This Parsons Law Talk video provides a broad overview on the process of Estate Planning and what’s generally involved.
Whilst a Will is an important part of any good Estate Plan, the practice of Estate Planning involves much more.
Estate Planning is a holistic approach to preparing a succession plan. It is the practice of making sure you have suitably tailored arrangements in place to ensure that all your testamentary wishes are captured and a transition plan is implemented for all of your assets (however owned). Estate planning involves planning not only for death but also for the possibility of legal incapacity before death.
Transcript
Hello, I’m Carla Parsons, and in this Parsons Law Talk session, I’m going to give you a general overview of what’s meant by estate planning. So when we talk about estate planning, we often think of a will. And a will is a very important part, but not the only component of estate planning. Estate planning is essentially putting in place arrangements to make sure your testamentary wishes are validly recorded and also making sure that your assets, however they are owned, are dealt with properly. Estate planning also involves planning not only for death, but also for the possibility of legal incapacity before death. I mentioned that a will is a really important part of any good estate plan. And by a will you make a legal document where you can make and record some really important decisions.
So the first thing that you can do by making a will is decide who should be your executor. And the executor is a person or persons who have a really important role to play, so they step in to sort everything out for you. So when you’re thinking of who should be your executor, you should think about someone who has some business or financial sense or experience, someone that you trust to follow your wishes. By making a will, you can also decide if you have young children who would become the guardian for those children and essentially take on that parent role if you were not able to do so yourself. Another really important feature of a will is that you decide who should be the beneficiaries of your assets and what shares or assets they are to receive.
When we talk about assets that pass under your will, generally these are only the assets that are owned in your individual name. And I’ll touch on shortly where the wider estate planning comes into play. If you have assets that are owned in, for example, a trust structure or a self managed superannuation fund. Before we move on to talking about those different type of entities, I thought I would just briefly mention testamentary trusts. So this may be a phrase that you’ve heard before. And a testamentary trust is essentially a way of providing for beneficiaries in your will that may have some tax effective outcomes and depending on how it’s structured, may also offer asset protection for those beneficiaries.
An important feature of a testamentary trust is that it’s set up in your will, and that means it doesn’t come into existence at law unless you were to pass away. So in estate planning, if part of your assets and your structures, you have a discretionary or family or unit trust arrangement, estate planning for those type of entities means having a look at the documents and help guiding you as to who can take over control of those entities should you pass away. So there’s a little bit more involved when we talk about estate planning for entities, but at Parsons Law, this is something we can certainly help you with. So superannuation is another type of asset that can’t be properly dealt with by a will alone.
And some extra arrangements may need to be put in place to make sure your beneficiaries are nominated to receive those superannuation entitlements. This is a really important part of estate planning because your superannuation often may have a life insurance component to it and it can be a very valuable asset. So you certainly want to make sure you put good arrangements in place to deal with those types of assets. So in this broad overview of understanding what estate planning is, it’s important for me to mention an enduring power of attorney. So this is a legal document by where you can appoint somebody else to be able to make legal, financial, personal and health decisions for you if a situation arose in the future, for example, due to age or accident or illness, that you were unable to make those types of decisions for yourself.
So an enduring power of attorney is a really important part of making a good estate plan. In the area of enduring powers of attorney, there’s also a document that’s called an advance health directive. So it’s separate to an enduring power of attorney. But this document allows you to make future health care decisions for yourself, which would apply if in the future, you weren’t able to make those types of health decisions because, again, of age or accident or some form of illness. As part of the estate planning process, we’ll talk to you about an advance health directive, the nature and effect of that document, and whether it’s something you need to implement as part of your estate plan. As I mentioned, this is just intended to be a very broad and general overview to help you get some understanding of what estate planning is.
I invite you to visit our website to find out more or contact Parsons Law. I’d be very happy to meet with you to talk about your personal situation.
Thank you.
