It’s always good to start with a definition. Estate planning is the distribution of the right assets to the right people at the right time. There are a number of ways of doing this in Australia, but by far the most cost-effective and tax-effective is to have an up-to-date will that reflects your wishes.

Currently, more than 50% of the adult population in Australia does not have a will. This means on the current trajectory, 50% of Australians will die ‘intestate’, meaning the State Succession Act will deal with the issue. Dying without a valid will means the Estate is divided according to the Qld 1981 Succession Act. If you are married or in a de facto relationship, then your spouse inherits the first $150,000 of household belongings and only one-third of the remainder of the Estate. This can significantly impact the livelihood of the remaining spouse, not to mention the relationships between the children and the remaining spouse.

I turn now to the remaining 50% of the adult population who have wills, the vast majority of which have been executed via will kits purchased at news agencies. In most cases, these wills have not been properly executed and no longer reflect the will maker’s current situation and wishes.

Equally, the same percentages are reflected in the take-up of the most important document of all – the Enduring Power of Attorney. This is the document everyone needs while they are alive. If you are unconscious in a hospital bed, you expect to be looked after by medical professionals. But while medical professionals are attending to you, who is attending to your home affairs, paying the mortgage and the household bills, dealing with your business and investment interests, acting on your behalf and dealing with the medical professionals? Only an Enduring Power of Attorney allows this to occur.

Your will deals with assets held in your personal name that pass to your Estate following your death. However, the will does not control assets owned jointly, superannuation, or Trust structures. For these reasons, it is critical to have a robust estate plan that will deal holistically with your assets and wishes. Otherwise, there may be unintended consequences and adverse tax events.

Fail to plan – Plan to fail
At Future Gen, Estate Planning is one of our specialties. We also have the services of Greg Rowell and Rowell Legal, who specialise in estate law, available in-house. Together, we are able to prepare a total solution.

If any items in this week’s communication have piqued your interest, please feel free to contact us.