The term ‘estate planning’ often conjures up images of vast property estates and expensive cars. However, estate planning is a fundamental component of financial planning. It deals with the control of your assets, and ensuring that after death they are distributed as you intended.

Assets which you have direct ownership and control of – such as shares, a property or a car – can be dealt with via a will. Other assets, such as company assets or superannuation, need to be distributed via their own mechanisms. If a person dies without a will they are said to have died intestate, and their estate is then dealt with via the relevant state laws.

A will should address the following:

• who are the beneficiaries;
• who are the executor/s who will ensure the will is followed;
• any specific bequests; and
• any testamentary trust arrangement.

A testamentary trust is a discretionary trust created by a will that gives the trustee full control over who, when and to what extent benefits are distributed. Testamentary trusts can be used for:

• Asset protection – protecting trust assets from creditors or family law matters;
• Reducing tax – a child receiving income under a testamentary trust is taxed at adult rates rather than the more punitive child tax rates;
• Inter-generational wealth transfer – passing assets to children or grandchildren, bypassing a spouse.

Other areas of estate planning that should be considered when thinking about a holistic financial plan are:

• Ensuring you have nominated your preferred beneficiary within super;
• Establishing a Power of Attorney and enduring guardian – appointing another person to make decisions and sign documents on your behalf. This can be either a general Power of Attorney, such as if you are overseas and need someone to act on your behalf at home, or an enduring Power of Attorney which also provides for impaired capacity to make decisions on your own;
• Guardianship – who will look after the children should something happen to you

Planning for what happens after you’ve passed away isn’t a pleasant topic, but it is necessary to ensure the members of your family  receive your assets as you intend them to. TJL’s Financial Planning team are highly experienced in these matters and can assist you to ensure your family are protected. For a confidential discussion please call TJL in Forster on (02) 6554 9511 or Taree on (02) 6552 3233.