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Top 3 things to consider when it comes to estate planning

Estate Planning

Estate planning is the process of structuring your financial and personal affairs so that your assets and personal possessions are distributed according to your wishes when you pass away. Planning how to transfer your assets to your loved ones can remove unnecessary stress and financial hardship. 

It’s important to ensure that the assets you have accumulated over your lifetime are left for those most important to you. Getting the planning right can help avoid adverse and unintended consequences such as: 

  • the wrong people receiving benefits or assets 
  • high fees and costs eroding the value of your gift 
  • delays in distributing your assets 
  • potential challenges by disgruntled beneficiaries and others 
  • additional tax being incurred. 

Estate planning involves more than just creating a will, although a will is an important part of estate planning. Having a will alone may not necessarily deal with the effective distribution of your assets, which is why it’s important to consider your estate planning carefully to ensure it reflects your circumstances, wishes and needs.


Did you know: Leaving an inheritance and the challenges of wills

Did you know: Leaving an inheritance and the challenges of wills

Did you know: Leaving an inheritance and the challenges of wills

Source: Core Data 2020


Important considerations when it comes to estate planning

1. Asset ownership

Understanding the assets you own, their legal structure and how they will be dealt with and distributed on your passing is important. How you choose to set up your asset ownership will depend on the type of asset and the level of complexity in your estate plan.

You may want to consider how your assets are owned, particularly if you have complex family arrangements or if you have specific tax management requirements.

You should consider consulting with your financial adviser when considering making an investment or changing the ownership arrangement of your assets to ensure that is is consistent with your estate planning needs.


2. Having a will, appointing the right executor and Power of Attorney

Dying without a valid will means that intestacy laws decide who receives your assets. These laws vary between states and territories but generally there are set rules regarding who receives your assets and in what proportion they are distributed. Having a will and documenting how you would like your assets to be distributed after you’re gone is essential in meeting your wishes.

Put simply, a will is a legal document that sets out how you would like your assets to be distributed after you’re gone. It can cover some other requests, such as nominating guardians for children who are minors at the time you die, as well as funeral and burial wishes. Appointing the right executor to manage your estate is one of the most important decisions you will make when it comes to estate planning. When you pass away and your will is accepted for probate, your executor ‘steps into your shoes’ meaning they can perform all the legal tasks you used to do.

Appointing a Power of Attorney is just as important to ensure your wealth is distributed according to your wishes if you lose capacity and cannot make decisions before you die because of an accident or ill health. You should choose an appointed attorney you can trust that will act honestly, diligently and in good faith, act with reasonable skill and care and keep accurate records and accounts.


3. Considering your superannuation nominations

Superannuation is a major investment for many Australians. It is important to consider your superannuation assets when formulating your estate planning strategy.

Superannuation does not automatically form part of an estate and therefore will not automatically be dealt with under your will. A superannuation fund’s rules sets out how and to whom a superannuation death benefit payment can be paid. Any life insurance component of your superannuation will also form part of any death benefit payment made.

It is important to ensure you understand exactly how your superannuation beneficiary nominations will be treated by your superannuation fund and the potential impact on the benefit value after any tax that might apply. Nominating a non-tax dependant to receive your superannuation benefits may result in a reduction in the benefit payment amount to the nominated beneficiary.


Generation Life Investment Bonds – another tool to managing estate planning?

A Generation Life LifeBuilder investment bond can be a cost effective, tax-effective, and convenient way to pass on your wealth to your dependants and others with minimal fuss.

The power of investment bonds for estate planning:

Non-Estate Asset

Can be structured to pass directly to beneficiaries or intended recipients

Complete Control & Certainty

Be in control of transferring wealth with options to manage how and when funds can be accessed

Transferability / Portability

Automatic transfer of ownership to nominated recipients without any tax impact

Download our Generation Life Estate Planning Guide

Planning how to transfer your assets to your loved ones can remove unnecessary stress and create certainty to ensure the right assets go to the right people, at the right time, with minimal fuss, expense, and inconvenience. Our comprehensive Estate Planning Guide helps you understand all the important considerations when structuring your estate plan as well as how investment bonds can help with your estate planning needs.

When considering the right estate planning approach for each of your assets, we recommend consulting a financial adviser to make sure your current and future investments are structured to meet your estate planning objectives.