The best legacy

What do you plan to leave your family? Are you thinking about family heirlooms or those much-loved ‘valuable’ pieces that you’ve collected along the way? What about your estate plan? The best legacy you can leave is a clear plan that ensures those closest to you are financially secure and avoid distress by having your family’s wealth protected. 

Do you have an estate plan? If not, it’s time to put one in place. If you do have one in place, it may be time to review it. Death is not an ‘if’ but a ‘when’ situation. The problem is that we do not know when that might be, so we need to be prepared. It’s easy to decide we don’t need to think about what happens after we’re no longer around, or decide that there is no need to update a will made years before the children came along, let alone think about the potential conflict in the family. It’s much harder to confront your mortality, take advice and put a plan in place.

We all spend significant time and energy focusing on accumulating and maintaining wealth, but many of us find it difficult, and sometimes impossible, to address estate planning. We plan for the children’s education, to help the family make the right start in life, get on the property ladder and we plan for a comfortable retirement. Estate planning is just an extension of this lifetime planning to ensure the family’s financial health continues.

Estate planning is not just about your wills, but includes a number of elements that need to be considered and factored into your plans. This can include reviewing your insurance and superannuation arrangements, considering guardians and trustees for families with younger children. It’s also a good opportunity to put in place or update powers of attorney to make sure the right people are appointed to make financial decisions for you if you were to ever lose the ability to do so for yourself.

Dealing with your estate plan should be seen as a positive matter. You have the ability to take control and put in place plans, which can have great benefits for your family and loved ones. Testamentary trusts are a good example. These trusts are structures established by the terms of your will that can help protect inheritances particularly when we are dealing with young or vulnerable family members. You can appoint someone other than your children to manage inheritances until the time comes when the children are ready to manage their own financial affairs. These trusts can also give families great tax planning opportunities. Testamentary trusts are not overly complicated and are regularly included in the wills of ordinary Australian families. 

In contrast to their denial of their mortality, many parents will readily admit to having real concerns about the relationships of their children and grandchildren. It’s still the case that about one in three marriages will fail, so parents are right to be worried. There are options available to better protect your wealth in the hands of your children. Reviewing your estate plan gives you the opportunity to explore what can be done to ensure your wealth does not end up in the hands of an errant son or daughter-in-law.

Your family is special but not unique. A family with worries about their children’s relationships is an ordinary family. It’s also entirely normal to be concerned about your legacy becoming a fight amongst your family. Ensuring you have up to date plans will give certainty for the family, which can go a long way to avoid conflict. One of the main reasons families fight over inheritances is expectations, and more specifically unrealised expectations. It’s a good idea to talk to your family about your estate plan. This will mean that everyone knows what to expect and the family is then less likely to fight. It also gives you and your family an opportunity to discuss any issues while you are still around to help resolve matters.

To ensure you leave the best legacy for your family take time to plan now. Looking beyond making sure you have a comfortable retirement gives you the opportunity to ensure your wealth will be secure for your children and grandchildren. Be prepared to face the hard issues to get the best outcome for your family. You will feel more comfortable having put in place a plan for these confronting and difficult issues.

We can work with your solicitor to help you meet your estate planning objectives. To talk about securing your family’s wealth, please call us today.

What you need to know
This article contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.  If you decide to purchase or vary a financial product, your financial planner, our practice, AMP Financial Planning and other companies within the AMP Group will receive fees and other benefits, which will be a percentage of the premium you pay and/or the advice fee you agree with us. Some of the information in this article is based on our interpretation of the law. It is a summary of the subject matter covered and is not intended to be comprehensive tax or financial advice. No reader should act on the basis of this article without obtaining specific professional advice. Further details are available from your planner or AMP Financial Planning Pty Limited, telephone 1300 157 173.