Estate Planning Strategies to Help You Protect Your Family and Assets


Have you mastered estate planning? A lousy estate plan will inevitably defeat the purpose when the beneficiaries are forced to grapple with costly legal and financial headaches in contestations.

According to ASIC, some 50% of Australians will die without a will thereby opening the floodgates for protracted legal disputes over the estate of the deceased. The assets will often fall into the wrong hands and create lots of distress on top of the grief over the loss of a loved one. Costly and lengthy legal tussles over the deceased’s estate will wipe out tens of thousands off the estate in legal fees incurred by the beneficiaries. To avoid such a scenario after your demise, it is imperative that you plan your estate well. Here are some of the top strategies that you can incorporate to ensure your estate planning proceeds as smoothly as possible:-

Take care of wealth management

To have a more coherent estate planning, it is important to start by looking at the overall wealth management of your estate. This will help you create a solid plan for accumulating the assets required to accomplish your estate planning goals.  Estate planning involves taking a good account of your assets and by sitting back and talking about your future goals, it will be easier for you to notice the gaps that will need some plugging. Talk to a professional wealth advisor and create workable plans or goals. You will also need to track all the assets that you have amassed over the years.

Protect your assets and minimize risks

Once you have carefully mapped out your asset portfolio, you have to start working on protecting those assets and minimizing risk as much as possible. Remember that the goal of your estate planning is wealth preservation so if you don’t take measures to protect your income and assets, you might be left with nothing to pass over to your beneficiaries. A financial planner can assist you in structuring out your assets and investments in such a way that risk is reduced to a bare minimum.

Plan your business exit

If you have been running your business forever, it is easy to develop a sense of indispensability. However, it is always prudent to think of a future when you will no longer be around to call the shots and move things. Put in place a succession mechanism for your business. Without proper succession planning for all your commercial interests, your exit will not only leave behind a huge gap but also lots of family rifts and disputes as your successors tussle over your wealth.

Tax Minimisation

The goal of estate planning is also to minimize your tax obligations. There are various legal estate tax planning strategies that you can use in order to minimize the tax burden that would have been borne by your beneficiaries. One of the commonest and safest techniques is by using a trust to protect your assets. You can also consult an estate tax planning adviser who can structure your assets in such a way as to give your estate a tax advantage.

Manage Your SMSF and Superannuation More Efficiently

A self-managed superannuation fund (SMSF) can be an invaluable tool when it comes to building and protecting your wealth. Not only does it enjoy tax advantages, it also gives you more control over your investments as well as better investment risk management. The drawback with SMSFs is that you have to grapple with more responsibilities and higher running costs for the fund. You also have to grapple with stringent compliance rules to avoid running into tough penalties for non-compliance. If you have a significant SMSF cache, you can work with a wealth advisor to help you incorporate this investment vehicle into your wealth creation and estate planning strategy.

Work out your aged care fees

Australians are living longer so the cost of aged care must be one of the main considerations when it comes to estate planning. This is particularly so when it comes to the aged care fees. They have been rising by the year and cover multiple categories such as basic daily care fees, the cost of accommodation, means-tested fees and other fees charged at the facility. Your investments must be structured in such a way that your aged care fees are factored into the equation. You may also opt to put more money into your Age Pension so as to cover this base adequately.

Make sure your will is up to date

Your estate planning goals will change from time to time and so will your assets, liabilities and even family. If you are carrying out estate planning, you will need to reflect on these changes and update your will accordingly. Hire legal experts and go through your will frequently to ensure it is up to date.

Make sure you are adequately insured

Protect your estate and family from the unforeseen by purchasing the right amount of insurance coverage. Insurance is one of the best ways to protect your assets and income from any potential risks or catastrophes. There are, however, too many insurance products in the marketplace so you have to take your time to compare the various insurance packages and determine which of them will be ideal for your needs. You must always aim at optimizing your insurance coverage to ensure your wealth is well protected.

Get ongoing support

Estate planning is not something that you do once and get it done with. It needs constant assessment and changes to reflect your current circumstances and goals. You can hire a professional estate planning expert to help you go through your plans and will so that they align with your wishes.

Common Mistakes to Avoid in Estate Planning

There are various mistakes, assumptions and omissions that many often make when it comes to formulating their estate plan. These include the following:-

Going the DIY route: Some people are often tempted to do it on their own but this often creates more complications when it comes to the execution after the person passes on. If the will is ambiguous, it will certainly be subject to contestations that may end up costing your estate massively in legal fees.

Underestimating your estate: How big is your estate? Some people have vast estates that they aren’t even sure of its components. Talk to an accountant Melbourne expert and lawyer to help you determine the exact size of your estate.

Giving away assets you don’t own: If you aren’t fully aware of the components that make up your estate, you may end up giving away assets you don’t really own or which you co-own with others and this will create complications.

Allocating benefits to the wrong beneficiary: There have been cases of people unwittingly allocating benefits to persons that are not the intended beneficiary.

Failing to factor in asset accruals: When it comes to estate planning, a lot of people focus on the here and now and fail to factor in that they might live longer and build an even higher networth than they currently own. Between the time your write your will and the time that you die, you will have accrued more assets and changed your banks and this might pose a problem when it comes to distributing your assets.

Failing to update the estate plan: If things are changing in your estate, then you can’t just set and forget. You have to update your will or estate plan on a regular basis. The last thing you would wish for is to spend a lifetime building wealth only to leave its administration to the justice system.

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