Estate planning explained

Posted on Feb 12, 2013 | 0 comments

estate will

The world is a complex place and becoming more so. Family break-up, longer life expectancies and the possibility of premature death or a  debilitating disease such as dementia all mean that proper estate planning is a very important aspect of life to get right.

If determining what happens after your death, such as who gets what and how and when, is important to you, then a proper estate plan is essential.

The traditional “three page will” is rarely adequate as an estate planning tool because the laws governing superannuation and taxation and the legal rules involved are not areas for amateur involvement, so get experts to do the job properly. And do it early; estate planning is very often left too late meaning that the beneficiaries are often not provided for in the manner intended.

Wikipedia defines an estate as: the net worth of a person at any point in time. It is the sum of a person’s assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time.

Estate planning is the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity.

Probate is a process that proves the will of a deceased person is valid, so their property can in due course be transferred to beneficiaries of the will. This process is handled by the probate court (a specialised court in the state of domicile of the deceased person).

Some of the things that must be considered when arranging your affairs and deciding on the eventual dispersal of the estate:

  • Who should hold a power of attorney or enduring power of attorney – these are a grant of the right to a third party to act on a person’s behalf.
  • Who should be the executor of the will.
  • Should a testamentary trust be established.
  • What should be in the Will (for example, jointly held property will usually revert to the remaining party and not form part of the estate).
  • How should specific bequests be made.
  • What tax planning is necessary.
  • What the costs of administration will be.

It can be seen from the above that estate planning is indeed best done with a trusted professional adviser. JWA Business & Wealth can help you organise and stay in control of this vital process. Feel free to call us at any time.

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