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What is Estate Planning?

Estate planning is more than just making a simple Will. It is the process of working out the best structure for your personal and financial affairs during your lifetime. It also covers how your personal possessions and financial assets will be distributed after you die.
 
A good estate plan will allow you to:

  • Preserve your wealth during your lifetime.
  • Generate wealth in a flexible and tax-friendly way.
  • Ensure your assets are distributed according to your wishes after your death, ensuring you meet the needs of your loved ones in a tax effective way.

 
While a simple Will can deal with an estate it does not allow the estate to take advantage of possible tax saving opportunities for beneficiaries or the protections available to a beneficiary whose inheritance might be at risk from insolvency, family law claims or wastage by a vulnerable beneficiary.
 
The tax savings
 
A simple Will, while adequate to deal with an estate, does not allow the estate to take advantage of possible opportunities for tax savings for beneficiaries or the potential to protect a beneficiary’s inheritance from bankruptcy or family law claims.
 
Estate planning gives you the opportunity to consider what you have and how you would like to transfer your wealth when you die. It also takes into consideration any potential claims, who should be the executor and trustee and selects the best estate planning arrangements to achieve your goals.
 
While a simple Will is the minimum required in the estate planning process, it's important to know that estate planning involves much more than a Will, it gives you the opportunity to:

  • Nominate someone to act on your behalf should you become incapacitated.
  • Protect vulnerable family members.
  • Decide the best way to structure your estate to enable tax benefits and asset protection.
  • Determine if your superannuation and insurance should be included in your estate.
  • Pass assets to heirs with minimum financial burdens.
  • Use family and testamentary trusts as vehicles to hold assets.
  • Implement investment strategies for trusts or heirs.

As part of estate planning, careful consideration needs to be given to current taxation and superannuation legislation and the provisions of the Succession Act 2006 (NSW), which can have a significant impact upon estates and the entitlements of certain beneficiaries.