Estate planning is the process of deciding how to manage your “estate” if you pass away or become unable to make decisions on your own. While that sounds daunting, it’s an essential part of protecting your family.
By nature, the estate planning process is deeply involved, and it can be complex if you need to make decisions about your family, children, assets and businesses.
In this article, we’ll explain the basic steps of the estate planning process, and some of the ways we can help protect your future.
Key Takeaways
Comprehensive Estate Planning: Estate planning involves listing your assets and liabilities, ensuring your family is protected, and managing your health and financial decisions through Powers of Attorney and health directives.
Protecting Assets and Beneficiaries: Setting up Trusts, such as Testamentary Trusts, can provide tax benefits and safeguard assets for beneficiaries, ensuring they are distributed according to your wishes.
Regular Updates Are Essential: Estate plans should be regularly updated to reflect changes in family, assets, or health care needs, reducing stress and potential misunderstandings for your loved ones.
The Process of Estate Planning
1. Make a list of all your assets and liabilities
Your estate plan incorporates the sum of your assets and liabilities, including:
- Property and homes
- Vehicles
- Personal and household possessions
- Physical cash and money in the bank
- Stocks, indices and cryptocurrency
- Life insurance
- Superannuation
- Debts
As part of the process, we determine how to handle each part of your estate. For example, if you own a home, you can decide how to distribute it to your beneficiaries. Similarly, you can also decide how the estate will repay outstanding debts once you pass away.
See our complete article on what you need in your estate plan for more details.
2. Decide how to protect your family
Caring for your family is the most important part of an estate plan. An effective estate plan provides instructions on caring for your spouse, children and dependents if you pass away or are unable to make decisions.
There are several ways of protecting your family members through an estate plan:
- Powers of Attorney allow you to appoint someone you trust to make decisions on your behalf. You can empower your attorney to make decisions about personal and/or financial matters.
- You can appoint a guardian for children and other dependents to ensure they’re looked after if you and your spouse are unable to do so.
- Establishing life insurance can provide money your family needs if you pass away or become unable to work.
3. Decide how to manage your health
There’s a common misconception that your estate plan only takes effect once you pass away. In reality, an estate plan can also provide instructions on how your health care is managed while you are alive.
Provisions such as Advance Health Directives and Powers of Attorney allow you to manage your health if you become unable to make decisions on your own due to age, injury or illness. This prevents your wishes from being misunderstood by the people around you.
For example, people living with degenerative illness can create health directives that provide instructions on future health care.
Managing your health through an estate plan ensures your wishes are respected and reduces the burden off your family at a stressful time. Our Estate Lawyers in Brisbane have the experience and delicate approach to help you plan your estate.
4. Protect your assets
Protecting your assets is a crucial part of the estate planning process. This is commonly achieved using Trusts.
A Trust is a legal agreement where your assets are managed by the Trustee for the benefit of others (the Beneficiaries). Establishing a Trust gives you control over how your assets are managed, provides tax benefits to your beneficiaries, and can protect assets against creditors and family law matters.
For example, your Will can establish a Testamentary Trust. When you pass away, your assets are distributed to the Trustee, which provides tax advantages when the wealth is distributed to your family.
5. Nominate your Executor
The Executor is the person (or group of people) responsible for carrying out your wishes after you pass away.
It’s common to nominate a spouse or close relative, but you can also nominate professionals like your lawyer, accountant or adviser. Make sure you discuss the matter with your Executor before nominating them in your estate plan.
Acting as an Executor can be a demanding task, and some people won’t want to take on the task. For this reason, an Executor may refuse the responsibility when the time comes, so it’s a good idea to nominate multiple Executors.
We recommend nominating people with some level of professional and/or financial understanding. They will be responsible for managing, selling and distributing your assets, and may need to satisfy legal requirements like obtaining a grant of probate.
You can read more information on our how to choose an executor of my Will article.
6. Nominate your Beneficiaries
When you pass away, any wealth that’s held by your estate is distributed to your Beneficiaries. If you already have a Will, you may have already chosen your Beneficiaries.
You are free to distribute your wealth however you see fit. Your Beneficiaries could include:
- Your spouse or partner
- Children and other dependents
- Family members
- Friends
- Charities and community organisations
- Companies
Certain types of assets like superannuation aren’t automatically distributed to your beneficiaries. Our Estate Lawyers in Brisbane can assist you with nominating and updating beneficiaries with your providers.
7. Regularly update your estate plan
Treat your estate plan like a living document. It should be reviewed and updated whenever there are changes to your family, assets and health care needs.
Frequently updating your estate plan will minimise the stress to your family and decrease the risk of misunderstandings when dealing with your estate.
Manage the Estate Planning Process With FP Lawyers
Planning your estate and looking towards the future can be a daunting task. There are lots of decisions to make, and it requires professional input to make sure all your boxes are checked.
The team at FP Lawyers has vast experience in estate planning. As one of our longest-standing fields of expertise, we are uniquely qualified to help you plan for the future.
Our comprehensive estate planning process ensures no stone is left unturned. We can help you decide how to manage your assets, family, health, businesses, dependents and more.
We’ll walk you through your options and explore opportunities to protect your assets and loved ones.
Contact us online to make a booking, or give us a call to find out more about the estate planning process.
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