The term Estate Planning refers to the process of protecting the disposal of a person’s assets both in life and after death. Something that many of us are not familiar with having never done it or even given consideration to the asset components that constitute your estate, and what might happen to it when you’re no longer here.
In non-legal terminology, a person’s estate refers to all of their belongings, things such as property, art, cars, land, savings, money and even things like furnishings, clothes and jewellery. By engaging specialist Estate Lawyers Gold Coast residents can seek to safeguard the assets that they have acquired and accumulated during their lives by minimising the amount of tax that is levied on those items following their death. The ultimate benefit is that by legally nominating people, or worthy causes, to inherit specific items, you will ensure that most of what you intend to transfer to your beneficiaries is carried out, whilst at the same time paying the least amount of taxes. After all there is no point leaving something to a relative which they’re going to be heavily taxed by the Government for inheriting.
The process of planning the distribution of an estate has various stages and objectives. Once you have ensured that the least amount of tax will be paid on your estate, and that you are confident that the assets in your estate will be transferred to the right beneficiaries, you can also specify things such as who might look after your children if you are no longer around to care for them, until they are of an age that they are responsible for themselves.
Often, the process of planning an estate requires the person to make a legal will, which is the document that sets out what assets will be allocated to which person following your death. The will essentially documents who gets what.
Sometimes, slightly more complex estates require the creation of a trust. This is an arrangement where your assets are ‘entrusted’ to either a person or an organisation. They are essentially tasked with managing your assets on behalf of the people you would like them to be allocated to. A fair example of why a trust should be created would be to allow the business that a person has built, to be successfully handed down to the next generation of the family, for their own protection. Trusts are also a way of managing land tax more efficiently when numerous properties are owned as part of an estate.
Estate planning often also sees the appointment of someone with the legal power to handle your affairs when you become unable to do so, perhaps through disability, or ill health. Known as Power of Attorney, the nominated person becomes an agent for the person whose estate requires managing, and they can make decisions on their behalf.
So, does everyone need to make an estate plan, or is it just for the rich? Well if you don’t and then you die (which eventually everyone does) then the assets that constitute your estate could become the focus of a legal dispute in court, and subsequently incur unnecessary expenses and attract greater taxes. The general unpleasantness associated with this messy outcome in the wake of someone’s death are reason alone to ensure that your leave a tidy set of affairs to your dependents, and avoid the creation of unnecessary stress and worry in this most difficult of times.