Estate Planning: What It Is & Why It Matters

By October 6, 2021 No Comments

What Is Estate Planning? 

Estate planning is a series of actions an individual takes to ensure financial security and surety in the event of their passing away, or incapacity. It provides the infrastructure to ensure that their financial wishes are adhered to, most notably with regards to the distribution of wealth and assets.

Many Australians might consider the provision of a will as being the lone necessity of estate planning, however it is but one component of a larger process. It’s often the case, when we speak with business owners, that they don’t fully comprehend the importance of a will. This might mean they don’t have one in place, or it is now outdated.

Given our experience at Equil Advisory in assisting our clients secure the future of their estate, we’d like to share some of the key factors for you to consider.

Do I Need A Will?

The provision of a will is the primary means by which people nominate the beneficiaries of their estate. It is drafted by either the individual themselves, their solicitor or a public trustee. It is a legal document that dictates how your finances are dispersed and to whom. It additionally nominates an executor and trustee to act in accordance with your wishes.

Need is a very strong word – research commissioned by Maurice Blackburn found that over half of Australians aged 18+ do not have a will, yet their estate is still ultimately dispersed in the event of their passing. However, it can be a far more costly and time-consuming process in circumstances where a will is not present. When considering your own finances, there are some points to take into account: 

Do I Have Any Beneficiaries?

Family, friends, charities – anyone to whom you personally would like to see your estate and wealth passed to is a beneficiary, however that passage is not guaranteed without certain safeguards. A will provides a legal structure to ensure that this distribution occurs according specifically to your wishes. 

How Large Is My Estate?

The larger the estate, the greater the sense of urgency to ensure that its future is secured. Larger estates can be subject to more serious litigation attempts, and usually also contain a wider and more complex distribution of assets. Additionally, beneficiaries may be subjected to a larger tax bill in the event of no estate planning mechanisms.

What Else Do I Need?

Formal Power Of Attorney

You may think that your spouse or partner can make decisions on your behalf in the event you were medically unable to do so, however without a formal power of attorney, these individuals do not qualify.

Death Benefit Nominations

This formally dictates how your accumulated superannuation will be dispersed. It does not replace the function of a will, however is useful in conjunction with one.

How Do I Even Get Started?

The thought of estate planning can be understandably intimidating. The documents involved are legal by nature, and need to be drafted with the utmost care and professionalism. Whilst DIY solutions exist, the far safer solution is to contact the appropriate professionals.

At Equil, we’ve assisted various client’s secure the future of their estate. If you’d like to get started, we have the experience and expertise to align you with the right partner.