Estate planning is an effective strategy in dealing with asset protection upon death. It is imperative to protect your estate and the interests of your beneficiaries by having a Will in place. Through the use of estate planning, all assets will be transferred according to your wishes in the most effective and efficient manner in the unfortunate event of death.
A Will is a document that outlines your wishes in regard to how you would like your estate to be allocated amongst your beneficiaries. Dying without a Will or with an invalid Will is known as a dying intestate. Should this occur, the law allows for the State and Territory to determine how your estate will be administered which may include unnecessary tax implications for your beneficiaries.
You must also nominate an executor of the Will who will ensure your wishes are met by administering the Will. Choosing an executor requires careful consideration and it is recommended you discuss it with the person before you allocate them as the executor.
Your superannuation is excluded from your Will. Superannuation funds usually have a binding beneficiary nomination for benefits payable upon death. If there is no beneficiary nominated, superannuation payments are distributed by the superannuation trustee.
Your superannuation may be paid to your estate if:
- You have a valid binding nomination directing payment to the estate, or
- Trustee uses their discretion to pay estate, or
- Superannuation fund rules automatically direct payment into estate
A testamentary trust is a trust that arises upon death pursuant to the Will and protects assets for the beneficiaries of the estate. The trustee must follow the terms of the trust and must look after the trust property for the benefit of others. The trust will allow the trustee to allocate income and capital to beneficiaries and have power over the investments and winding up of trust.
Power of Attorney
Granting a Power of Attorney involves legally appointing a person or organisation to make decisions, sign documents and act on your behalf. In situations of medical treatment, the Power of Attorney may give and withhold consent to medical treatment (in some circumstances) on your behalf.