Estate Planning

12 Essential Elements for Estate Planning

Every Family is Different

Estate planning is not just making a new will which takes effect once you pass away and the Supreme Court has issued a Grant of Probate. It’s the process of arranging your affairs for the rest of your life and following your death.

• In Estate Planning, your individual family circumstances including home ownership, business ownership or employment, and any existing will needs to be considered.
• Where you own your home as joint tenants, if one of you dies, it passes by survivorship to the other and does not form part of the deceased’s estate.
• This works well for a first marriage.
• However in a blended family, in order to preserve wealth within a bloodline, ownership as tenants in common of the primary residence may alternatively be used. Although the ratio of ownership does not have to be 50/50, it is generally expected that it will be. The tenants in common methodology can be used as a method of confirming the contribution of the bloodlines at the start of the relationship. Your Will may be drafted so that your wealth follows your bloodline.

Tax Planning and Discretionary Trusts

• If you are running or starting a business today, you might be advised to establish a discretionary family trust and let that trust effectively trade as the business, rather than you holding the shares personally. To do this, you would consider establishing a corporate trustee and that trustee would effectively hold all the shares in the business.
• Although there is no longer any stamp duty on the transfer of shares, the main concern with establishing a discretionary trust is Capital Gains Tax (CGT) and ongoing state taxes.
• It is important to review and revise your existing will as part of the estate planning process to ensure it is up to date. It needs to be remembered that this is only a part of the process.

Enduring Power of Attorney

• We recommend you consider executing an Enduring Power of Attorney to have effect while you’re alive if you lose capacity to make your own decisions. You can make an Enduring Power of Attorney for personal and/or financial matters. Your Enduring Power of Attorney should commence when a medical practitioner certifies you have lost capacity to make your own decisions. We don’t recommend that your Enduring Power of Attorney commence when you sign it. There have been cases where a person has signed an Enduring Power of Attorney to commence immediately, and the attorney appointed has acted improperly and stolen assets from the person making the Enduring Power of Attorney. Such conduct is in breach of s135 of the Powers of Attorney Act 2014 (Vic).
• Medical Treatment Decision Maker document to ensure that in the event you are affected by illness or injury that causes you to become unable to make your own decisions, you have authorised a person you trust to make medical decisions for you.
• Consider executing an appointment of a supportive attorney to assist you executing documents while you continue to have capacity.
• Consider executing an Advanced Health Care Directive setting out in detail the decisions you want your Medical Decision Maker to make on your behalf. You should consult your doctor prior to completing this form, as your doctor will need to complete it with you.

Working with Your Accountant

• We consult with your accountant during the estate planning process to ensure that the plan meets your needs.
• Contact us on (03) 5181 6363 to discuss your particular situation, your family’s needs and to make an appointment.