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Wealth, Estate Planning - 5 min read
One of the most obvious estate planning considerations is making sure your Will is updated. Anyone who is over the age of 18 and has any assets should create a Will. Wills are fairly inexpensive to arrange, but they can make all the difference in how your estate is distributed after your death.
If you don’t have a Will, the state will decide how your financial assets and other assets will be distributed. This situation often leads to legal challenges from dissatisfied or estranged family members or other interested parties. As you can imagine, situations like these are long, difficult, and costly. It’s best to avoid these problems by creating a Will.
With a Will, you can decide who will inherit your assets: cash from your bank accounts, investments, property, vehicles, jewellery, art, and other possessions. You can also use your Will to tell your loved ones about your wishes for your funeral and burial or cremation.
Australia doesn’t have an “inheritance tax” per se, but that doesn’t mean your beneficiaries will be able to avoid other kinds of taxes. Inheritors are often hit hard with the Capital Gains tax, but there are things you can do with your estate planning to minimise the effects of such taxes.
For example, super fund benefits are tax-free if the beneficiary is a “Death Benefits Dependent” (child under the age of 18, spouse, former spouse, or interdependent relation). Depending on whom you designate as a beneficiary, you could avoid taxes. There are also other ways to minimise the tax obligations that need to be paid by your beneficiaries.
A trust created according to your Will, a testamentary trust may help you to distribute your estate in a more tax-effective manner, and it can also reduce the risk of challenges to your Will. There are several types of trusts (discretionary or fixed trust, special disability trust, etc.), and the type of trust that’s best for you will depend on your goals, your family situation, and other factors.
Trusts can be especially useful if you have dependents who are under the age of 18. It designates a trustee to manage your beneficiaries’ inheritances until you would like funds to be paid out to them. Trusts may carry risks, however, especially off other parties make claims against the trust in court.
An expert Wealth Management adviser can give you insights into your estate planning that will help you to further refine and safeguard your estate. If you haven’t talked through your plan with a Wealth Management specialist, give us a call at Altus Financial. We’ll be happy to answer your questions and offer any assistance you might need.
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