Estate Planning

Estate planning

Understanding estate planning

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What is estate planning?

If you’ve got people in your life who you love and want to take care of, it’s wise to build an estate plan. This plan, which you can put together with the help of an estate planning specialist, will make sure loved ones are taken care of in the event of your death.

An estate plan is more than just drawing up a will. It also involves formalising how you want to be looked after (medically and financially) if something happens to you, or if you’re unable to make your own decisions later in life. Your estate plan will also clarify how you want your assets to be protected during your lifetime and distributed after your death.

How does an estate plan help?

You can make your wishes known

One of the benefits of a sound estate plan is the ability to formalise your wishes in writing. This can help if someone contests what you’ve said you want after you’ve passed away, or if you’re unable to speak for yourself.

You could minimise disagreements

Unfortunately, disputes often arise when unsettled assets need to be distributed among others—especially if there are no clear guidelines set. Being prepared with an estate plan could go a long way in preventing disputes should family members need to divide assets among themselves or make other hard decisions on your behalf.

You may improve tax consequences for your heirs

As the distribution of assets (including your income) can come with different tax obligations, a good estate plan might also minimise any tax that your heirs would need to pay. For instance, if they decide to sell something they’ve inherited, depending on the type of asset, they may need to pay capital gains tax. Estate planning, particularly with the guidance of estate planning specialists, could reduce these extra tax costs.

Key points when creating your estate plan

Consider drawing up a will and whether you want something legally binding

A solicitor or estate planning lawyer can help you draw up a will that is legally binding and covers what you’d like to happen with your assets, children (if you have any) and funeral when you die.

It’s important this document is kept up to date, and be sure any changes to your situation (marriage, divorce, separation or otherwise) are accounted for, so those who matter most are taken care of.

While it’s also possible to draw up your own will (there are various kits available online), these may not be adequate in complex situations, which is why engaging a professional is still worthwhile.

A word of warning: if your will is deemed invalid, your estate will be distributed according to the law in your state (which may not align with your wishes), and claims could be made by unintended recipients. This is why it’s a good idea to enlist the services of an estate planning specialist, even if you think your situation is relatively simple.

Review your nominated beneficiaries for any super or insurance you might have

When it comes to your super, you’ll need to do some planning in advance to make sure it’s distributed properly in the event of your passing.

During this process, take the time to nominate your beneficiaries with your super fund, and make sure you’re across how long different nominations are valid for. If you don’t make a nomination, the super fund trustee could use their discretion to determine who your super money goes to.

In addition, if you have insurance outside of super, make sure you’ve listed your beneficiaries on your insurance policy and that those beneficiaries are also kept up to date.

Consider appointing an enduring power of attorney to make decisions if you can’t

There may come a time when you’re unable to make legal or financial decisions on your own because of advanced age or medical issues. Granting power of attorney means you are designating an individual to make these decisions on your behalf if such a scenario arises.

For this reason, it’s important to choose someone you trust, as they’ll be responsible for looking after your bank accounts, ongoing bills, and even selling your house if you need to move into a care facility.

It’s also worth noting that you may be able to appoint a different type of power of attorney depending on what tasks you’d like this person to carry out on your behalf. For example, you may want your son or daughter to make general lifestyle decisions for you, while you appoint a financial adviser to make financial decisions.

Choose an executor to help carry out your wishes when you’re gone

Generally, an executor is the legal individual who manages and distributes the estate with the assistance of a solicitor, according to the terms you’ve set out in your will (which your solicitor should have a copy of).

When you nominate an executor in your will it’s important to let your family know, to avoid disputes after you die. Make sure the executor also has a good understanding of their duties and where your will and other important documents are kept. You may also want to let your family know where this information is stored.

The executor will typically be responsible for things like making funeral arrangements, ensuring your debts are paid and bank accounts closed, and collecting any life insurance.

They will also usually need to apply to the court for a grant of probate, which is a required legal step before your estate can be distributed. A grant of probate certifies that your will is valid.

Source: AMP,

What happens to my super when I die?

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You may not be aware that how and in what proportions your super is distributed can’t be covered in your will unless you’ve made the necessary arrangements with your super fund beforehand.

Why can’t super be covered in my will?

Your super can’t typically be covered by your will because your will only covers assets you own personally (things like, your house, car, investments, savings and personal items).

Your super on the other hand is held for you in a trust by your super fund trustee and governed by superannuation law, which is why different rules apply and why your super fund must be kept up to date with your instructions.

Who can I leave my super money to?

In the event of your death, your super fund must pay a death benefit to one or more people in your life who are eligible.

Your eligible super beneficiaries might include:

  • your spouse (including de facto and same sex partners), but not former spouses;
  • your children regardless of age;
  • anybody financially dependent on you when you die;
  • your estate or legal personal representative.

One reason you might nominate your estate or legal personal representative is you can then specify in your will how and to who you want to distribute your super money to, which can include eligible beneficiaries (mentioned above), as well as other people in your life.

It’s important however that you ensure the information stated in your will is up to date, so your legal personal representative pays out your super money as per your instructions.

How do I nominate my beneficiaries?

When it comes to specifying your beneficiaries, most super funds will give you several options.

These options are important to understand, particularly given that the type of nomination you choose could give you greater control over how your super benefits are distributed.

Binding nomination

If you make a binding death benefit nomination that satisfies all legal requirements, the trustee of the super fund must pay your super to the beneficiaries you have nominated, and in the proportions specified.

You should also know that there are lapsing and non-lapsing binding nominations.  Lapsing nominations typically expire every three years unless you renew them, while non-lapsing nominations may never expire.

Non-binding nomination

If you make a non-binding nomination, the trustee of the fund will have the final say over which beneficiaries receive your super and in what proportions, but your nominations will be considered.

No nomination

Depending on the product, if you don’t make a nomination the trustee will pay your death benefit to your estate, or use its discretion to determine which eligible beneficiaries the money should go to.

Super in pension phase already?

If your super is already in pension phase, then all of the above plus additional options may be available and need to be considered.

Source: AMP

Could a family dispute erupt over your will, or lack of one?

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The thought of dying isn’t a pleasant one, which is why considering how you’ll distribute your assets after you’ve gone may be something you’ve always put off for another day.

While this is understandable, you also probably don’t want inaction leading to family members becoming embroiled in a nasty inheritance dispute if you leave it too late.

On top of that, without a valid will, you run the risk of your estate being distributed according to state law, which may not align with what you had in mind either.

What Aussie seniors said on the matter of inheritance

Almost one in five Aussie seniors said in a survey they had concerns that their family would argue over their estate should they pass away, particularly in regard to property and money, with people feeling less worried there’d be arguments over sentimental items or things like cars and jewellery.

Among seniors, who were concerned that family members would argue over their estate upon their passing, about 70% were worried that disputes would negatively impact their family’s relationships.

By far the most popular strategy to minimise the risk of families fighting over estates was drawing up a will that specified in writing how an estate would be distributed.

The benefits of documenting things formally

Drawing up a will allows you to document how you want your assets to be distributed after you die.

  • This can help in the instance someone contests what you’ve said you want to happen if you’re no longer around;
  • It could go a long way in preventing disputes from arising should family members be made to divide assets among themselves;
  • You may also be able to improve tax consequences for your heirs. For instance, if they have to sell something they’ve inherited, depending on the asset, capital gains tax may be payable.

Things to consider and why communication can be beneficial

You may or may not want to distribute your assets evenly.  You may have given cash advances to help people out earlier in life.  There may be family members who are better off than others.  There may be some getting assistance via other means, while others may be less likely to use the money wisely.

At the end of the day, how you want to distribute your assets will be up to you but communicating why you’ve made certain decisions could go a long way.  Sure, it might be a hard pill to swallow, but not talking about it could cause far bigger feuds (and sadly to say, even legal battles) down the track.

Talking openly and honestly will hopefully help your family understand why you have made the decisions you’ve made and ensure everyone is on the same page.

How to formalise what you want to happen

A solicitor or estate planning lawyer can help you draw up a will that’s legally binding.  It’s important this document is kept up to date to also ensure any changes to your situation (marriage, divorce, separation or otherwise) are accounted for, so those who matter most are taken care of.

While it’s also possible to draw up your own will (there are various kits available online), these mightn’t be adequate in complex situations, which is why engaging a professional may be worthwhile.

After all, if your will is deemed invalid, your estate will be distributed according to the law in your state (which may not align with your wishes) and claims could be made by unintended recipients.

Do you need help?

Your will and broader estate plan can be a complex area and there may be legal and tax implications if you don’t set things up correctly and understand the fine print.

For these reasons, it’s very important to speak to a legal professional and your financial adviser before making any decisions and signing on the dotted line.

Source: AMP

When there is a will, there is a way

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It’s probably not something you want to think about much less discuss with your kids but like it or not, one day we all pass away, and giving our loved ones a heads up on some of our financial affairs may make the process a whole lot easier.

That’s why when it comes to estate planning it can be a good idea to call a family meeting with your beneficiaries, your financial adviser and your legal adviser.

Not only can a financial adviser keep things running smoothly and professionally but it’s also an opportunity for them to get an overview of your family’s circumstances as a whole.  This way they are in a better position to determine the best strategy for you as a family.

Here are a few of the essentials they may cover off in a family meeting.

The contents of your Will

It’s a good idea to give your loved ones a heads up about the contents of you Will – in particular who your beneficiaries are and how much they are likely to receive in the form of an inheritance, super or life insurance benefit.

While this can be a difficult conversation to have and can often cause some friction among family members, it’s also an opportunity for you to explain your decisions.  This may help in keeping everyone happy and avoiding family disputes after you’ve gone.

A testamentary trust

A testamentary trust can be a flexible way to ensure your wishes are carried out after you die.  Basically, rather than being paid directly to your beneficiaries, your money is put into a trust and administered by a trustee appointed in the Will (until it expires).  This can protect your assets against undesired tax consequences, divorce proceedings, bankruptcy and even being squandered by an irresponsible beneficiary.  So if you’re setting up a trust, now could be the best time to air it.


Unlike other assets, your superannuation is not covered by your Will so it’s important to nominate beneficiaries.  A family meeting is the perfect opportunity to set-up binding death nominations to ensure your intentions about your super are carried out.

Your powers of attorneys

Powers of attorney are an important part of your estate planning – giving someone the legal authority to look after your affairs on your behalf if you lose the capacity to do so.  This includes your enduring power of attorney, who makes financial and legal decisions and your medical power of attorney who makes your medical decisions, when you can no longer do so.  A family meeting is a great place to discuss the appointment of powers of attorney as well as discussing important issues such as your views on treatment, your healthcare directive and if possible, how you would like to grow old.

Your investments, superannuation and insurance

If you’ve got any investments, super or insurance policies tucked away, now is the time to let your kids and your adviser know about it.  Not only will your kids get a better idea of how you manage your finances (and may follow your lead) but you won’t have to worry about anything going missing after you’ve gone.

Get off on the right foot

As you can imagine, a family meeting can be quite an emotional experience and there is a lot to cover.  So chances are you’ll be grateful to have an experienced professional around to maintain a level head and keep things running smoothly.

An additional benefit of holding a family meeting is introducing your financial adviser to younger family members.  This will give you peace of mind knowing that in the event of your death, your children will already have a trusted adviser who can give them the financial support they need to manage your estate and invest any inheritance they may receive.

Better yet, now that you’ve got them in the door, your adviser may even be able to give younger family member some tips to get them started saving and investing today.

So to ensure your final wishes are met, avoid unnecessary family conflict and get your children off to a good start, plan a family meeting today.

Source: BT

Helping the grandkids

Helping the grandkids

By | Estate Planning, Holistic, Wealth Creation and Accumulation | No Comments

There is an increasing trend for Grandparents to factor in grandchildren when deciding how they want to allocate their money in their later years. For some, it may be via business succession planning, leaving a legacy for the family or simply contributing to important financial events (tertiary education, house, car etc). Passing on wealth can be one of the greatest gifts you can give your family.

With increasing child care costs and housing affordability issues, it is becoming common for Grandparents to look after the children while their parents are at work. This means Grandparents are having a greater involvement in the day-to-day lives of their grandchildren and often electing to pass on some wealth.

However, there are some traps for the unprepared and it’s important to consider the various options and risks to allow for an effective transfer of intergenerational wealth.

Asking the right questions

Typically, strategies around wealth transfer fall into the category of having “the right money in the right hands at the right time”. However, it is not always that simple.  It’s important to discuss wealth transfer in detail. Ask plenty of questions, understand what your objectives are and seek professional advice.

As an example, if you want to help your grandchildren with their first home; here are a few questions to consider above and beyond the usual cash flow, assets and liabilities:

  • Do you want to help pay for the deposit and/or repayments?
  • Do you want to invest this money in them now, at retirement or leave it in your legacy?
  • How much money will be available for the grandchildren after you have provided for your own retirement?
  • What is the income of their parents?
  • Are your grandchildren financially dependent on you?

The above considerations are very important and will help determine the appropriate strategy structure you undertake (i.e. family discretionary trusts, testamentary trusts, or gifting).

6 key issues to consider when helping out grandchildren

  1. Age and income of the grandchildren – Remember investment income for minors is taxed at penalty rates (up to an effective rate of 45%). Whereas, for over 18s, investment income up to their respective marginal tax rate may be tax free. This can be particularly important when developing strategies to help pay education costs.
  2. Centrelink benefits – It’s important to remember that if you receive a pension or part-pension from Centrelink you are only able to gift up to $30,000 every five years at a maximum of $10,000 per year without adversely affecting your entitlements.
  3. The right team of experts Selecting an appropriate Financial Adviser can make life easier as they will often access a team of other specialist experts such as Accountants and Estate Planning Lawyers – thus ensuring your advice is comprehensive and consistent across all areas.
  4. Relationship risks – Consider the risks associated with relationship breakdowns in the family such as sibling rivalry on the death of a parent or divorce of family. This may mean a well intended gift for a grandchild ends up being fought over in divorce courts. Consider if testamentary trusts or drip feeding financial assistance may be more appropriate than gifting lump sums.
  5. “Pay yourself first” – Be very clear on your retirement funding needs and look after yourself before committing to help your grandchildren. It’s a rewarding act to help out your family financially as long as you ensure you are not forgetting about yourself.
  6. Manage family risk – Families are often called on for help in the event of illness and injury of a child or grandchild. Discuss the option of funding grandchildren’s income protection or trauma insurance premiums; that way you create peace of mind and minimise financial stress if the unfortunate occurs.

For further advice on the most tax effective strategies to transfer wealth, make an appointment with us today.

Considering for estate planning? Contact Revolution Financial Advisers Toowoomba for advice.

What to consider when discussing estate planning with your loved ones

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Broaching the subject of your passing or potentially becoming mentally incapacitated is a sensitive and difficult discussion and not necessarily one that those close to you will be keen to have.

So, while it’s important to discuss your final wishes concerning the distribution of your assets with close family, it’s also critical to make sure you act on your requests as much as possible, while you are still fit and healthy.

Here are some topics to consider:

1.  Your will

Your will is a legal document that covers what you’d like to happen with your assets and allows you to appoint a guardian for your children or even detail wishes for your funeral. It’s important to have a will in place as it represents your voice after you’ve passed.

Discuss what will be included in your will and how you want your assets to be distributed. This could be a controversial subject, so make sure you iron out any family issues before you see the solicitor. If you decide to opt for writing your own will, make sure you have a solicitor or trustee review it to make sure it is legally binding.

2.  Who you would like to be the executor of your will?

Let your family know the person you have chosen to be the executor – this is the person responsible for carrying out the wishes detailed in your will. Make sure the person you’ve chosen agrees and knows the duties of an executor (which differ in each state). Also, let your executor know where your will and other important documents will be kept, such as with your solicitor or in a bank safe.

3.  Who will make your financial and lifestyle decisions if you can’t?

Family members may volunteer to help, but you will need planning ahead tools in place, including a properly documented will, Power of Attorney and Enduring Guardianship to appoint someone to make legal, financial and health decisions for you if you can’t.

4.  What are your wishes for care if you can’t look after yourself?

 The My Aged Care website ( provides a range of options from receiving help in your home to after-hospital care to transferring to an aged-care home.

5.  Are your super beneficiaries current?

Some people assume that the proceeds of their super are included in their will. This is not the case, so you need to make sure your beneficiaries are up-to-date. A beneficiary is a person who receives money or other benefits from a benefactor. In some cases, beneficiary nominations are only valid for 3 years so you should review and check your nominations regularly.

6.  What is your plan for your kids (and the pets) if you can’t care for them?

Consider appointing a legal guardian to look after your children but be aware that the court has the ability to change or remove the guardian if it is in the child’s best interest to do so. Also, check what options are available for looking after your pets when you can’t.

7.  Do you want to be, or are you already, registered as an organ donor?

Being an organ donor can be a sensitive, and sometimes controversial, family issue. There are generally three steps to consider:

  • Discover what’s involved;
  • Make the decision to donate; and
  • Discuss it with your family.

8.  Do you have specific instructions for your funeral arrangements?

Discuss this with your family as they will need to enact your wishes within days of your passing. This will be a very stressful and emotional time for them, so consider how you want to pay for your funeral and document where you want your final resting place to be.

9.  Talk to your partner about finances

Check with your bank to make sure your partner will be able to access your account after you’ve gone. This is because funds from your estate (probate) can take months before they become available to pay for funeral and other out-of- pocket expenses.

So, now you know what to think about before you start the conversation. If you really want your assets to be distributed according to your wishes, it’s a good idea to let loved ones know of your plans in advance. While it may be a difficult and emotional subject to discuss with them now – it will ensure that your wishes are known – and it will be for their benefit in the long run.

Source: AMP.

Need help with personal succession planning? Contact us today.

A Will Isn’t Always The Way

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You would have heard the saying: “where there’s a will, there’s a way”.
This statement is usually used to encourage people who are losing enthusiasm for a task or goal. But it also reflects the way many people feel about estate planning. They think that so long as you have a will, you have a way to ensure your wealth is passed correctly to your loved ones. But this is not necessarily the case.

The truth about Wills

A will can help ensure the assets that form part of your estate get distributed according to your wishes.
But did you know that a will typically only applies to personally held assets and therefore may not deal with a significant portion of your wealth? For example, the proceeds from your superannuation funds and life insurance policies don’t necessarily form part of your Estate. They can pass directly to certain beneficiaries nominated by you or go to your Estate where they’ll be dealt with by your will.

Also, some assets never form part of an estate, like jointly owned assets and assets held in a discretionary family trust.

To cover all bases, thorough estate planning (or personal succession planning as it’s also known) involves putting in place strategies that address all your assets, not just those covered by your will.

Do I need a personal succession plan?

Another common misconception is that personal succession is only for the wealthy or the elderly. However, just about every asset you own and every investment you make has estate planning implications. As a result, personal success planning is something we all need to consider, regardless of our age or stage in life.

At a minimum, every individual should have:

  • a current will to distribute estate assets
  • an Enduring Power of Attorney to cover situations where they’re unable to make financial decisions themselves, and
  • appropriate estate planning arrangements to distribute specific assets that are not covered by the will.

What are the benefits of personal succession planning?

Personal succession planning can:

  • provide certainty by getting the right assets in the hands of the right people, at the right time, and
  • enable you to provide for your loved ones while minimising tax payable by your nominated beneficiaries.

What are the consequences of not having a personal succession plan?

Personal succession is something you should address now. Don’t wait until it’s too late.
If you die without a valid will, intestacy legislation will determine how to distribute your estate assets to your surviving family members.
If you die without a valid death benefit nomination in your superannuation or life insurance, the proceeds may not be distributed according to your wishes.
And, if you’re badly injured in an accident or lose mental capacity, who will manage your affairs while you’re still alive but unable to make your own decisions?

Who should I contact to discuss my personal circumstances?

You should consider holding an initial discussion with a qualified financial adviser. With assistance from your financial adviser and, where appropriate, legal and tax professionals, you can:

  • Ensure you’re making the right ownership decisions when acquiring new assets or re-structuring your existing assets. For example, your financial adviser can help you determine whether it’s best to invest in your name, your partner’s name, joint names or with further tax and legal advice to consider another arrangement such as a trust or company.
  • Determine if you have sufficient investments to achieve your estate planning objectives. This includes holding life insurance inside or outside of superannuation to provide your family with a lump sum payment or an income stream to repay debts, meet their ongoing living expenses and cover your children’s future education costs upon your death.
  • Develop a range of strategies to provide certainty, tax efficiency and/or asset protection. For example, your financial adviser can help you make a death benefit nomination in superannuation or make a beneficiary nomination for your life insurance policy. By making appropriate nominations now, your beneficiaries will be able to effectively and efficiently receive the death benefit when you’re no longer around.

To get your estate planning affairs in order or to discuss options available to you and/or your loved ones, please contact Revolution Financial Advisers.

Source: MLC