As the ATO intensifies its efforts to recover unpaid tax debt, with a particular focus on personal estates, now is the time to ensure your estate planning affairs are in order. Poor planning can lead to legal and financial complications, not just for businesses, but for families as well. A well-structured estate plan protects assets, ensures your wishes are fulfilled and prevents unnecessary disputes.
This is an opportune time to review your estate plan, whether personal or business-related. Estate planning often takes a backseat to daily demands, but failing to plan can leave your loved ones vulnerable.
At Zervos Lawyers, we outline key considerations to help you take proactive steps in securing your legacy.
Life Events & Milestones
Changes such as marriage, divorce or the birth of a child can significantly affect your Will. For example, marriage revokes an existing will unless it specifically contemplates the marriage and divorce removes your former spouse as a beneficiary. Regularly updating your Will ensures it accurately reflects your current circumstances.
Superannuation
Your superannuation and life insurance may not form part of your estate by default and the trustee of your superfund has the discretion to nominate who receives your entitlements. Reviewing your Binding Death Benefit Nominations (BDBNs) and considering whether to direct these benefits to the Legal Personal Representative of your Estate is essential, as parents, siblings and grandchildren are not automatically eligible to receive superannuation death benefits.
Self-Managed Super Funds (SMSFs)
For SMSFs, it is crucial to plan for the control of the fund in the event of your incapacity or death. Without proper arrangements, the control of your SMSF could pass to someone who does not act in accordance with your wishes. Ensuring your BDBN is current and valid and nominating a successor trustee or appointing someone in your Will to manage the fund, can safeguard the future of your SMSF.
Life Insurance
A fundamental component of an estate plan is life insurance, particularly for those with a mortgage or dependent children. Nominating your Estate as the beneficiary can provide tax advantages and ensure proceeds align with your estate planning goals.
Business Succession & Trust Consideration
If you own a business or manage a family trust, your estate plan should address who will take over these responsibilities. Clear instructions ensure your business continues to operate smoothly or transitions as per your wishes, while your trust assets are managed in line with the trust deed.
Tax Considerations
In establishing your estate plan, professional tax and accounting advice is crucial. Areas such as superannuation, life insurance, trusts, SMSFs and provisions for children often involve complex tax implications. Expert guidance from tax and accounting professionals ensures your Estate is structured to maximise benefits, minimise tax exposure and comply with relevant tax laws, facilitating a more efficient transfer of wealth and better protection of your assets.
Guardianship for Minor Children
If you have young children, appointing a guardian in your Will can provide clarity about your wishes for their care and maintenance. This is not legally binding, however offers valuable guidance to decision-makers in relation to use of the family home for the children, education and other related expenses.
Planning for Incapacity
Life is unpredictable. Regardless of your age or health, appointing someone you trust to make financial legal, medical and personal decisions on your behalf ensures your wishes are followed in the event of incapacity. Without these safeguards, decisions may be made by an administrator or guardian appointed by Victorian Civil Administrative Tribunal and their decisions may not align with your preferences or the preferences of your loved ones.
The Benefits of Regular Reviews
Estate planning is not a “set and forget” process. Regularly reviewing and updating your Will and associated estate documents ensures they remain valid and relevant, particularly in light of changes in personal circumstances, legal requirements or financial arrangements.
How Zervos Lawyers Can Assist
At Zervos Lawyers, our Estate Planning team specializes in guiding clients through the complexities of estate planning. We provide tailored advice to safeguard your wishes and protect your loved ones.
Dimitria Kastanis | Lawyer
E dimitriak@zervoslawyers.com.au
Disclaimer
The content of this newsletter is provided for informational purposes only to offer general insights and an overview of the law. It is not intended to be legal, accounting or tax advice, nor does it consider your specific objectives, circumstances or needs. Zervos Lawyers and the authors accept no responsibility for any loss incurred by individuals acting or refraining from acting based on the material contained herein. We strongly encourage you to seek tailored professional advice before making any decisions.
