WGC can guide Clients through the maze of Estate Planning issues and - by having a detailed understanding of Clients’ financial circumstances - be in the best position to liaise with allied Professionals to ensure that the documentation being implemented adequately addresses and reflects the Clients’ Estate Planning wishes.
As unpleasant as the task is - Estate Planning is one of the necessities of life. As a Client - knowing hard-earned assets will be dealt with in the manner chosen provides peace of mind.
Estate Planning is an important part of Clients overall Financial Plan. It is about making sure that the investments Clients make now are passed on to family or beneficiaries in the most effective way.
Developing an effective Estate Plan will ensure that:
Any tax payable is minimised
The ownership of assets passes to the right beneficiaries
The assets are protected if any beneficiary has any legal issues
With family units becoming more complex - Estate Planning has become even more important in today’s society and often can involve more than a simple Will. It can be quite a complex area and it is recommended that Clients work with WGC to seek professional advice to assist with implementation upon consideration of options.
An effective Estate Plan includes tax effective Wills to protect Clients Estate and the interests of nominated beneficiaries in the event of a Clients death. Jointly held assets - trust assets and superannuation however - are not necessarily dealt with by the terms of the Will.
These are usually considered ’non-estate’ assets for Estate Planning purposes. Note there may be specific State legislation that classifies non-estate assets as ‘notional estate’ for the purposes of a family provision challenge. It is therefore important to have considered a comprehensive Estate Plan to ensure all assets are transferred according to Clients wishes in the most effective and efficient manner.
Outlined below are some factors to consider when developing an Estate Plan.
Estate Planning Strategy: An Estate Plan is designed to help protect Clients family and loved ones - minimise taxation upon transfer of assets in a legal and logical manner - as well as ensuring wishes are followed.
Enduring Power of Attorney: Making an Enduring Power of Attorney is one way of planning for the future. An Enduring Power of Attorney is a legal document that allows a Client to appoint someone (an Attorney) to make certain decisions on behalf of the Client. The power endures - or continues - if and when a Client is unable to make decisions.
Medical Treatment Decision Maker: A Medical Treatment Decision Maker is an adult appointed by a Client to make medical treatment decisions on a Clients behalf - when a Client no longer has the capacity to make those decisions.
Aged Care Directive: A legal document that can include either or both Instructional Directives with legal binding instructions about future treatment the person consents to or refuses and a Values Directive which documents the persons values and preferences for future medical treatment.
Estate Administration: When a Client passes away - leaving assets in Victoria - somebody - usually the Executor of the deceased’s Will - has to deal with the Administration of the Estate. The person does not have authority to deal with the assets of the Will until the Supreme Court issues a Grant of Representation - unless the Estate is small.
Letter of Wishes: A Letter of Wishes (sometimes called Memorandum of Wishes) are non-binding documents that provide guidance as to the object and purpose of Estate Planning documents and also allow the formal documents (such as a Will or Trust instruments) to remain flexible and broad.
Wills: A Will can help ensure a Clients wishes are carried out. Leaving a Will is the most basic of Estate Planning Strategies.
Superannuation Death Benefits: A Superannuation Death Benefit is a payment a Client makes to a dependant beneficiary for the Trustee of a Deceased Estate after the member has passed. The Superannuation Trustee will decide how the payment is distributed - but some Funds have existing and binding nominations.
Testamentary Trust: A Testamentary Trust (sometimes referred to as a Will Trust or Trust under Will) is a Trust which arises upon the death of the Testator - and which is specified in his or her Will. A Will may contain more than one Testamentary Trust - and may address all or any portion of the Estate. These Trusts can be important taxation vehicles for the beneficiaries of a deceased persons Estate Assets.
Superannuation Proceeds Trust: A Superannuation Proceeds Trust is a type of Testamentary Trust established solely to receive Superannuation Proceeds on the death of a fund member. The Trust can be established by a Clients Will or in some cases - by deed after the Client’s death.
Deceased Estates: A Deceased Estate consists of all assets and liabilities held by the deceased at the time of death. Assets may include Bank Accounts - Shareholdings - Real Estate and Personal Effects such as Furniture and Jewellery. Liabilities may include Mortgages and Personal Loans.
CGT on Deceased Estates: In most cases - ‘Beneficiaries’ who receive assets from a Deceased Estate can defer paying capital gains tax until they eventually dispose of the assets. For assets acquired post 19 September 1985 - the Beneficiary will inherit the same cost base of the Deceased - or - if acquired by the Deceased before that date - a market value cost at the Date of Death. Disposal of a family home of the Deceased can still be tax free in the hands of the Beneficiary if certain criteria are met.