DO YOU HAVE AN ADEQUATE WILL AND ESTATE PLAN?
Estate planning involves much more than simply having a Will, particularly if you own a business or if you own more complex assets such as companies, family trusts or a self managed superannuation fund.
Many people take great care in structuring their affairs during their lifetime with asset protection and tax minimisation in mind, but do not structure their estate plan to achieve the same objectives.
However, with the appropriate advice you can still achieve those objectives while also creating an uncomplicated estate plan which is easy for your executors to administer and makes provision for all your intended beneficiaries.
In fact, doing so is likely to save your executors and beneficiaries a great deal of time, cost and distress in trying to sort out your affairs after your death if you do not have the correct documents in place.
Where to start?
You should think about what assets you have and whether they are held in your personal name or are they owned by company or a family trust as this will impact how you will need to structure your estate plan.
If your assets are in your personal name, you have the ability to gift them to whomever you chose, but if they are owned by a company or trust you will need to consider:
- Who will control the assets in the event of your death
- Is there a trust deed or shareholders’ agreement in place which may dictate what will happen to the assets
- Will the company or trust continue on as they are, or should they be wound up
- If there are any debts secured by the assets, how will they be repaid
- What is the most tax effective solution
- Do you need to consider asset protection for your beneficiaries in relation to potential creditors, family disputes or other personal issues such as mental incapacity or drug and alcohol abuse
Do you own a business?
If you are a business owner, you should not only consider an estate plan (what is to happen after your death) but also a succession plan for when you want to retire or simply allow other people to become involved in your business. This could involve a sale of the business to a third party, or you may have children who want to take over the “family business” or even current business partners, associates or employees who may want to become involved.
If you own a business jointly with another person you should discuss with them your intentions for the business if one of you died, became mentally or physically incapacitated or simply wished to retire, and have a written agreement in place to deal with each scenario. This is what is commonly referred to as a succession plan. Your Will and personal estate plan should then be prepared to reflect that agreement.
It is important to have these in place so that your executors and beneficiaries clearly understand what your wishes are in relation to your business. Disputes can often arise when family members try to become involved in a business they are unfamiliar with or attempt to force a sale of the business, leaving your business partner and employees potentially unhappy. This creates unnecessary legal costs, potential tax liabilities and other financial losses which diminish your estate.
A properly considered succession and estate plan can help avoid disputes and protect the interests of your beneficiaries as well as your business and the value of your estate.
In relation to your other assets, you may wish to consider the following:
- Do you have a significant amount invested in superannuation (either self managed or otherwise), and if so do you have the appropriate documents in place to deal with your superannuation on your death
- Is your home owned with your spouse as joint tenants (where ownership simply reverts to the surviving tenant) or tenants in common (where you each own 50% or other share)
- Have you married or divorced since your last Will was made, or has there been any significant change in your personal or financial circumstances since your last Will was made
- If you intend to leave 100% of your assets to your spouse, have you considered what could happen to those assets if your spouse was to remarry after your death
- Do you have a “blended family” including step-children or a de facto spouse for which provision should be made
- Have you received appropriate legal advice about making adequate provision for family members and other dependants in accordance with the Succession Act 2006 (NSW)
- Do you have enough equity in your estate or life insurance to cover your debts upon your death
How we can assist you
We have lawyers who are highly experienced in the areas of Wills, succession planning and estate planning who can help you with the following:
- preparing your Will, including Wills that contain testamentary trusts if required
- enduring powers of attorney and enduring guardian appointments
- binding death benefit nominations for your superannuation fund
- business succession plans, buy-sell agreements and advice regarding insurance/debt
- probate and estate administration
- tax and structuring advice
- Wills and estates disputes and litigation
For further information, please contact:
Catherine Vincent Senior Associate Phone: (02) 9267 6263 Email: firstname.lastname@example.org
Greg Jemmeson Partner Phone: (02) 9267 6263 Email: email@example.com
Disclaimer: The information in this article is correct as at 18 March 2015. This information is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.