Preparing for the unexpected with an estate plan
Your personal assets and your Will are probably the last things you want to think about. However, having a plan in place regarding your estate plan after you are gone is important.
Planning ahead not only ensures that your wishes will be carried out, but it gives your loved ones some peace of mind about how you wanted your assets used and distributed.
We’ve explained estate planning, personal assets and Wills in more detail below.
What is estate planning?
An estate plan is essentially a set of documents that come into effect during your lifetime and outline the transfer of your personal assets in a logical and legal manner after your death.
The documents will also consider who has the power to make decisions during your life should you not be able to make them yourself, such as for your health or finance.
Most people will draft a Will in their lifetime, but estate planning is just as important and goes hand-in-hand with a Will.
How does an estate plan help you prepare for the unexpected?
One of the benefits of estate planning is ensuring your wishes are known by formalising them in writing. This is helpful if you are unable to speak for yourself for whatever reason.
Another benefit of estate planning is minimising arguments. Sadly, often when there are no official guidelines set in writing, disputes among loved ones can arise. Having a legal document in place helps to remove the need for loved ones to divide assets amongst themselves or make difficult decisions on your behalf.
A good estate plan can also help minimise any tax your heirs need to pay.
What documents make up your estate plan?
An estate planning is comprised of a:
- Healthcare power of attorney – allows selected agents to make medical decisions for you if you are unfit to make them yourself.
- Durable power of attorney – allows an agent to handle your finances.
- Advanced directive – this details your decision for ongoing life treatments.
Steps involved in estate planning
- Create a Will and keep it up to date – this is essential if you want to choose where your assets go rather than have them handed over to the law of the state.
- Create a Binding Death Benefit nomination – this is a written nomination that is made to your super fund to ensure your death benefit is paid out as per your wishes.
- Nominate a beneficiary for your life insurance – this is someone you choose to receive your life insurance benefits if you were to pass away.
- Understand the tax consequences – the way you distribute your assets could have tax implications on the beneficiaries. There are ways you can manage this, such as insurance policies and how they are paid to dependents.
- Appoint a power of attorney – this is someone who will legally act on your behalf until you pass away should you not be able to make decisions yourself.
How we can help you plan for the unexpected
Our experienced team can help you put the right structures into place to provide maximum protection to your family and assets if the unexpected does occur.
