The Importance of Estate Planning and Succession Planning

Many people think the purpose of estate planning is to make sure your assets and belongings will go to the people and organizations you want to have them after you die, with as little delay and costs (fees and taxes) as possible. By establishing your Succession or Estate Plan, it will also provide you with a sense of security and certainty knowing that if you were to fall ill, you have ensured that all necessary plans have been put in place to ensure that your property and health issues can be effectively dealt with during any periods when you are unable to make decisions for yourself.

Effective Estate Planning

Implementation of an effective estate plan requires a structured process tailored to the individual’s particular circumstances:

1. Identify the estate (not limited to personally owned assets but also including non-estate assets).
2. Identify the intended recipients (children or beneficiaries).
3. Choose how you will split up your estate or whether it will be maintained as a pool for the benefit of all intended recipients.
4. Choose the form of Will – Standard, Steps Law Testamentary Trust, Steps Law Protective Trust.
5. Restructure your non-estate assets (if necessary) to allow them to be passed to the intended recipients.
6. Pass the assets to the intended recipient in a manner that is tax effective, protects the inheritance from claims and protects the inheritance from loss on the demise of the intended recipient.

It is important to think of all the areas in your life that would need someone to step in and take your place in your absence. For example:

1. If you own a business, it provides for your family, your employees and your clients. Business succession planning is critical for the business to continue in your absence. You may want the business to be run by one of your children, a business partner or a key employee. But without a written plan, the funding to make it happen and careful grooming of the right successor, the business you spent most of your life building and running will likely disintegrate without you. Life insurance is often used to provide the funding needed or to compensate other children who do not work in the business.

2. If you have young children, you need to name a successor (guardian) to raise them in your absence. If you don’t do this and something happens to both parents, a judge who does not know you or your children will choose someone to raise them without knowing your preference.

3. For some people, their pets are their children. Most pet owners would agree their pets are part of the family. Who will succeed you as their owners if they outlive you? Have you planned for their financial care?

An effective estate plan should be implemented in conjunction with your solicitor, accountant and financial planner. If you would like to find out more about estate and succession planning or to find out more about your rights and options, you can email us at info@straitslawyers.com or call at 08 8410 9069.

Alternatively, if you would like to prepare a Will, Straits Lawyers are now offering an online package for Advance Care Directives and Wills. Simply purchase our package via this link: https://straits-lawyers.square.site/product/will-and-advance-care-directive-package-/13

Please note that this article does not constitute legal advice.