The Importance of Estate Planning and Succession Planning

The Importance of Estate Planning and Succession Planning

What is Estate Planning? 

In its simplest form, Estate Planning and Succession Planning is about peace of mind. Involving much more than just a Will (although it is important to ensure your Will is updated and valid) an Estate Plan will manage many other factors relating to the transfer of your wealth after you pass away, including family trusts, superannuation, powers of attorney, powers of guardianship, health directives and the tax implications for beneficiaries. It is therefore important to make an Estate Plan or a Succession Plan - this will guarantee all assets are dealt with according to your wishes effectively and efficiently which will also ensure your beneficiaries are not lumbered with any unnecessary distress or disputes on your death.

Why Estate Planning and Succession Planning is Important During These Times 

Thinking about getting sick or not being able to make decisions for yourself can be frightening and the importance of safeguarding your assets only seems important when we feel that there is something to safeguard them against. The uncertainty of the current coronavirus pandemic is proving to be one of these times.  

Establishing your Succession or Estate Plan will provide you with a sense of security and certainty knowing that if you were to fall ill, you have ensured that all necessary plans have been put in place to ensure that your property and health issues can be effectively dealt with during any periods when you are unable to make decisions for yourself. 

If you are wanting to finalise your Succession Plan or Estate Plan and ease your fears during COVID-19, there are 3 important steps to consider:

  1. Ensure your Will is valid and up to date – When you set up your Will and Estate Plan, you’ll be able to determine who will receive your assets, and estate, as well as other important factors such as guardianship for children.
  2. Deal with assets in Family Trusts – many people have assets in structures such as family trusts.  A will does not generally effective in gifting assets from these structures.  You should ensure that an effective plan is put in place to deal with trust assets.
  3. Make sure your superannuation is protected – superannuation often accounts for a large proportion of a person's wealth.  It is essential that superannuation entitlements are dealt with properly to ensure that the benefits are directed to those whom you would like.  If there is potential for conflict between your beneficiaries, gifts of superannuation can be very effective in ensuring that relevant beneficiaries receive entitlements thereby reducing the potential for family provision (inheritance) claims.
  4. Make an Enduring Power of Attorney – As part of your Plan, it is very important that you have an effective enduring power of attorney. With an Enduring Power of Attorney, you can appoint up to 2 people to act for you regarding financial matters.  This power continues on even if you lose capacity.
  5. Make an Enduring Power of Guardianship – By having an Enduring Power of Guardianship you authorise a person/s of your choice, to make important personal, lifestyle and treatment decisions on your behalf should you ever become incapable of making such decisions yourself.
  6. Ensure your health considerations are taken into consideration – a health directive enables you to make decisions now about the treatment you would want - or not want - to receive if you ever became sick or injured and were incapable of communicating your wishes.  A directive provides you with peace of mind that your decisions will be known by those who are treating you.

How Leach Legal can help 

If you have any questions regarding your Succession or Estate Plan or are unsure about where to start, Leach Legal can help. Our Commercial and Wills Estate Lawyer, Elizabeth O'Sullivan has been providing Succession and Estate Planning services for over 25 years and is available to help you navigate and understand the steps necessary to develop a strategic plan for you.