KEEP ASSETS FOR YOUR FAMILY SAFE IN A COMPLEX WORLD
Every year the scenarios in your life (or those of your loved ones) change, be it business or personal, for better or for worse. Without adequate protection, your assets can become vulnerable, placing your finances and your family’s future at risk.
Effective estate planning is very much a journey … rather than a destination. Establishing your Family SafeTM Plan effectively in the beginning is crucial, but equally as important is ensuring it remains current, taking into consideration the constant changes to your circumstances and the law. Merthyr Law’s Family SafeTM Program is designed to ensure you don’t get too busy to regularly review your estate planning.
Choosing the most effective Will – What does it do?
Creating a Will is not like fixing a car. You won’t get a chance to fix it once it breaks down and the consequences of a faulty Will can be disastrous for your loved ones, once you have gone.
Your Will sets out:
- Who administers your estate and enforces your Will.
- Who receives your assets after you pass away. You may have particular items you want to go to a particular person for family or personal reasons.
- Who will be the Guardian for your children under 18 years.
- What you want to happen to your body – i.e. whether you wish to be buried or cremated, or have your ashes scattered somewhere important to you.
If you don’t have a Will, you will not have a say in how your assets will be distributed and who distributes them.
What will happen if I don’t make a Will?
If you die without making a Will, your assets will be distributed according to a strict formula set down by the Law. This may mean:
- you will have no say in how your estate is administered or distributed and your wishes may not be considered;
- the costs to administer your estate will be higher, leaving less for your loved ones;
- there is a higher likelihood of disputes between family members and beneficiaries;
- assets, such as the family home or car, may need to be sold, so beneficiaries can claim their share of the assets;
- members of your family with special needs may not be provided adequate support; and
- administration of your assets will be delayed, potentially causing hardship for loved ones.
AN UP-TO-DATE WILL HELPS ENSURE:
- Peace of mind
- Wishes fulfilled
- Certainty of asset distribution
- Asset protection
- Tax benefits
- Less family disputes
- Lower costs
- Less delays in settling estate
Changing your Will
You can change your Will at any time you choose but there are certain circumstances that revoke your Will and others where it is strongly recommended that you review your Will.
- Marriage automatically revokes your current Will unless it specifically states that it is made in contemplation of marriage.
- If you divorce, your divorced spouse is not entitled to any gifts under your Will.
- If you are separated but not yet divorced, you should review your Will as soon as possible.
- Whenever there are significant changes to your circumstances, or those of your intended beneficiaries, you should review your Will.
- Your Will should be reviewed yearly but at least every five years.
I don’t really have enough assets to need a Will!
Ten years ago, your most valuable single asset may have been your family home. Now, the lion’s share of your wealth is likely to be held within your superannuation fund.
It’s easy to forget your superannuation, life insurance polices and other assets when thinking about your ‘estate’. In addition, your self-managed superannuation needs special consideration to prevent non-compliance or adverse taxation consequences upon death.
Without an up-to-date Will that makes accommodation for these assets, they may never end up with the loved ones that you intended to have them.
Everyone should prepare a Will for peace of mind and to ensure their wishes are fulfilled in the event of their death.
There are Wills and there are Wills
Unfortunately, not all Wills will deliver the desired outcome in the event of your death.
Wills incorporating Testamentary Trusts have clear advantages over standard Wills from both a tax planning and asset protection perspective. They also have the flexibility to cover situations that may not even be contemplated today.
Merthyr Law recommends the use of Family SafeTM Trusts, as these have significant
flexibility and have comprehensive details that go many steps further to protect your assets for the benefit of your bloodline for many years to come. A Will with Family SafeTM Trusts will:
- protect your legacy for your family;
- protect your children from bad decisions and the family court;
- protect your assets from your spouse’s or children’s bankruptcy; and
- give your children/grandchildren a tax free education.
Effective Estate Planning
Planning for the effective distribution of your estate involves more than just a Will, especially if you have a self-managed superannuation fund, business interests and significant assets.
Your Estate Plan should include the following components:
- an up-to-date Will, incorporating Family SafeTM Trusts;
- a Family SafeTM Living Will or an Enduring Power of Attorney;
- a plan for your SMSF incorporating binding nominations;
- a comprehensive Business Succession Plan; and
- an annual review keeping abreast of your changing circumstances and changes to the laws.
Join the Merthyr Law Family Safe Program:
Initial Review Creating your Family SafeTM Plan Annual Review Your Family SafeTM Program
Storage and safe custody of Family SafeTM documents Subscription to InforMER Client Alerts
Keep assets for your Family Safe in a complex world is available to view or download from our web site at: www.merthyrlaw.com.au or ask for a copy to be sent to you.
Protect your legacy for your family – A real Life Story
YOUR SPOUSE’S NEW PARTNER COULD HAVE THE POTENTIAL TO CLAIM OVER 50% OF WHAT YOU LEFT YOUR LOVED ONES, EVEN IF THEY DO NOT MARRY!
Shane and Deb were 38 years old with four children under five and big expenses when Deb sadly passed away at the hands of cancer. Fortunately she had a $1,500,000.00 life insurance policy which provided financial stability to her surviving loved ones.
Deb loved Shane very much and knew that the best thing for him and her children was for him to meet another woman who would help to raise the kids. However, she wanted to make sure that if that person left, they wouldn’t take the $1,500,000.00 with them. She also wanted to make sure the benefits wouldn’t end up with Shane’s prospective step children or children from a subsequent relationship. It was this foresight that led Deb to set up a Family SafeTM Trust Will.
The benefits from Deb’s insurance gave Shane options. He could quit his job and be a full time dad for his kids or continue with his job earning a high income and employ a nanny. Each year over $80,000.00 income from the trust could be distributed to the kids tax free.
Shane could enter into new relationships with more confidence knowing that the wealth that he and Deb had accumulated together would benefit their children. Deb knew before she passed away, that she was still providing for her family for many years to come and nobody could take that away from her family.
This is general information only and does not constitute legal advice which may be relied upon. If you are in a position where you need to review or prepare your Will and Estate, we can develop advice tailored to your specific circumstances. Please call Merthyr Law on 07 3252 5044 to discuss, or email firstname.lastname@example.org.