28 Aug The importance of wills and estate planning
The importance of wills and estate planning
Not many people understand the importance of wills and estate planning until it’s too late.
However, planning your estate early and updating it regularly is critical to ensuring your wishes are carried out after you’re gone.
To help you get a better understanding of why you should invest time into planning your estate, let’s take a look at what an estate plan actually is and why it’s so important to start one now.
What is an estate plan?
An estate plan is a legal guide outlining how you’d like your assets to be dealt with when you pass away. By creating a legally binding estate plan, you are essentially safeguarding your assets and ensuring that the legacy you have created will benefit the people you choose in the way that you choose.
Benefits of estate planning:
Allocate assets the way you choose
If you die intestate i.e. you die without a will or estate plan, your assets are distributed according to the legislation of the state you reside in. This removes your ability to decide where your assets go or what portion of your assets are distributed to whom.
Dying intestate also means your loved ones will need to apply to have your estate administered, prolonging the process and essentially holding assets from those who need your support.
On the other hand, planning your estate in advance allows you to be confident that your assets will be distributed exactly as you wish and will ensure they are received as soon as possible after you die.
To protect your family & their future
Planning your estate allows peace of mind that your family will be properly cared for after you’re gone. Especially for people with young children, having a plan in place allows you to nominate guardians to care for your children and how you would like them to be raised.
As part of your plan, you will also have the opportunities to dictate who should inherit your finances and whether this be in the form of a lump sum, a trust or another financial arrangement.
Reduce tax liabilities
The tax benefits of estate planning are another key advantage to consider.
Even in the event of your death, your beneficiaries may be required to pay tax on the assets they are entitled to receive. Common taxes in such instances include income tax, Capital Gains Tax and superannuation death benefits tax.
By planning your estate, you can ensure a reduction in tax liabilities, leaving the maximum amount of your assets to your beneficiaries.
As a business owner, another advantage of estate planning is having the ability to decide who will take over and how finances will be distributed or organised. This offers complete clarity over the future of your business and ensures it carries on according to your wishes.
Implementing your estate plan
If you’re ready to start planning your estate, our team is here to support you through the process. Get in touch with us or view our estate planning guide to learn more about how we can help.