond drafting a simple will; it encompasses a comprehensive strategy for managing your assets during your lifetime and ensuring they’re distributed as per your wishes after you’re gone. Understanding the intricacies of estate planning is vital to safeguard your hard-earned assets. Let’s delve into the four key elements of estate planning and why they matter.

Wills: The Foundation of Your Estate Plan

A will is a legal document that outlines how your assets should be distributed upon your passing. Shockingly, research reveals that over half of Australian adults do not have a will. This omission can result in assets going to unintended beneficiaries. To establish a will, you must be over 18 and of sound mind. It should be in writing and witnessed by two individuals.

There are several ways to prepare a will:

  • Consult a personal legal representative, typically a lawyer, who will guide you through the process.
  • Seek assistance from your state-based public trustee, which may offer free services to some groups.
  • Utilize a will kit, though it’s essential to ensure it complies with legal requirements.

Your will should include details on asset distribution, guardianship of your children, management of ongoing trusts, and your funeral wishes. Appointing an executor, who will handle your affairs after your passing, is also crucial. Keep your will up to date, especially when major life events like marriage, having children, divorce, or significant financial changes occur.

Insurance: Providing a Financial Safety Net

Life insurance plays a critical role in estate planning, offering a financial safety net for your loved ones. It can cover expenses such as funerals, mortgage repayments, and protection for business interests. You can hold life insurance within your super fund or separately.

Testamentary Trust: A Valuable Tool

A testamentary trust, established in your will, holds assets until a specific point in time or under certain conditions. This can be especially useful if beneficiaries are unable to manage their inheritance due to incapacity or to protect assets from divorce proceedings or bankruptcy. Testamentary trusts also offer tax benefits.

Understanding Superannuation: Navigating Unique Rules

Superannuation, unlike other assets, does not form part of your estate. However, you can still control who receives your super through a superannuation death benefit nomination. This includes your super account balance and any insurance benefits.

Remember that you can only nominate specific individuals as beneficiaries, such as your spouse, children, or financially dependent individuals. Review your superannuation nominations periodically, especially when your circumstances change.

In summary, estate planning is a complex but vital process. For those with blended families and diverse assets, collaborating with a financial planner and seeking legal advice is prudent. Additionally, consider the benefits of a family meeting to provide your loved ones with insights into your financial affairs, making the process smoother and less stressful.

Estate planning is not just about preserving your wealth; it’s about ensuring that your financial legacy is a testament to your values and intentions. Taking early steps in this direction will provide peace of mind and security for your loved ones in the future. Contact your Altitude Adviser today to see how your estate planning may fit in with your overall financial plan and goals, we can even refer you to one of our trusted partners to help finalise any legal documentation.

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