Estate planning is a topic that many people prefer to avoid. As a culture, we generally do not like to discuss the issue openly or proactively.

You spend a lot of time in your life working to accumulate assets. You may even be fortunate enough to inherit wealth. It makes sense then to spend some time on your estate planning to determine how you would like your assets distributed when you die.

Estate planning can be a very emotive topic. When you combine money, love, relationships and family dynamics into one conversation about your estate plan, things may become a little emotional. Add blended families to the mix and it can become even more complicated.

So where do you start?

Your Squared Financial Solutions Adviser can help you start planning so that your estate plan is in line with your wishes. Since your adviser is independent from your family, they will put your needs first and help you make sure that your estate plans are in order.

Your estate plan should start with a will

A will is a legal document that names the people (‘beneficiaries’) who you want to receive your assets (e.g. property) and other possessions and investments you own after your death. It helps you express your wishes in writing. Without a will your loved ones could face uncertainty and legal complications.

Wills are not just for older people either. Without a valid will the Government can determine how your assets are distributed, taking into account your family situation. They may also tax your estate and decide who looks after your children if they are under 18. This could be a very different outcome to what you had in mind. It can also cause delays in settling your estate.

Making a will provides peace of mind for you and your dependants.

Not all of your assets are covered by your will

It surprises many people to learn that you cannot always use a will to express who will receive certain assets such as your superannuation and life insurance. So nominating your beneficiary on these policies is just as important as having a will.

If you own a life insurance policy, proceeds can go into your estate or be apportioned to nominated beneficiaries. You and your loved ones should also review whether you have adequate insurance cover before it is too late.

Superannuation death benefits can only be paid to your estate or to ‘dependants’, as defined under superannuation law. In many cases, members’ death benefit nominations are not binding on a super fund trustee. While your nomination will be taken into account, payment is at the trustee’s discretion – unless it is a binding death benefit nomination as offered by some super funds. While binding nominations are binding on the trustee, they generally have to be renewed every three years.

The idea of having a trustee decide who will receive your superannuation does not suit many people. In many instances, a binding death nomination is preferred. Again, your Squared Financial Solutions Adviser can help you understand the various decisions you face.

Ownership structures and tax matters are also important

Depending on your situation, ownership structures and tax matters can deliver different outcomes to different people. It makes sense to make sure you have the right estate plan in place for your beneficiaries.

Your superannuation benefits, which include death benefits from insurance through superannuation, can be pa id to dependants as a tax-free lump sum. Taxation of death benefits paid as a pension to dependants and payments to non-dependants can vary depending on your personal circumstances. By spending some time looking at tax issues you can be confident of the outcomes that will occur when your estate plan is eventually implemented.

Talk to us about how estate planning advice might work for your beneficiaries

If you are ready to start your estate planning, we will be happy to book an appointment to begin working with you to create an estate plan that is right for you.

To get started, please contact us.

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