Creating equity between beneficiaries when planning your estate

 

The first principle of estate planning is to decide who should receive your assets following your death. For many people this means sharing their estate equally between family members.

To achieve any meaningful estate planning, you must have a valid Will, otherwise State and Territory based intestacy laws will decide the outcome.

Even with a valid Will, you cannot deal with all of your assets. For example, a Will is unable to deal with:

 

• a home owned jointly with someone else, normally your spouseother jointly-owned investments like bank accountssuperannuation (unless the fund pays the death benefit to theestate) 

• assets owned by a family or company trust, and

• benefits of certain life insurance contracts

 

 

You may also want to leave specific assets to specific people for a variety of reasons.

For example, you may think that leaving one child a portfolio of shares balances leaving another your superannuation where they are of a similar value. But because of the way the tax system works, on final distribution the reality may be quite different.

 

There are 2 common ways to deal with this imbalance

 

One is to ensure your Will includes an equalisation clause. The other is to create balance with life insurance.

An equalisation clause requires your executor to treat particular assets, including non-estate assets, as if they all form part of the estate assets and adjust the distribution to your beneficiaries accordingly.

Life insurance lets you nominate a beneficiary to receive a specific amount in the event of your death. This allows a particular beneficiary's share to be topped up to deal with any imbalance.

 

 

If you need help for planning your estate or would like more information, Please Contact Charles Choong on 03 9654 9886, or send an email to firstpacificfs@gmail.com.  For more details, please visit our Company Website www.firstpacificfs.com.

 

 

 

 

Important information and disclaimer

 

*Charles Choong (ARN 244 731) is an Authorised Representative of Professional Investment Services (ABN 11 074 608 558), Australian Financial Services Licence 234 951

General Advice Disclaimer

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Professional Investment Services Pty Ltd (PIS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither PIS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.