10 simple tips for Estate Planning
"Seize your estate plan! There will never be a perfect day to get started. The sooner you take action, the better prepared you and your family will be for years to come." Kerstin Glomb, KJB Law
1: Make sure your estate plan covers all your wealth
Estate planning is not just about making a Will. Some assets may not form part of your estate and are therefore not distributed under your Will, for example, your superannuation and assets you won with another person or persons as joint tenants. Proper estate planning advice is crucial to ensure that all of your wealth is distributed to the persons you want to receive it.
You should note that a wrong estate plan is not discovered before your death. Only a solicitor specialised in estate planning will consider all relevant details and advise you fully about the implications of your estate plan and possible claims against your estate.
2: Make sure you appoint the right person(s) as executor(s)
Appointing the right person or persons as executor (the person who is responsible for managing your estate within the terms of your Will and protecting the estate assets) is critical to ensuring your Will is executed according to your wishes, and in particular, the estate is administered appropriately. You should appoint someone you trust and who is assertive in particular if you expect tensions between your beneficiaries.
3: Make sure your minor children are well looked after
It is generally a main concern who should look after minor children. Under your Will you can appoint a person or persons to look after your children as well as giving directions for example regarding your children's schooling, contact with family members and the like. Such an appointment cal also be taken into account by the family courts if the other parent of the children is still alive.
4: Make sure your children receive their share
We are a modern family society and family life can be complicated in particular when you are married but have children from previous relationships. You may want to provide for your spouse but also for your children. A proper estate plan can provide a balanced distribution between all of your family members and minimise the risk of claims against your estate.
5: Make sure the family home is not sold whole someone else still needs it
If you own real property in which other people also live, you can provide protection for them and prevent the property from being sold for as long as they live or for a certain period of time which allows the person to find alternative accommodation.
6: Make sure there is the least stress and expense
The administration of an estate can be complex and in particular more expensive if you do not have the right estate plan in place. Putting the right estate plan in place (and not just a Will) gives you the opportunity to make your wishes clear on a variety of estate planning issues. In particular, problems and costs are caused by homemade Wills and Will Kits (and any disputes about for example interpretation of your wishes would make the lawyers rich!).
7: Make sure that your assets do not end up with your children's estranged spouses or creditors
You have worked hard to build your wealth and want to make sure that it is passed on to your children and grandchildren. You can provide for protection, which ensures that your assets are distributed down your bloodline and are not accessible to preditors or creditors.
If you own your business together with non-family members, you should also discuss with them what should happen with the business if any of you dies.
8: Make sure the right person(s) looks after you in case of mental incapacity
It is a fact - we all live longer and more people will in the future suffer from a health condition such as dementia and Alzheimer's disease. As you are then in a vulnerable situation, it is important that you choose the people you trust, as reliable and you feel comfortable with to look after your financial, personal care and medical decisions when you are mentally incapable to do so. If you do not make such an appointment a Court or Tribunal decides who looks after you and that may be a person you have never met and who has no knowledge about your wishes, in particular in relation to your personal and medical matters.
9: Make sure the right person(s) controls your family trust
Assets held in your family trust do not form part of your estate and are not distributed pursuant to the provisions of your Will. Rather, the terms of the family trust deed determine what happens to those assets. However, in the event that you are the controller of the family trust (either alone or jointly with others) the terms of the trust may allow you to decide who should step into your shoes upon mental incapacity or death. This ensures that the trust continues to be administered pursuant to your wishes.
10: Make sure you have a succession plan for your business
In the event that you own a business, it is essential that you consider how the business may be affected by your incapacity and death. Do you want your business to be sold upon your incapacity or death? If so what are the conditions of such a sale and to whom should it be sold? How should your wealth be distributed if only one or some of your children are interested in continuing the family business?
Written by Kerstin Glomb KJB Law www.kjblaw.com.au