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Estate Planning

Estate planning is a key part of organising your financial affairs and protecting your family. Estate planning allows you to distribute your assets in the manner in which you wish. It may take into account family factors, protection of your spouse, financial dependents and children, and tax planning. The role of financial advisers is to facilitate the strategic estate planning considerations and implementation. For many people a financial adviser can simplify estate planning and help reduce its cost. Estate planning services provided by financial advisers greatly reduce the stress of and inconvenience to clients whether the estate planning is simple or highly complicated.

Legal opinions and legal work in relation to estate planning services may only be undertaken by legal practitioners. However, the knowledge of financial advisers can be helpful to clients to guide and facilitate the process, and in any event should be a part of the financial advice relationship.

Estate planning Australia is a term that for most people with or without an owned family home, may mean something as simple and costless as the provision of a death nomination for their superannuation. This is typically done at no additional cost to the ongoing arrangements between a client and their financial adviser, but nevertheless for the reasons described below is important.

Where a family home is owned, if it is owned as a joint tenants by a couple then this asset does not form part of the estate and ownership goes directly to the surviving spouse. Accordingly, with the organisational assistance of a financial adviser, estate planning services can be very efficient and minimal in cost.

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In other instances, where there are other assets and family entities the facilitation and financial skills and experience provided by a financial adviser’s estate planning services, are critical as they include estate planning strategies. Lawyers provide legal advice but they cannot provide financial advice. In more complex situations the term estate planning Australia means a lawyer and financial adviser working together to organise our client and ensure that their wishes are implemented.

When considering wills and estate planning both the lawyer and the financial adviser enable the client to achieve their objectives including protecting their family, understanding the tax position and making sure that their wishes are implemented upon passing. Wills and estate planning are a growing area of litigation and disputation within families but the risk can be mitigated with expert advice.

Blended families are very common, which means that between the spouses, the position of the children of the surviving spouse can benefit in a way that was not intended by the other spouse, who has passed. These types of issues need to be considered.

In relation to superannuation, as noted above estate planning services may be as simple as a death nomination but without one in place, the superannuation trustee is left to decide who benefits from your superannuation. Even where a binding death benefit is in place, there are only certain classes of persons that the superannuation trustee may pay.

However by completing the death nomination with a legal personal representative (sometimes referred to as an executor) nominated as the nominee, then the superannuation can be paid into the estate and distributed in accordance with the will. In such situations, persons that the superannuation trustee cannot or will not pay superannuation can be the beneficiaries.

There are different types of death benefit nominations and a financial adviser has the expertise to know when to use which type of nomination for a particular situation. Hence the importance of obtaining estate planning advice. Further there are circumstances where death nominations lapse, which means they discontinue to have legal effect.

If a client passes without having had estate planning which may be as simple as a death nomination or may include a will, then others such as a court will make decisions as to the distribution of the client’s assets. This can be a source of disputation and legal proceedings.

When someone does pass away, typically the family needs to apply for probate for permission to distribute the person’s assets, and where the court does not have the benefit of a will or other estate planning then the court does not know the person’s wishes but will attempt to find a solution.

At Setch we assist our clients and this assistance is scaled to the needs of the situation, and usually a part of our ongoing arrangements with our clients without additional cost (unless there are particularly unusual or complex matters to resolve).

Life is a journey, it is unpredictable

How that journey unfolds for each person varies considerably. We use our experience to help you to make better financial decisions in unpredictable times and to ensure that changes in your circumstances, health crisis, divorce, inheritance, investments, are taken into consideration.
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Comprehensive Will and Power of Attorney Guidance

We emphasise the importance of having a well-crafted Will and Power of Attorney, guiding you through these critical components to safeguard your interests and those of your loved ones.

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Case studies

Superannuation and Debt Management

Robert is 59 years old and single. He earns over $150,000 but still has a mortgage, a car loan and personal debt, and is somewhat exposed to rising interest rates.

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Mortgage, Investments and Insurance

Costa and Susan have two children and are in their early thirties. They have a mortgage and surplus savings, they are looking for ways to accumulate wealth and want to consider insurance.

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Retiring Early

Matthew is 49 years old and has children from a previous relationship. He has a house, a car, a boat and a motorbike but a low super balance.

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Portfolio Construction and Wealth Management

Peter and Aisha are in their 40s. Peter is in the construction industry but has not been happy with the performance of his superannuation. He notices that many of the large superannuation funds have investments in office buildings and is curious how infrastructure projects will perform financially as interest rates rise and the risks of these assets classes.

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Investments and Superannuation in the context of Relationship Separation

Sandra is 52 years old and has recently separated from her partner. Sandra owns a house with a mortgage from a previous relationship, and she owns a property with her recent ex-partner, and is looking for guidance in relation to the financial aspects of the separation and how to manage her investments and superannuation.

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Insurance and Wealth Accumulation

Robin and Noa have two young children and are 40 years old. Robin earns close to $90,000 and Noa earns close to $160,000. They have a mortgage and a personal loan, with monthly savings of about $750.

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Financial advice for Blended Families

Weng and Karen are 62 years old and 54 years old respectively and have non-dependent children from previous relationships. They have been divorced.

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Financial Advice for Young Families

Patrick is a devoted father with a young family. He has a solid income and wants his superannuation to work hard for his family’s future. Like many Australians, his superannuation contributions are directed to a fund selected by his employer, which includes basic insurance arrangements. Patrick's scenario is common for people with growing families.

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Wealth Accumulation including Ethical, Sustainable and Governance Investing

Thao is in her late twenties and single. She recently bought an apartment but is renting, and has an interest in wealth accumulation with an ESG theme. Further, one of her friends was in an accident and did not have insurance in place.

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Insurance

Brydon is 37 years old and has been working in the mining industry and contributing to a default superannuation fund offered by his employer. His family circumstances have changed significantly since he started working, in that he has a partner and two children.

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Frequently asked questions

Estate planning is the process by which you organise your financial affairs so that upon your passing your assets are distributed in the manner in accordance with your wishes. For most people it can be made quite simple with the assistance of a financial planner or financial adviser.

If you have not completed the legally recorgnised forms then your wishes as to how your assets are to be distributed, may not be implemented. If you have not completed any forms or documentation about your wishes as to how your assets are to be distributed, then your wishes may be unknown. This can be a source of disputation.

Usually, a court will need to decide how your assets are distributed. It makes it difficult for the court and your surviving family, amd may be a source of litigation and / or disputation.

An executor is appointed by your will and their role is to implement your instructions as to how your assets are to be distributed upon your passing.

There is no complete way to protect your estate from being contested, and the answer will depend on the circumstances. However, having the right documentation in place such as a valid will and death nomination (for your super) is a good start. Sometimes it is useful to discuss your will and death nomination, or their contents with your family so that they understand your decisions and there are no surprises. However, this depends on your family and their personalities.

You need a reliable and honest person that is generally younger than you. The person needs to be responsible and preferably respected and trusted by your beneficiaries.

Setch can help most clients organise their financial affairs and estate planning needs in a simple and cost effective manner. For more complex estates or financial affairs, we will use our experience and capability to coordinate with a legal practitioner. We take the stress and inconvenience out of estate planning, and our understanding of your finances is usually helpful to the estate planning and process.

Our other services

Superannuation Investment and Portfolio Construction

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Superannuation and Wealth Accumulation

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Debt Management

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Pre-Retirement Planning

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