Good estate planning comes through a clear process for gathering relevant data, asking the right questions and building the best outcome for a family to plan for the future
The team at SuperCentral has developed an estate planning process through its EPAdvantage system that helps people build superior estate plans.
Below is a list of the good and bad design elements to emulate or avoid, respectively, when creating a useful and sustainable legal structure to ensure the best outcomes for families.
Poorly Designed Estate Plan | Well Designed Estate Plan |
---|---|
1. Consists only of a Will | 1A. Includes the consideration of and preparation of a Will, super death benefit nomination, memorandum of wishes, appointment of enduring guardian, enduring power of attorney and a living Will. May even involve changes to current ownership structures to assist estate planning later. |
2. Fails to inform the client of what’s possible | 2A. Informs the client of what they need to consider while collecting the client’s information and data |
3. Squeezes the client’s square peg into the estate planner’s round hole | 3A. Considers the client’s specific needs and deals with those needs |
4. Fails to use a testamentary discretionary trust | 4A. Uses a testamentary discretionary trust and thereby provides ability to: · have government help subsidise children and grandchildren’s education and upbringing · help children in high risk professions quarantine inheritance from creditors · help high risk children (mentally or physically disabled, substance or behavioural addicts, personality issues) look after their inheritance · protect inheritance from estranged spouse or de facto partner |
5. Inflexible transfer of inheritance | 5A. Flexible, allowing primary beneficiaries to guide Executors on the best way for them to receive their inheritance |
6. Mandates sale of property | 6A. Leaves timing of sale of property to Executor and beneficiaries to permit effective tax planning |
7. Fails to co-ordinate the Will with the superannuation death benefit nomination | 7A. Permits access to tax free distribution of super death benefits by otherwise taxpaying death benefit dependants |
8. Fails to protect the current spouse from the children of previous marriage(s) and the children of previous marriage(s) from the current spouse | 8A. Protects the current spouse from the children of previous marriage(s) and protects the children of previous marriage(s) from the current spouse |
9. Fails to ensure that the control of trusts and SMSFs passes to the correct beneficiaries | 9A. Ensures the control of trusts and SMSFs passes to the correct beneficiaries through careful arrangements relating to directorships of corporate trustees, distribution of shares in corporate trustees and replacement of appointors |
10. Fails to provide for payment of estate debts from most appropriate source | 10A. Ensures estate debts are paid from a source that meets the requirements of the testator and the needs of the beneficiaries and prevents superannuation death benefits becoming available to pay debts |
11. Fails to make provision for family members in circumstances where those members could claim against the estate | 11A. Deals realistically with entitlements of family members to avoid or minimise future claims |
Source: EPAdvantage |
Good estate planning can only come through a clear process for gathering relevant data, asking the right questions and building the best outcome for a family to plan for the future.
Peter Townsend
Principal
Townsends Business & Corporate Lawyers
t: (02) 8296 6266
m: 0419 44 88 44
Twitter: @TownsendsLaw
e: peter@townsendslaw.com.au
townsendslaw.com.au