Estate planning should be viewed as an integral part of your overall financial plan, as it can provide you with peace of mind knowing you are leaving your legacy to the ones who matter most to you. 

While it can be uncomfortable to discuss matters surrounding end-of-life subjects such as death, wills and estates, these conversations are important to be had as early as possible with your loved ones. 

What is Estate Planning?

Estate planning involves preparing all your assets, properties, and belongings so you can put in place the appropriate strategies of how to handle them right after you have passed. Basically, it states your last wishes and the direction by which all your belongings and financial assets would be dealt with, either passing them on to your loved ones or providing them to another relevant party or entity.

Estate planning can help eliminate some of the potential legal stresses for your family members as they will know exactly what you want in the event of your passing.  

Many Australians have a will, but so many would also benefit from a comprehensive estate plan. 

A well-prepared and executed estate plan can ensure the right assets go to the right people at the right time, in an efficient and tax-effective manner.

If you want to get this process of preparation right, you may need to consider a few important things first. 

Here are three tips and recommendations you can use to help get you started on your estate planning.

1. Make a Complete List of All Your Assets

This may be your first step to your estate plan since you will not be able to initiate an estate plan without indicating all of your valuables. Having an incomplete list can cause confusion for the ones handling your assets and possibly cause conflict amongst your recipients. 

By listing down your property, your financials, and any other valuable assets, you can accurately establish and organise your asset distribution adequately.

If you need support in understanding what you can list, it may be worthwhile seeking financial advice and help you prepare your estate plan.

2. Choose an Executor You Can Trust

An executor is nominated as your trustee and will carry out your final wishes and estate plan right after you pass away. This person must be legitimate, validated, and well-versed within the technicalities of estate planning. 

Understandably, it can be difficult trying to find a trustworthy person to do this crucial task once you’re gone. Nevertheless, it’s a title you need to appoint to protect your best interests. 

A good rule of thumb is to go for a person who has nothing to gain from your will and exercises pure commitment and honest service to your wishes.

3. Consider a Testamentary Trust

A testamentary trust is something that you can choose to implement within your will. Its goal is to safeguard all of your assets and activates the distribution right after you pass. 

Importantly, this allows you to incorporate certain conditions on the distribution of your assets and how they are to be specifically managed by your nominated beneficiaries.  

The benefits of establishing a testamentary trust include:

• Protection From Bankruptcy – Your appointed trustee can protect your assets from your beneficiary if in the case they went bankrupt within your passing. This can be for the purpose of ensuring your assets don’t become a part of your beneficiary’s estate for bankruptcy. 
• Protection From Financial Implications of a Divorce or Separation – Under the current Australian law, your Trust may not be subject to a Family Court Order in the event of marriage or relationship breakdown. 
• Taxation Advantages – Taxable income generated by your Trust can be allocated among the beneficiaries of your Trust in a tax-effective manner. 

Getting your estate plan right can have some difficulties, however, they can be managed effectively with the right support. By listing your assets, choosing a trusted executor, and establishing a testamentary trust, you have more potential of drafting an estate plan free from misinterpretations and problems.

Save your loved ones from stress and Heartache with Estate Planning from Hyland Financial Planning

Leaving something behind for your loved ones by establishing an estate plan as soon as possible. Your loved ones would be more than happy to commemorate your kindness, even after you’re gone.

If you are looking for a financial adviser to support you with estate planning in Sydney, look no further than Hyland Financial Planning. We are a Sydney financial planning company specialising in strategic financial advice, wealth creation, and retirement planning.

Contact us today to discuss your estate planning and financial options for the future.