6 Things to Consider When Estate Planning

legal meeting for wills & estate planning

An estate plan is so much more about drawing up a Will. When you formalize how you want your loved ones to be looked after once you pass, you help them move forward with ease. That’s one way to gain your deserved peace of mind as you ease into your retirement years. Some people might wonder what they should do if they retire at an older age or if they have retired already. There are options available for them as well such as SMSF loan which is a type of short-term loan with high-interest rates that people can use to pay off their bills while still being able to enjoy their retirement years.

How will a strategic estate plan exactly help protect your loved ones?

There are several benefits of having a strategic estate plan. Here are three of them:

  • You can make your wishes known. One of the benefits of a solid estate plan is formalising your wishes in writing. This document could help if someone challenges what you said you wanted after you pass or if you could no longer speak for yourself.
  • You could minimise family disputes. Guidelines must be set when assets need to be transferred, especially in the event of a dispute. Otherwise, distributing your estate will only likely cause unnecessary frustrations and affect the morale of your loved ones.
  • You may help your heirs deal with tax consequences better. Consider what tax obligations your heirs may need to pay once your estate has been transferred to them. Putting together a strategic estate plan that takes into account the tax implications of your assets will avoid unexpected costs that might impact your heirs and their future.

What to consider when estate planning?

Now you know the benefits of estate planning, it’s time to be aware of the factors that can impact your Will & estate administration in the future. Here are some of those considerations:

  1. Do you want your Will to be legally binding?

While it’s possible to prepare your own Will, it may not be suitable in complex situations. Keep in mind that if your Will is deemed invalid, the court will distribute your estate according to the law—which may not align with your wishes as unintended beneficiaries can make a claim. That’s why it’s better to hire an estate planning lawyer who can guide you through the entire process.

Also, it’s vital to keep your Will up-to-date, reflecting the recent changes in your life. That’s to ensure everyone who matters to you will be taken care of in the time of your demise.

  1. Have you designated beneficiaries for your accounts and insurance plans?

You should designate beneficiaries who’ll receive your money and assets after you pass away. Also, consider setting up a Death Nomination or Reversionary Beneficiary for your superannuation account. That way, your super account’s value will be passed to your estate according to the instructions you will leave in your Will.

  1. Have you designated legal guardians for your dependents?

This may be one of the most important things you do as you plan your estate. If you were to die tomorrow, what would happen to your dependents? Do you have a solid plan for them, including naming guardians who will care for them and fund their education and other essential needs?

  1. Do you want to grant power of attorney to decide on your behalf if you can’t?
an old man signing a legal document

There may come a time when you’re no longer capable of making sound legal or financial decisions due to medical issues or advanced age. When you grant power of attorney, you assign someone to make all those decisions on your behalf should such situations arise.

It’s vital to choose someone you wholly trust. Keep in mind that they will be responsible for looking after your properties, bank accounts, ongoing bills, and other financial matters.

Also, you may appoint a different type of power of attorney to different individuals, depending on the tasks you would like them to carry out for you. For instance, you may want your son to make medical decisions for you while you turn to a financial adviser to decide on financial matters. 

  1. How will taxes affect your estate?

In Australia, there isn’t an “inheritance tax” per se. However, that doesn’t mean your beneficiaries will avoid other kinds of taxes. Often, inheritors deal with huge sums of Capital Gains tax. Luckily, you can strategize your estate planning to reduce the effects of such taxes. 

For instance, super fund benefits are tax-free if the beneficiary is a “Death Benefits Dependent.” That means they should be a child of minor age, spouse, ex-spouse, or interdependent relation. So depending on whom you appoint as beneficiary, you can avoid taxes affecting your estate. 

  1. Have you chosen your Will’s executor?

A Will executor has a key role in your estate administration. With the assistance of a solicitor, an executor will manage and distribute your estate according to the terms set out in your Will. An executor will be the one to apply for a grant of probate, which certifies that your Will is valid. 

So when you nominate an executor, you have to select an individual with a good understanding of their duties. They should also be likely to be around to perform their duties. 

Talk to an Estate Attorney in Adelaide Today

While we’ve covered a lot of factors in this article, it’s still best to talk to an estate lawyer. That way, you’ll be guided efficiently depending on the unique circumstances you have. Contact one of our estate attorneys in Adelaide today. 

6 Things to Consider When Estate Planning

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