A Will isn't always the only way

You would have heard the saying: “where there’s a will, there’s a way”.

This statement is usually used to encourage people who are faced with a daunting task or goal.

The saying also reflects the way many people feel about estate planning. They think that so long as you have a Will, you have a way to ensure your wealth is passed correctly to your loved ones. But this is not necessarily the case.

The truth about Wills

A Will can help ensure the assets that form part of your estate are distributed according to your wishes.

But did you know that a Will typically only applies to personally held assets and therefore may not deal with a significant portion of your wealth?

For example, the proceeds from your superannuation funds and life insurance policies don’t necessarily form part of your estate. They can pass directly to certain beneficiaries, who may have been nominated by you, or go to your estate where they’ll be dealt with by your Will.

Also, some assets never form part of an estate, like jointly owned assets or assets held in a discretionary family trust.

To cover all bases, thorough estate planning (or personal succession planning as it’s also known) involves putting in place strategies that address all your assets, not just those covered by your Will.

Do I need a personal succession plan?

Another common misconception is that personal succession is only for the wealthy or the elderly. However, just about every asset you own and every investment you make has estate planning implications. As a result, personal succession planning is something everyone needs to consider, regardless of age or stage in life.

At a minimum, every individual should have:

  • a current Will to distribute estate assets
  • an Enduring Power of Attorney to cover situations where they’re unable to make financial decisions themselves
  • appropriate superannuation and insurance beneficiary nominations, and
  • appropriate arrangements in place to distribute or pass control of any assets that are not covered by the Will.

What are the benefits of personal succession planning?

Personal succession planning can:

  • provide certainty by getting the right assets in the hands of the right people, at the right time
  • enable you to provide for and protect your loved ones while minimising tax payable by your beneficiaries, and
  • provide certainty that your children are taken care of.

What are the consequences of NOT having a personal succession plan?

Personal succession is something you should address now. Don’t wait until it’s too late. If you die without a valid Will, intestacy legislation will determine how your estate assets are distributed among your surviving family members.

If you die without a valid superannuation or life insurance death benefit nomination, the proceeds may not be distributed according to your wishes.

And, if you’re badly injured in an accident or lose mental capacity, who will manage your affairs while you’re still alive but unable to make your own decisions?

How we can help

With assistance from legal and tax professionals where appropriate, we can:

  • Ensure you’re making the right ownership decisions when acquiring new assets or re-structuring your existing assets. For example, we can help you determine whether it’s best to invest in your name, your partner’s name, or jointly with your partner. We may also identify whether further tax and legal advice is required to consider another ownership arrangement, such as a trust, is appropriate.
  • Determine if you have sufficient means to achieve your estate planning objectives. Additional life insurance inside or outside of superannuation may be necessary to provide your family with a lump sum payment or an income stream to repay debts, meet their ongoing living expenses and cover your children’s future education costs upon your death.
  • Develop a range of strategies to provide certainty, tax efficiency and/or asset protection. For example, we can explain superannuation death benefit and life insurance beneficiary nomination options. By making appropriate nominations now, your beneficiaries will be able to effectively and efficiently receive the death benefit when you’re no longer around.
We can help you address these and other estate planning considerations as part of your broader financial planning.

To speak with one of our Senior Financial Planners, call 1300 654 193 or email finplan@bankfirst.com.au.


Important information

This communication has been prepared by Bridges Financial Services Pty Ltd trading as MLC Advice ABN 60 003 474 977 AFSL 240837, Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323 (‘Consultum’) and Godfrey Pembroke Group Pty Ltd ABN 38 078 629 973 AFSL 230690 (‘GPG’), members of IOOF Holdings Limited ABN 49 100 103 722 (‘IOOF’) group of companies, registered office Level 3, 30 Hickson Road, Millers Point NSW 2000, for use and distribution by representatives and authorised representatives of Bridges, Consultum, GPG and Australian Financial Services Licensees with whom an IOOF member has a commercial services agreement.

It does not take into account your objectives, financial situation or needs. Please seek personal advice before making a decision about a financial product. Information in this document is current as at 1 September 2021. No liability or responsibility is accepted by IOOF or any of its subsidiaries, or by any agents, officers or employees of IOOF and its subsidiaries, for any loss arising from reliance on this communication. Any opinions expressed constitute our views as at 1 September 2021. Case studies are for illustration purposes only. Any tax information provided is a guide only. It is not a substitute for specialised tax advice.