10 Estate Planning Strategies to Protect Your Family and Assets

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10 Estate Planning Strategies at a glance:

  1. Start with wealth management
  2. Consider using a Transition to Retirement pension
  3. Protect your assets and reduce risk
  4. Conduct business succession planning if you own a business
  5. Minimise your tax burden
  6. Get the right level of insurance
  7. Consider a self-managed super fund
  8. Structure your investments to pay for your own aged care fees
  9. Update your Will
  10. Seek ongoing support

While many of us don’t enjoy talking about end-of-life subjects like wills and estates, it’s important to overcome this mental obstacle and view estate planning as an integral part of your overall financial plan. When it comes right down to it, the process is about making sure your wealth and investments are handed down to your family or beneficiaries in the most effective way possible.

In many cases, family units are increasingly complex, and this makes strategic estate planning even more important. Additionally, Australians are living longer than ever before, so aged care planning has become more of a priority.

Your estate plan should be tailored specifically to your needs, your goals, and your family’s situation. While general strategies can be very helpful as springboards to a tailored plan, it’s recommended that you seek professional advice to make sure you’ve covered everything important and chosen the best options for you and your family.

In this post, we’ll discuss 10 estate planning strategies that can help you to protect your family and assets. We’ll cover wills, taxation, superannuation and other relevant topics.

 

1. Start with Wealth Management

One strategy for tackling your estate planning is to look at your overall wealth management and create a plan that will help you to accumulate the resources necessary for achieving your goals.

Estate planning requires the accounting of all of your assets, and many people find that as they sit down and start talking about their lifestyle goals in retirement and provisions for later years, they see the need to make some changes. Use the best of today’s wealth management tools to set goals, create workable solutions, and keep track of how your investments are performing.

 

2. Transition to Retirement

If you’ve reached your preservation age and are still working, consider using Transition to Retirement as a way to protect your assets or to cut back on your hours by working part-time and starting to collect a regular income stream from your superannuation.

If you haven’t yet reached your preservation age, you might want to incorporate Transition to Retirement into your long-term financial plan. Using a TTR pension can improve your overall tax payable.

 

3. Protect Your Assets & Reduce Risk

Since life is unpredictable, you need a plan for protecting your assets and reducing your risk. While it’s not possible to predict what your financial future holds, there are many strategies you can use to protect your income and assets.

 

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For instance, the way you structure your investments and your retirement savings can significantly reduce your risk and help you to achieve your goals.

 

4. Plan Your Business Exit

If you own your own business, you’ll need to think about how you will someday leave that business. The way you leave will have a big impact on what you can leave to your family and beneficiaries. 

Business succession planning will help you to prepare a plan outlining who your successor will be, how succession risks will be addressed, and how finances will work during and after the transition. This planning will also help you to address any legal issues that affect your assets and what you end up leaving to your family.

 

5. Minimise Your Tax Burden

Taxes are an important consideration of any estate plan. You can minimise the taxes your beneficiaries will pay upon your death by using one of several effective estate planning tax strategies. First, you can create a trust. Trusts can help to protect your assets during bankruptcy or divorce and provide income for children with disabilities. They can also ensure that your children receive your assets if your surviving spouse remarries.

The second strategy is to seek legal advice regarding your estate. Since costs and benefits of estate plans vary widely from person to person, it’s important to get personalised advice. Capital losses and family debts can have a big impact on taxation.

 

6. Get the Right Level of Insurance

Protecting your family and your estate from unforeseen events is one of the best ways to preserve your wealth, but with so many insurance products available today, it can be difficult to know if you’re optimising your insurance. 

 

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Spending too much on insurance policies that don’t offer the coverage you need can eat into your wealth and leave you unprotected. Instead of trying to over-insure, be smart about your needs. Seek advice about which policies and protections are best for you and your family.

 

7. Be Smart About Superannuation & SMSF

Some people choose to start a self managed super fund as a way to build and protect their wealth. This could be a good strategy for you, especially if you’re looking for better tax management, increased control over your investments, and improved direct investment risk management. SMSFs come with their drawbacks, however, they involve higher running costs, and the responsibilities are significant. Additionally, you could be charged penalties if you run into non-compliance issues. 

Working with a wealth management adviser on your superannuation or SMSF can help you to create a wealth-building strategy that complements your estate planning.

 

8. Consider Aged Care Fees

With Australians living longer than ever before, aged care should be a prime consideration in your financial and estate planning. Be aware of the increasing aged care fees and create a plan for paying them. Aged care fees span several categories: accommodation payments, basic daily care fees, means-tested fees, and fees for additional services.

In order to protect your family and assets, seek advice about how to structure your investments to pay for your own aged care costs. Some strategies, such as increasing your Age Pension, can help you to have enough cash flow to pay for these services.

 

9. Update Your Will

Your family, assets, liabilities, and goals all change from time to time, and your will should reflect these changes. We recommend reviewing your will on a regular basis with experts who can point out any problems that will lead to too much risk, inefficient taxation, and other issues that may interfere with your goals.

 

10. Seek Ongoing Support

One of the mistakes we frequently see is that people will create an estate plan and then never update it or seek advice as their situations change. Not only do families experience changes in the number of beneficiaries and particular assets, but regulations and laws can change as well. 

That’s why it’s so important to seek ongoing support for your estate planning. With regular updates to your investing strategy, legal documents, and wealth management, you can protect your family and assets and have peace of mind.

For more information about estate planning and other financial issues, get in touch with us at Altus Financial.

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Adam Montana

As a Principal Client Adviser for Altus Financial, Adam works with individuals that need structuring advice, high net worth individuals and SME corporations. His specialties include solving financial problems by analysing strategy, setting discipline, creating total financial solutions for our clients, encompassing the full range of wealth creation and protection disciplines. Let's Connect