Life does not always go to plan. While we logically know that, most of us don’t plan for the worst - it’s all a bit morbid and time consuming.
The downside of not planning is the potential for hard earned assets to be squandered, family fall-outs, and money handed to the Government that could have been distributed in accord with your wishes. If you are a business owner, then the stakes are even higher.
As a population, planning is more important than ever because:
- The ageing demographic - 1 in 7 of us are now aged 65 and over (3.8 million)
- The baby boomer generage represent only 25% of the population but hold 55% of the wealth
- We are entering a period of intergeneration wealth transfer from the baby boomer generation
- Over the last 25 years there has been an explosion of wealth in Australia
Estate planning is simply identifying your assets and liabilities and what you want to happen to those assets if something happens to you. As part of that, you need to look at the issues that might arise and how best to manage them. All of this is then reviewed for tax outcomes and the legal requirements to provide the best care and protection for your beneficiaries.
If you are a business owner, there are also another set of issues to consider to ensure that the business can continue if you are not able to continue in your current role. Or, your beneficiaries can take their share of the value accumulated in the business. This planning will protect your beneficiaries, the business, and your business partners.
Estate planning does not have to be hard work, but it does have to be planned.
It’s also important to understand that actual wealth or the size of your estate is not the sole reason for estate planning. Estate planning is important for:
- The care and maintenace of minor children
- Managing the respective righs and expectations of beneficiaries, particularly with blended families
- Avioding disputes between family members
- Relationships outside of the immediate family
- Managing liabilites of the estate
- Assets which may not be capable of immediate realisation or where value will be diluted by realisation
- The transfer of assets through generations
Estate planning seeks to not only distribute the assets of your estate but do so in a way that protects the estate, addresses issues within the estate, and fulfils your wishes.
Your adviser at WLM can assist with your Estate Planning issues and provide suitable information and contacts to ensure your planning is appropriate for you.