Planning for family’s future

MANY people think estate planning is only for the rich, but really every family can benefit from having an estate plan.

The truth is that most of us have some assets we would like to pass on to our children and other beneficiaries. An estate plan can help to make the most of these assets.

An estate plan is more than just a will. It's a complete family succession plan covering a range of issues such as asset protection, aged care, powers of attorney and how you will pass assets onto beneficiaries in the most effective manner.

Modern families are increasingly complex. Involving your beneficiaries in your financial plan through a beneficiary meeting, is the first step to developing a comprehensive estate plan.

A beneficiary meeting is a joint meeting between you, your beneficiaries (such as adult children) and your financial adviser. This can help the next generation understand your wishes, identify any potential risks or issues, and make plans to avoid disputes after you've gone.

Your financial adviser can act as a facilitator; explaining the key elements of your estate plan to your beneficiaries, answer any questions, and broaching sensitive topics in a professional and constructive manner.

The first step is to establish your family's risk profile - identifying any potential risks that may impact on your family's financial wellbeing in the future.

This includes reviewing your beneficiaries' relationships, business interests and levels of insurance.

If there are any potential concerns such as high debt levels, drug or gambling issues or former relationships, your adviser can help you put in place appropriate strategies that can protect your family and your wishes after you've gone.

Your financial adviser can provide a broad overview of your financial position, outline any financial arrangements you have in place and communicate your wishes to your beneficiaries in a professional manner.

This will help all your beneficiaries understand your choices and give them a chance to ask questions or raise any concerns. For example, one sibling may be responsible for looking after a parent in their later years, and there may be compensation in the will to reflect this.

Finally, a beneficiary meeting is a chance for you and your beneficiaries to plan for the future, covering important issues such as aged care, powers of attorney, health care directives and business succession planning.

Remember, the earlier you plan for these issues, the more flexibility and choice you will have to structure your finances appropriately.

Once you have the meeting, your adviser can then work closely with you and your other advisers, such as your solicitor and accountant, to develop a comprehensive plan to plan for your assets to pass on to your intended beneficiaries in a tax-effective manner.

Rick Rutten is an Authorised Repesentative of RI Advice Group Pty Limited. This editorial is general advice only.

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