Brendan McAllister and Lisa Kirk are authorised representatives (AR318424 and AR1004668) of Prestige Wealth Management Pty Ltd.
ABN: 93 409 856 975    AFSL: 478891

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We pride ourselves in educating our clients to understand all aspects of their strategy, what we do and what we are about. 

 

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IS YOUR WILL IN YOUR UNDIES DRAW? 

10th October 2019

A few years ago, we went to the US to celebrate the wedding for one of my good friends.  One of my best friends was heading over as well.  She has three kids, and this was her first time she and her husband had left them and it suddenly dawned on her that if something happened to them she had no idea what would happen to them – who would look after them, who would get their assets, who would manage the kids inheritance and if they had any idea of what to do.

She resolved to write her own makeshift Will and throw it in the back of her undie draw. This prompted her to act when she got home, she saw a solicitor to get her Estate Planning documents in order.

 

Thankfully her makeshift Will wasn’t needed, and she’s been travelling worry free (sort of) ever since.

Life events such as having kids and getting married are common trigger events to get your Estate Plan sorted. By the time these events occur, you’ve often acquired a reasonable amount of assets and you start to care about where they go if you passed away.  

I must admit, my Will was only created after my daughter was born.

 

What is an Estate?

An estate is simply the value of all your assets when you pass away. It important however to note that not all your assets will form part of your Estate (dealt with by your Will) when you pass away.

The table below outlines what asset will/wont form part of your Will.

 

For many couples where most assets are jointly owned, there may not be much to distribute via your Estate.  However, if something were to happen to both member of a couple, you can see that all these things added together can add up to a significant amount and why a proper Estate Plan is so important.

What is an Estate Plan?

In broad terms, an Estate plan is thinking about how much, which assets and the structure in which you leave your assets to your beneficiaries. 

As financial advisers, on our side of the fence we assist our clients with their strategies for their superannuation nominations, amounts and ownership of life and other insurance policies to ensure the people you choose to leave your assets too have enough if you passed away.

On the other side sits a solicitor, who will formalise your instructions and wishes by preparing the following legal documents (Note this is Queensland – document types may vary from state to state):

  1. Enduring Power of Attorney – this permits another trusted person (usually your partner in the first instance) to make financial decisions on your behalf.  It can commence immediately or when you lose capacity to make decisions.

  2. Will – provides instructions on how you wish to distribute your assets when you pass away.  It also nominates guardians for any of your minor children.

How can I make sure certain people can’t touch my money when I pass away?

This is a common concern that we hear and one so easily put to bed with a good Estate Plan.  It’s also the reason why so many people put off preparing them. A common scenario is when dealing with a couple where one partner has a child from a previous relationship. 

Take Alice for example:

  • Alice naturally wants to provide for her minor son Jimmy if she was to pass away

  • Alice and Jimmy’s father, Bob are no longer together.  They broke up as Bob was spendthrift.

  • Alice passes away and $200,000 of her Estate is left to Jimmy

  • As Jimmy’s guardian, guess who has control of these funds until Jimmy turns 18…………you guessed it, Bob.

  • (Alice turns in her grave)
     

A good solicitor experienced in Estate Planning will be able to accommodate any concerns and often foresee any issues that may arise, even if you don’t think your situation is complicated.  Their main aim is to protect your assets, so they are benefited by your beneficiaries only and receive the benefits tax-efficiently.

Nothing ruins a family reunion like a penny dropped!

This saying is very appropriate when it comes to talking about Estate planning as without clear instructions, opportunity is created (I’ll just “borrow” money from Jimmy’s funds, Bitcoin sounds like a great investment for Jimmy), tempting the most trusted people.

It’s best to remove the temptation by sorting out your wishes beforehand with a proper Estate Plan.  After all, we’re all eventually going to use it and investing in a well thought plan now means that you will have peace of mind until then. 

A good Estate Plan will last the distance, often accounting for future kids and all going to plan, will only need updating as the circumstances of the people within it (Will maker, executors, trustees, beneficiaries) change, for example when minor children become adult children.

Happy Estate Planning!

If you would like to know more about how to get your Estate Plan sorted, feel free to contact us.  We are more than happy to steer you in the right direction.