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    HOW A PROPER ESTATE PLAN CAN SAVE MONEY

    Date:

    By Gabrielle McManus

    Most of us try to make the most of our money, not only so as to provide for ourselves, but for our loved ones, now and in the future. 

    However based on current statistics, only half of those reading this article have made a will. Why? The obvious answer is that no one likes to contemplate death. When we are fit and healthy, making a will might seem like a problem for another day. However, unexpected events can and do happen, and not having a will, or having a poorly drafted one, can be one of the worst things you can do for your family. 

    In this article, we’ll explore how a well-crafted estate plan can save money and provide peace of mind for your loved ones.

    1. Getting the basics right

    People often try to save money by making their own will. The problem is, it’s incredibly common for these wills to suffer from defects. Incorrectly witnessing the will, losing the original, using unclear language can all result in the will failing, entirely or in part. Even little things like using paperclips on an original will can cause havoc. Each of these issues not only results in costly legal fees but can also lead to the estate being distributed as if no will had been created at all.

    1. Avoiding impossible gifts

    These days, most of us will have superannuation and many of us will have some interest in a company or a family trust or all of the above. People often assume they own their super outright, together with the assets of the family company/trust that they control, such as a company car or a property. This is incorrect. 

    When people try to give away superannuation or company/trust owned assets via their will, these gifts often fail unless specific legal measures have been taken to enable such transfers. 

    When working with an experienced wills lawyer, you will be asked about the ownership of your assets and may be required to provide supporting documents to ensure that your intended gifts can be appropriately made through your will. If certain assets cannot be distributed as planned, your lawyer should be able to offer alternative options to help you achieve your desired distribution.

    1. Taxation

    Not only is superannuation frequently misunderstood as automatically becoming part of your estate upon death, but many people also overlook its special tax-free status when received by eligible beneficiaries such as your spouse or children under 18. Another commonly overlooked issue is capital gains tax. By discussing these matters with an experienced wills lawyer, you can ensure that your estate plan is structured in the most tax-efficient manner, maximising the benefits for your loved ones.

    1. Will challenges

    Will challenges are well known for being contentious and costly. There’s a range of eligible persons who can challenge your will, and part of creating a sound will is understanding who these individuals are and designing your estate plan in a way that minimises the risk of a claim. While it is impossible to completely exclude the prospect of a claim, intentionally using products like superannuation or investment bonds to keep funds out of your estate, along with other strategies, can significantly reduce the risk and safeguard certain assets for your intended beneficiaries. 

    1. Asset protection 

    If you have vulnerable beneficiaries, ensuring the safety of their inheritance will be your top priority. Vulnerable beneficiaries include children under 18, individuals with special needs, mental health issues, gambling problems, suffering family violence, or at risk of bankruptcy or family law claims. Discussing the use of a testamentary trust with your lawyer can be an effective way to protect the funds and ensure they are used in the best interests of the beneficiaries. 

     

    McManus & Co
    Suite 103, 1 Thomas Holmes St
    Maribyrnong VIC 3032
    T: (03) 9318 4188
    mcmanuslawyers.com.au

    McManus & Co Lawyers
    McManus & Co Lawyershttp://mcmanuslawyers.com.au
    McManus & Co Lawyers Suite 103, 1 Thomas Holmes St Maribyrnong VIC 3032 T: (03) 9318 4188

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