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Estate Planning

How to make sure all your personal, financial and business affairs are taken care of when you pass away.

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What you need to know

  • Having the right estate plan in place can bring peace of mind and negate the risk of conflict about your finances when you are no longer around.
  • Your will, any life insurance proceeds and superannuation death benefit nominations may all feature in your estate planning.
  • Read on and get clued up on what needs to be included in any good estate planning checklist.

What is estate planning?

Making a plan to set out what will happen to your assets upon your death is crucial. This process is known as estate planning.

Estate planning involves developing a strategy to deal with your assets and investments when you pass away. Its aim is to provide peace of mind for you and your loved ones when you die, ensuring that your assets are passed on to your beneficiaries in the most simple and effective way.

One of the key tasks of estate planning is preparing a will. Your will provides instructions on how your estate is to be distributed amongst your nominated beneficiaries, but it's far from the only aspect you need to consider.

How do I start estate planning?

Broadly, the estate planning process can be broken down into the following steps:

  1. Take stock of your assets. Create a list of all your personal assets, as well as other assets that form part of your estate (trusts, superannuation, life insurance etc.).
  2. Identify risks. Identify any potential risks you want to plan around before and after your death, such as divorce, mental incapacity or your early death.
  3. Creating a plan. You can now work with a financial planner to work out an estate plan that is tailored to your needs and incorporates all your assets.

For help developing a comprehensive estate plan that covers all necessary issues, it’s generally recommended that you seek independent legal advice.

Work with an experienced lawyer to prepare your will. Available in Sydney, Newcastle, and the Hunter and Central Coast regions.

Your checklist for what to review when estate planning

Are my assets taxed when passed on?

The tax obligations faced by your beneficiaries vary depending on the assets they receive:

  • Capital Gains Tax (CGT) is only charged on the disposal of an asset, so CGT will not apply to a beneficiary who receives an asset. However, they’ll be liable for CGT if they choose to sell that asset.
  • The tax on superannuation death benefits varies depending on a range of factors, such as whether the recipient is your dependent, and whether the benefits are paid as a lump sum or an income stream.
  • If a beneficiary is entitled to the income of a deceased estate, that income is assessable for tax.

For more information on how your assets will be taxed, speak to your accountant or financial planner.

Insurance: Things to check

If you have insurance, you should check on a few things.

Your beneficiary

If you have a super fund there is usually insurance included. Just like your super death benefit mentioned above, if you don't nominate who the money goes to, the super trustee will decide.

If you hold a life insurance policy outside super that pays a lump sum on your death, the proceeds from the policy will go to your nominated beneficiaries.

The type of cover you have

Life insurance doesn't just cover death. There's also:

  • 'Trauma cover' that pays out if go through a major health scare e.g. heart attack,
  • 'TPD cover' that pays out if you become disabled and can't work again,
  • And 'income protection' which can keep your income going in case an illness or injury puts you out of work temporarily.

Make sure you check your life stage so see if the type of cover you have is right for you:

Life Insurance States Graph

You learn more about your life insurance needs in our guide.

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