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Investor Insights > News > The essentials of estate planning
August 2023
Key takeaways
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.
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.
This article is issued by, OnePath Funds Management Limited (ABN 21 003 002 800, AFSL 238342), and OnePath Custodians Pty Limited (OPC) (ABN 12 008 508 496, AFSL 238346, RSE L0000673) as the trustee of the Retirement Portfolio Service (ABN 61 808 189 263) and the product issuer. OnePath Funds Management and OnePath Custodians are part of the Insignia Financial group of companies, consisting of Insignia Financial Limited ABN 49 100 103 722 and its related bodies corporate (Insignia Financial Group).
You should read the relevant Financial Services Guide (FSG), Product Disclosure Statement (PDS), Target Market Determination (TMD), Additional Information Guide (AIG), Investment Funds Guide (IFG), and product and other updates (for open and closed products) available at onepath.com.au and consider whether OnePath products are right for you before making a decision to acquire, or to continue to hold any OnePath product. Alternatively, you can request a copy of this information by calling Customer Services on 133 665.
Taxation law is complex, and this information has been prepared as a guide only and does not represent taxation advice. Please see your tax adviser for independent taxation advice.
Before re-directing your super or moving your money into your product, you will need to consider whether there are any adverse consequences for you, including loss of benefits (e.g. insurance cover), investment options and performance, functionality, increase in investment risks and where your future employer contributions will be paid. Any investment is subject to investment risk, including possible repayment delays and loss of income and principal invested. Returns can go up and down. Past performance is not indicative of future performance.
The information provided is of a general nature and does not take into account your personal needs, financial circumstances or objectives. Before acting on this information, you should consider the appropriateness of the information, having regard to your needs, financial circumstances or objectives. The case studies used in the articles on this website are hypothetical and are not meant to illustrate the circumstances of any particular individual. Opinions expressed in this document are those of the authors only.