July 10, 2023 | 7 min read
Summary: Here, we explore the essentials of estate planning in Australia, including key components, legal considerations, and the importance of seeking professional guidance.
Estate planning is a fundamentally important aspect of financial and legal management, as it enables individuals to ensure the orderly distribution of their assets after they pass away. It also helps to protect their loved ones from unnecessary anguish and disputes over the division of their estate.
A well-structured estate plan can help individuals and families navigate the complexities of wealth transfer, minimise tax and social security impact, and ensure that the deceased’s wishes are carried out.
Here, we explore the essentials of estate planning in Australia, including key components, legal considerations, and the importance of seeking professional guidance.
Estate planning is the process of arranging for the management and disposal of an individual's assets, usually after their death, but it can also occur during their lifetime under certain circumstances, such as if the person is permanently incapacitated.
The process involves creating a comprehensive plan that outlines how assets will be distributed, who will be responsible for managing the estate, and how potential taxes and expenses will be addressed.
The key objectives of estate planning include asset protection, minimising tax liabilities, providing for loved ones, retaining any social security entitlements and preserving wealth for future generations of the family.
However, although you can start accessing some of your super once you reach your preservation age, you won’t have full access to your super until you’ve also met a condition of release.
A well-structured estate plan typically comprises several key components. These include:
When creating an estate plan in Australia, it is essential to consider the following legal aspects:
Given the complexity and legal considerations involved, it is highly recommended to seek professional guidance when creating an estate plan in Australia.
Estate planning professionals, such as estate lawyers, financial advisers, and accountants, can provide expert advice tailored to individual circumstances. They can assist in:
Estate planning is not a one-time set-and-forget task but rather an ongoing process. It is vital to review and update the estate plan regularly, especially in the event of significant life events such as marriage, divorce, birth of children, or changes in financial circumstances.
Regular reviews ensure that the estate plan remains relevant, aligns with current objectives, and reflects any changes in laws or regulations.
First, gather essential documents. These should include:
Then, make a list of assets, such as:
Next, decide who you want to inherit your assets. Consider immediate family members, relatives, friends, and charitable organisations. Specify the percentage or specific assets you want each beneficiary to receive.
If you have young children, designate a guardian to care for them if you pass away.
Bottom line: estate planning in Australia is a multifaceted process that requires careful consideration of various legal, financial, and personal factors. A comprehensive estate plan is one way to see that your assets are distributed according to your wishes, whilst minimising tax implications and giving yourself peace of mind, knowing that your loved ones will be provided for long after you’re gone.
As one of the largest pension providers in Australia,* we know that growing and keeping your money safe is important. When it comes to support, we go the extra mile—providing general pension advice at no additional cost.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at November 2023 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.