It is not a “sexy” part of the financial planning process but it is essential. The advent of split families make it an even more problematic area and as the population “ages”, or more to the point stop ageing, this problem will become even more evident.
Michael Hutton, head of wealth management of HLB Mann Judd Sydney, said that currently one in two Australians die without a valid will, regardless of the assets they hold in a recent article in IFA.
“A significant part of people’s overall wealth management process is to ensure that upon death, wealth is passed on to who they want it to go to, in an appropriate, tax-effective and well-understood manner,” he said.
“People might also aim to protect their wealth from spendthrift beneficiaries, potential creditors of the beneficiaries and so forth. A good estate plan will ensure that this is achieved.”
“Often, little thought is put into incorporating factors such as testamentary trusts in a will, even where the estate being left is very large,” he said.
“Testamentary trusts are a way of passing wealth to beneficiaries in a tax-efficient, asset-protected manner.
A lot of people do not realise that their superannuation is not automatically caught by their will. In fact, in a lot of cases, the Trustee of the deceased superfund will have discretion on where the proceeds are to be paid out.