Estate Planning Not A Dead Issue

Many people dismiss estate planning as not important to them when they are living as it is only to do with who will get their money when they die.

Indeed, only by taking into account all assets, including the business, superannuation, and those held privately or in family trusts or companies, can an effective plan be developed to maximize your estate's value.

This is particularly important in retirement planning, and can have a major effect on lifestyle in retirement.

For instance, if the disposal of the business on retirement is not planned it can affect the price you get for your business, as well as the CGT impact.

How the payout from the business is reinvested can also have a significant effect on after tax income and asset growth.

Some business owners may wish to retain ownership of some or all of the business, at the same time passing management control to their children and/or grandchildren.

Before doing so they should ensure that they will always have adequate capital and income for their retirement.

Estate planning therefore encompasses the management of all the assets you may own, regardless of the structure that you keep them in.

Integral part

It should be an integral part of your wealth management approach, and in particular your retirement plans, affecting both income and lifestyle.

Certainly, how their estate should be dealt with when they die is an important concern for many people, particularly where a family business is involved.

It is even more important where the family structure has become complicated because of divorce, remarriage, and extra family members who are not blood relatives.

In these circumstances your intentions must be made very clear. Unless there is a well drafted will it is too easy for the will to be challenged and the estate disposed of in a way that the benefactor did not intend.

Where an ongoing family business is involved, and the principal has clear ideas on share distribution and management responsibility, these need to be clearly laid out, if necessary, in a memorandum of wishes, with the possibility of restructuring considered.

A person cannot direct distribution of assets held within a family trust or a superannuation fund through a will.

Ownership and control needs to be checked in any estate planning review and often it makes sense to dismantle or simplify company or trust structures on retirement.

Even those who do not wish to make bequests to the next generation still need to manage their estate well to ensure their retirement is comfortable.

These days, with a longer life expectancy, a priority in retirement and estate planning should be to firstly ensure that assets within the estate are managed in a way that allows a satisfying and fulfilling retirement lifestyle - a life that may well last 20 or more years.

These are the types of issues that we identify for clients on a regular basis. If any of the circumstances described in this article relate to you and you require assistance please don't hesitate to contact us.

DISCLAIMER
Please note that this information should not be relied upon for decision making or providing advice without seeking expert opinion. Glenister & Co exclude all liability relating to relying on this information.