Estate Planning Essentials for Australians & Australian Expats
Is having a Will enough?
Most people think that so long as they have a Will, they will have a way to ensure that their wealth is passed correctly to your loved ones. However, this is not necessarily the case and this can be true for both Australians at home and Australian expats.
The truth about Wills
A Will can help ensure the assets that form part of your estate get distributed according to your wishes. However, 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, superannuation benefits or assets held in a discretionary family trust. This can become even more complicated when dealing with overseas assets as this gives rise to multiple jurisdictions and different sets of rules.
To cover all bases, a thorough estate plan involves putting in place strategies that address all of your assets, not just those covered by your Will.
Do I need an Estate Plan?
Another common misconception is that estate planning 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 direct result, estate planning is something everyone needs to consider, regardless of your age or what stage you’re at in life.
Below is a table which highlights which assets are covered by a Will and what assets are not:
At a minimum, each individual, whether an Australian expat or resident should seek professional advice and consider having the following in place:
- a current Will to distribute estate assets;
- an Enduring Power of Attorney to cover situations where they’re unable to make financial decisions themselves;
- appropriate superannuation and insurance beneficiary nominations, and;
- Appropriate arrangements in place to distribute or pass control of specific assets that are not covered by the Will.
What are the benefits of Estate planning?
Estate planning can:
- provide certainty by getting the right assets in the hands of the right people, at the right time;
- enable you to provide for and protect your loved ones while minimising tax payable by your nominated beneficiaries, and;
- Provide certainty that your children are taken care of.
What are the consequences of NOT having an Estate Plan?
An Estate Plan is something you should consider addressing as a top priority. Don’t wait until it’s too late. If you pass away without a valid Will, intestacy legislation will determine how your estate assets are distributed among your surviving family members, which may be completely different to how you would like your assets distributed.
If you pass away without a valid superannuation or life insurance death benefit nomination, the proceeds may not be distributed according to your wishes either.
Further, 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..?
How can Ally Wealth Management Help?
With assistance from legal and tax professionals where appropriate, our team at Ally Wealth Management can:
- Ensure that you’re making the right ownership decisions when acquiring new assets or re-structuring your existing assets. For example, we can help you determine whether it’s suitable to invest in your name, your partner’s name, or jointly with your partner. We may also identify whether further tax and legal advice is required to consider another arrangement such as a trust or company.
- Determine if you have sufficient means to achieve your estate planning objectives. Additional life insurance inside or outside of superannuation may be necessary 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, we can explain superannuation death benefit and life insurance beneficiary nomination options. By making appropriate nominations now, your beneficiaries will be able to effectively and efficiently receive the death benefit when you’re no longer around.
A plan is only effective if you act on it.
Ally Wealth Management is the trusted ally in finance for Australians at home and across the globe. As both Australian expats and residents, the founders of Ally have a unique understanding of the common personal financial challenges faced.
Book your complimentary appointment with our team at Ally Wealth Management to discuss how we can help you to achieve your financial goals.
Ally Wealth Management Pty Ltd is a Corporate Authorised Representative of Sentry Advice Pty Ltd ABN 77 103 642 888. Sentry Advice holds an Australian Financial Services Licence (AFSL) No. 227 748.
General Advice Warning: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.
