Estate Planning is not just about Wills, it is much more than that. It is about making sound and well informed strategic financial decisions to benefit those you wish to receive your assets when you die.

As such it is substantially about financial planning involving the use of traditional estate planning methods such as Wills, Powers of Attorney and Trusts.

Very importantly, superannuation is increasingly the major asset that people have but it is not covered by a Will; its treatment on the death of the owner is governed by different legislation and policies.

This means that estate planning may be complex and should not be done without advice or by relying on commercially available Will forms.

An Estate plan is a strategy devised to give:

Financial security for a person and an ability to meet lifestyle expectations over your life span
A seamless cost-effective passing of assets to the person's beneficiaries on death
Include both superannuation and non-superannuation assets

It takes into account a vast number of factors and strategies including:

Setting objectives
Planning to maximize lifestyle and effectively passing on assets after death
Advice on how your assets can be best transferred, particularly where minor dependents are involved
Advising where vulnerable dependents are involved, such as physically or intellectually challenged
Appropriate investment strategies for individuals, trusts and the like
Appointing capable and trusted people to act as trustees, legal personal representatives, guardians and to exercise powers of attorney

Serious problems can arise if individuals ignore their estate planning or act without advice. For example, payment of superannuation benefits after death can incur tax up to the top marginal tax rate if proper steps are not taken.

Estate plans must be developed for the individual and reviewed regularly, particularly where life events occur such as marriage or remarriage, entering relationships, serious illness, death, changes in financial or business circumstances.

Where a person dies without a Will, i.e. intestate, the estate is divided among beneficiaries according to a legislated formula. This formula varies between states but in Victoria the first $100,000 is given to the surviving spouse and any remainder divided between that spouse and all children. This may not be a suitable arrangement for many reasons.

Roles and Responsibilities in Estate Planning

Financial planners have a crucial role in estate planning because it is an extension of their primary role. In addition, only a properly licensed and accredited financial planner is able to legally provide advice on financial strategies and products.

Estate planning requires the collaboration between you, your financial planner and your lawyer, to achieve your goals and objectives for your beneficiaries.

We work with lawyers who are accredited specialists and experts to ensure that a client gets the best result financially as well as having the most effective and efficient structure for managing the estate.

Your lawyer will apply his or her technical legal knowledge to implement the strategy and suggest ways in which the strategy may be strengthened or can be protected.

One sad fact of life is that death is irreversible and permanent. People cannot come back to life to make the decisions they should have made beforehand.

Powers of Attorney

Much more stressful and financially burdensome situations often arise when a person suffers a major illness or trauma. These situations need more financial resources, especially if the condition is a protracted one and they also require someone else to have the authority to make very important decisions on financial management, medical treatment or accommodation. There are different types of Powers of Attorney to manage these situations:- Enduring, Medical, Financial and General, but each Australian state has legislation that differs to varying degrees

These circumstances require people to have adequate financial assets that are readily available. They must also have granted authority, via the appropriate Power of Attorney, to trusted, capable and willing persons. The possibility of these situations arising is often ignored or ‘put off until later’. Again, trying to grant a power of attorney after the event is often too late and the intervention of tribunals or courts may be required which can be a lengthy process.

Continual Review

As peoples’ circumstances and assets change so should their estate planning strategy. We view estate planning as an integral part of your overall financial plan and essential as you grow your assets and create more complex family arrangements. As such, it is part of the regular review services offered to our retainer clients.

Pentad is ideally situated to not only provide a comprehensive estate plan but assist and co-ordinate those other essential services required.

Contact us today on (03) 9813-0133 to find out more about Pentad's Estate Planning Services and how Pentad can help you achieve your financial goals.