Estate Planning in 2020: Things to Consider

Estate planning in 2020

Estate Planning in 2020

 

With the outbreak of COVID-19 people are feeling an increasing sense of uncertainty about the future.  Along with plunging share and property values, this has seen more individuals across Australia looking at estate planning in 2020 than ever before.

In fact, according to Money Mag, 300% more Australians wrote wills in March 2020 than in the months previous.

Whether you are a young family wanting to detail your wishes or an older Australian looking to protect your property and assets after death, there is no better time to plan your estate than 2020.

 

What is Estate Planning?

 

Estate planning is the process of making a plan that sets out what happens to your assets after death.

While some people think that making a will is the same thing as estate planning, preparing a will is just one of the elements involved in developing a thorough estate plan.

An Estate Plan in 2020 should cover a variety of things including:

  • Making a will that records how you would like your property and assets distributed after death
  • Nominating who receives your superannuation benefits after you die
  • Nominating power of attorney to a trusted individual should you no longer be able to conduct your affairs
  • Making an Advance Care Directive that details your wishes regarding healthcare and treatment should you become sick

Preparing an Estate Plan

 

Before you begin preparing your estate plan, there are several things to consider.

Depending on your age, health and your assets, your estate plan might be quite simple, or it may be a fairly in-depth process.

To begin planning your estate, you can follow these steps:

Firstly, make a comprehensive list of your assets, including personal effects, property, superannuation, life insurance policies and any relevant trusts.

Secondly, identify any potential risks that may arise before or after your death that may affect your estate. This includes divorce, becoming physically or mentally unwell or dying prematurely.

Finally, begin creating your plan. Now is the time to start discussions with a qualified wills and estates lawyer, your accountant and your financial planner to create an estate plan that sets out how your affairs will be handled after your death.

 

Tax Implications

 

It is essential when planning your estate to understand how the way you choose to distribute your assets can be affected tax, including Capital Gains Tax.

Failing to take this into account could mean your beneficiaries end up with a large tax bill.

Fortunately, there are several ways you can manage the impact of tax on your estate.

For example:

  • Proceeds from insurance policies made with a super fund are tax-free if you nominate a dependant as the beneficiary
  • Capital gains tax liabilities can be deferred if you give your beneficiary an asset, rather than the proceeds from the sale of that asset
  • Incorporating a testamentary trust in your will can help manage tax for the listed beneficiaries

Making an estate plan can often seem like a daunting task. Consider starting with our simple DIY will kit or contact one of our experienced lawyers for confidential advice today.

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