It’s true – you can’t take it with you. Yet with a carefully planned estate, you can ensure what you have worked hard to create will be left to those closest to you, and not wasted in the form of avoidable tax and legal fees.
At a minimum, estate planning requires 3 different documents: a Will, a Power of Attorney and a Medical Guardian. These documents each serve a different purpose.
Power of Attorney
A Power of Attorney can handle your financial and legal matters while you are alive. They can manage things like your bank accounts, share portfolio or even sell property on your behalf. Your Attorney can have wide ranging powers and it is crucial to give careful thought about who you appoint as your Attorney. There are two types of Power of Attorneys: General and Enduring.
Medical Guardian / Enduring Guardianship
A Medical Guardian or Enduring Guardianship is often neglected as the general assumption is a Power of Attorney is enough, but there is a huge difference. A Medical Guardian or Enduring Guardianship can decide where you live, what health/medical treatment you receive and decide on other personal services you may require. It covers most of your non-financial decisions in life, in the event you are unable to make such decisions yourself.
Will
Your Will sets out how you want the things you personally own to be distributed when you die. It can also set out the terms and conditions (e.g. money to be released upon reaching a certain age) on any gifts you leave.
Yet in a practical sense a properly planned estate extends far beyond having a lawyer draft these three documents. In fact, much of the work in preparing an estate plan takes place BEFORE a Will is considered.
Your Will governs the distribution of your ‘estate’ assets. Estate assets are those you own personally, and it is here that the confusion arises.
Individuals often control assets, but do not personally own them. Assets held in a superannuation fund, company, family trust and assets held as joint tenants are examples of assets you may control but not own. Therefore, many assets may not be governed by a Will (even though you may feel like you own them).
Identifying the difference between estate and non-estate assets is a key step in effective estate planning. Passing control of non-estate assets is sometimes just as important as making a Will. Lawyers are lining up to get their share of the hundreds of thousands of dollars that are being wasted on each disputed estate so we encourage you to plan your estate carefully.
Align Financial offers a financial organising and storage ‘vault’ that will bring the highest level of structure and ease to your financial affairs, both now and when you are gone. By getting things organised and laying the foundation for your estate plan, not only will your day-to-day financial life be truly ‘at your fingertips, 24/7’, it will make planning your estate much simpler.
Getting your things in order can greatly help prevent the likelihood of any disputes or confusion and ensuring what you have worked for is left to the right people at the right time. If you’d like to know more about our ultra-secure online vault, please email us at adviser@alignfinancial.com.au.
What Can Align Financial Do For You? Visit our homepage to learn more about our service. If you would like to speak to us about your financial circumstance, please feel free to give us a call on 02 9913 9995. We are located in Narrabeen on the Northern Beaches of Sydney.
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Disclaimer: This post has been prepared for general information purposes only. It is not specific advice to any particular person. You should consult an authorised Align Financial adviser before making financial decisions. Align Financial | Financial Planner Northern Beaches | Servicing North Narrabeen, Narrabeen, Mona Vale, Elanora Heights, Newport, Avalon, Palm Beach | Enquire with us online
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