5 tips for effective estate planning

By Casey Shaw, Financial Advisor

Everyone has heard a horror story about an estate being contested; an ex-spouse appearing back on the scene, a child from a previous relationship etc. The most common thing with all these stories though is the deceased never would have expected a challenge.

There are many aspects to a good estate plan. We listed some tips below on getting your estate planning sorted:

1. Get a Will!

It might sound obvious but the first thing you should be doing is engaging with a solicitor to get a professionally drafted Will.

We always suggest having your Will professionally drafted as there can be legal issues that can arise if your estate is challenged. To ensure you have covered off on this it’s best to have a professional help you through it. For the small up-front cost it can have large downstream benefits.

If you die without a Will (this is called dying intestate) it then becomes a matter of law as to how your estate is distributed. You and your loved ones lose control over what happens to your estate.

2. Arrange a family meeting to discuss your wishes

It’s extremely important to arrange a time to sit down with your family to explain your wishes to them. If the first time your family learns of your wishes is when your Will is being read to them by your executor it can be very daunting and can often lead to issues if certain family members feel left out.

It’s never a pleasant meeting to arrange so it may be good to get your solicitor, financial planner or accountant involved in the meeting to help you through the process.

3. Engage with your financial planner and accountant (tax considerations)

There can be tax consequences when distributing an estate. It is recommended that you involve your financial planner and tax accountant to ensure your beneficiaries don’t encounter unexpected tax issues.

4. Organise a Power of Attorney and Power of Guardianship

One thing that can sometimes be forgotten when discussing an estate plan is how to deal with your assets and your wishes in the event you suffer a medical issue and lose mental capacity. The purpose of appointing a Power of Attorney is to allow a trusted person to deal with your assets where you are unable to.

A Power of Guardianship provides power to an individual to make medical and lifestyle decisions on your behalf where you are unable to.

Both these documents can help to reduce stress with family members during what is often a very emotional time.

5. Ensure you have a beneficiary nomination on your superannuation

Many people don’t realise that your superannuation doesn’t form part of your estate (at least initially). It is up to the trustee of your superannuation fund to determine where to pay the funds on death. The trustee will rely on a death benefit nomination to determine where to pay the money.

If you aren’t sure if your superannuation has a death benefit nomination, contact your superannuation fund and ask. If you don’t have a nomination you can request a form be sent to you to make a nomination.

You can elect to have your superannuation proceeds paid to particular individuals (e.g. spouse or children) or you can request the trustee direct the proceeds to your estate to let your executor deal with the distribution.

There are potential tax implications on the distribution of superannuation proceeds so make sure you speak to your financial planner as to whether you and your beneficiaries may be impacted. Contact us today if you would like to discuss your estate planning needs.

Casey Shaw is an authorised representative and credit representative of AMP Financial Planning.

Blueprint Planning Pty Ltd (ABN 78 097 264 554), trading as Blueprint Wealth, is an authorised representative and credit representative of AMP Financial Planning, Australian Financial Services Licensee and Australian Credit Licensee.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.