It will undoubtedly be a difficult time for your family and loved ones when you die. However, with sound estate planning, you can ease their burden by ensuring that your affairs are managed by someone you trust, your assets are transferred according to your wishes, and any tax liabilities are minimised.
The first and most fundamental step in estate planning is to consider making a valid will. Your will sets out who you want to administer your estate (the executor) and how you wish your assets to be distributed. If you die without a will and are deemed ‘intestate’, your estate could be distributed according to the relevant state legislation. This may result in a distribution that is different from your wishes, add considerably to the time and cost involved, and open up the possibility of a legal challenge.
Another important element of estate planning is to think about having a current power of attorney in place. A power of attorney allows you to nominate a trusted family member or friend to make decisions and act on your behalf.
If you have a large, financially complex asset base, your estate planning needs may also include establishing some form of testamentary trust or asset management structure to help ensure your assets are passed on smoothly and tax-effectively.
Your superannuation is not automatically included in your will as part of your estate or assets, so it is important that you consider completing a binding death benefit nomination that will direct your super fund on how to deal with your superannuation.