Estate Planning Australia
Death is not something we like to think about but a bit of pre-planning can save a lot of heartache for those we leave behind. What would happen when we pass isn’t something most like to dwell on, however, with more wealth being created through superannuation funds, it’s a thought that will require action at some stage – and the sooner the better.
With the introduction of Superannuation more than 20 years ago, a generation of Australians are now in a position to leave substantial assets to younger generations of their family.
In years gone by, estate planning in Australia largely involved leaving a family home and some personal belongings to your children or other family members.
In contrast to your parent’s generation, there are now lots more factors to consider when managing your retirement finances and making a will.
Intergenerational estate planning
It can be confronting having to think about what would happen in the event of your death, and it is often a task that we have on our to-do list that is put off to another day. But by being properly organised now with your intergenerational estate planning, you can have the certainty and peace of mind knowing your family’s financial position in the future.
Here are some considerations for intergenerational estate planning.
- Make a Will – Having a current Will is essential to make your wishes clear and is best documented by an accredited estate planning solicitor. It is important that you make adequate provision for your dependents and document the reasons for your decisions to help minimise the risk of your Will being contested.
- Tax effective trusts or pensions – You might like to consider using your will to set up a testamentary trust. Which offers flexibility regarding the distribution of income and assets as well as potential tax advantages. They are often used by people who have complex family, financial and business arrangements.If you have young children, a child allocated pension can be a tax effective way for the younger generation to inherit your superannuation and any linked life insurance.
- Consider an advanced health directive – This enables you to give detailed instructions in relation to your health care, including decisions on any treatment you wish to receive or refuse.
- Establish a Power of Attorney – Powers of Attorney are designed to deal with your affairs while you are still alive, enabling you to appoint an individual to deal with your affairs if you become incapable of making your own decisions.
- Appoint a guardian for children – You can provide that guardian with guidance about your child’s upbringing and make provisions for your children’s financial future using the most tax-effective means available.
- Make binding death nominations – This ensures these nominated funds bypass the estate, and in so doing, are excluded from any claims against the estate. Make sure your nomination is current, as binding nominations need to be renewed.
We know this can be difficult to think about, but it is crucial to protect your assets and care for your beneficiaries after you’ve moved on. Consult your Modoras Executive planner today about intergenerational estate planning.
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