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Estate Planning


How to Plan Your Estate and Keep Assets in the Family

The ultimate purpose of estate planning is to ensure that your wishes are successfully carried out after you pass away. Depending on your individual circumstances, the estate planning process can range from simplistic to extremely complicated.

Financial Planning Expert can assist you to implement an estate plan. We can consider your wishes, advise you of any implications and determine which legal documents you require.

For help with your estate planning requirements complete our contact form or phone (03) 5974 4350today.

The estate planning process consists of three stages:

1) Establishing your wishes in the event of death

2) Identifying and addressing the implications associated with your wishes

3) Implementing appropriate measures to make sure your wishes will be met

Once you have gone through this process, the necessary legal documents are prepared and executed. At this stage your estate planning arrangements are finalised.

The complexity of your needs and overall situation will determine which legal documentation you require, but the following three documents are usually needed in even the most basic of circumstances.


When you pass away, most assets pass into your estate. From there, your executor will generally distribute the assets to beneficiaries in accordance with the instructions in your Will (an executor is the person you nominate to administer your instructions).

Some assets, such as those held jointly (e.g. often the family home), those held in trusts, superannuation proceeds and life insurance policies, are generally non-estate assets. This means they do not pass into your estate and are not transferred to beneficiaries via instructions in your Will.

Assets held jointly will automatically pass to the other owner(s) in the event of death, however, other arrangements generally need to be made for trust and superannuation assets.

In addition to assets, your Will is also where you state your guardianship preferences. Guardianship preferences will apply if you have any dependents (e.g. children) at the time of death.

Powers of Attorney

A Power of Attorney (PoA) is a legal document in which you nominate another person to act on your behalf. PoA’s can be general or enduring.

General PoA’s are usually limited in the power they provide and are often used where you need the attorney to perform a specific function for a limited period (e.g. allowing the attorney to be a signatory on your bank account to pay bills while you are overseas). A general PoA ceases to operate if you lose mental capacity.

Conversely, an enduring PoA does not cease if you lose mental capacity. It is therefore more permanent in nature when compared to a general PoA. Enduring PoA’s are absolutely crucial if you are elderly, simply because the chances of losing mental capacity are greater.

Despite this however, the importance of an enduring PoA for all age groups should not be underestimated – accident or illness can strike at anytime. The purpose of an enduring PoA is to provide you with absolute peace of mind. It is essentially a guarantee that the person (or persons) making financial and medical decisions on your behalf is someone you can trust.

Superannuation death benefit nomination

This applies to anyone with a superannuation fund and in most cases, is strongly recommended. A superannuation death benefit nomination (SDBN) allows you to nominate beneficiaries to receive your superannuation proceeds in the event of your death. This document will ensure that your super proceeds are paid directly to your beneficiaries (i.e. the proceeds will not be paid into your estate).

To illustrate the importance of a SDBN, if your superannuation proceeds were paid to your estate instead, your super could become subject to additional taxes, your super could take longer to be paid out to beneficiaries (because estate administration generally takes three months or more) and if your estate was challenged (e.g. by an ex-spouse), not only could this delay payment to beneficiaries even further, but your superannuation would be exposed to the challenge and as a result, your funds may be paid to someone else. This situation is avoided by completing a SDBN because superannuation proceeds paid to your beneficiaries via a SDBN cannot be challenged.

If your circumstances are more complicated, you may require more comprehensive legal documentation to ensure your wishes are met. In most cases, added complexity is brought about by one or more of the following:

Your family situation

Due to the increasing rate of divorce and re-marriage, step families and blended families are becoming increasingly common. A step-family is created when two people marry and one (or both) have been married previously and have children from the previous relationship. A step-family becomes a blended family if the new couple decide to have children together.

Step and blended families create additional estate planning implications and often these are compounded by tense relationships between family members.

With this in mind, it is highly likely that you will need to go further than basic Wills, Power of Attorney’s and Superannuation Death Benefit Nominations for you to achieve your estate planning objectives. Therefore, if you are part of a step or blended family you should ensure you seek expert advice to ensure appropriate arrangements are in place.

Your asset ownership structures

Assets held by a company, trust or self managed superannuation fund (SMSF) cannot be transferred to beneficiaries via your Will. Your company shares can form part of your estate and be transferred to beneficiaries via your Will, but the assets owned by the company cannot.

Similarly, your Will does not affect any assets held by a trust. Instead, the trust deed (the rules of the trust) sets out your obligations in the event of death and will determine how your trust assets are treated.

As a SMSF is a type of trust, arrangements are also determined by the applicable trust deed.

If you have any of these structures in place, your estate planning arrangements will become more complex. This is because you will need to make more than one set of arrangements (i.e. your Will plus arrangements for your company and/or trust). You will also need to consider the broader impacts of each arrangement.

For example, the tax treatment of assets transferred to beneficiaries via your Will can be significantly different to those assets contained in a company, trust or SMSF. In most cases, if you have gone to the effort of establishing a company, trust or SMSF, it has been because minimising tax and providing asset protection (e.g. protecting assets from creditors or an estranged spouse) have been important to you.

Furthermore, it then usually becomes a priority to preserve these arrangements for the benefit of your beneficiaries. In this situation, further complexity is created because you then need to consider the needs and best interests of your beneficiaries whilst trying to retain tax-efficiency and asset protection. Such outcomes can be difficult to achieve. If you have a company, trust or SMSF, you should therefore obtain expert estate planning advice.

Your wishes upon death

Your estate planning arrangements may become more complex if you have wishes that are out of the ordinary.

Providing a life interest in an asset makes for a good example. A life interest allows you to nominate a beneficiary to receive the use of a nominated asset over their lifetime. Upon their death, the asset is then distributed equally amongst your other beneficiaries.

For instance, you may wish to nominate that your younger spouse (from your second marriage) have a life interest in your family home. This would provide them with somewhere to live until they passed away after which point, the ownership of the family home would be transferred to your children from your first marriage.

Complications can also arise with high value assets (such as property) where you have a specific preference not to split the asset evenly between your beneficiaries. For example, you may want to gift your home to your youngest child because your older children already own their own homes, but at the same time ensure that your other children receive an equal share of your estate.

However, in a lot of cases, the property value is far greater than the other remaining assets, thus there are insufficient funds to provide equalisation for all beneficiaries. There are ways to address the imbalance in this example but the implications of doing so need to be considered first.

Therefore, if you have unique estate planning wishes, you should seek expert advice.

Financial Planning Expert can assist you to implement an estate plan. We can consider your wishes, advise you of any implications and determine which legal documents you require. For help with your estate planning requirements, complete our contact form or phone (03) 5974 4350 today.

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax advice prior to acting on this information.Opinions constitute our judgement at the time of issue and are subject to change. Financial Planning Expert Pty Ltd does not give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.
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    Financial Planning Expert is an independent financial planning business based in Melbourne. We provide genuinely independent and conflict free financial advice. We’re experts in self-managed superannuation fund (SMSFs) advice and strategy, retirement planning, property and share investment advice, life and income protection insurance, tax planning, asset protection, estate planning and advice for Australian expatriates.