Everything You’ve Ever Wanted to Know About Estate Planning
One of the tasks that we see commonly put on hold each year when we speak with clients is their wills and estate planning. While we understand thinking about your own death can be confronting, the grief of losing a family member can be compounded by the confusion of trying to work through the legal implications of an estate with no will. Salt’s team of advisers work with specialist estate solicitors to ensure your wishes are captured correctly, as well as understanding the tax consequences of the directions of your will and ultimately making the whole process easier to understand and free from legal jargon.
Why are wills important?
Wills are important because they allow individuals to specify how they would like their assets and property to be distributed after their death. A will can also be used to name guardians for minor children and to appoint someone to manage the distribution of assets. Without a will, the distribution of assets will be determined by state law, which may not align with the individual's wishes. Additionally, having a will can help to avoid family conflicts and legal disputes over the distribution of assets.
Tax effective outcomes of having a will
Having a will can help to ensure that your assets are distributed in a tax-efficient manner. Some ways that a will can help with tax efficiency include:
Naming beneficiaries: By naming specific beneficiaries in your will, you can ensure that your assets go directly to the individuals or organizations that you want to benefit, rather than having them pass through probate and potentially be subject to taxes.
Designating a Trust: You can use your will to establish a trust and name a trustee to manage the assets for the benefit of your beneficiaries. Trusts can provide tax benefits by allowing assets to grow and be distributed to beneficiaries in a way that minimizes taxes.
Gifting: You can use your will to make gifts of certain assets to specific individuals or organizations during your lifetime, which can help to reduce the overall value of your estate and minimize estate taxes.
Charitable Bequests: You can also use your will to make charitable bequests, which can provide tax benefits. A charitable bequest can reduce the value of your estate for estate tax purposes, and may also provide a charitable income tax deduction for your estate.
It is important to be aware that estate and tax laws are subject to change and vary by jurisdiction, and it is essential to consult with a tax specialist or financial adviser when making your will to ensure that your assets are distributed in a tax-efficient manner.
What happens if I die without a will?
If you die without a will, it is considered to have died "intestate" and your assets will be distributed according to the laws of the state in which you were a resident at the time of your death. Each state has its own laws for the distribution of assets in the case of intestacy, but generally, assets will be distributed to your nearest living relatives, with priority given to spouses and children. If you are not married and have no children, assets may be distributed to your parents, siblings, or other more distant relatives. This may not align with your wishes and can lead to family conflicts or legal disputes. Additionally, if you have minor children, the court will appoint a guardian for them, which may not be the person you would have chosen.
What is the administrative process if I die intestate in Victoria Australia
If you die intestate in Victoria, Australia, the process for administering your estate will involve the following steps:
Locate the Next of Kin: The first step is to locate your next of kin, who will be responsible for making an application to the Supreme Court of Victoria for a grant of letters of administration.
Application for a Grant of Letters of Administration: The next of kin will need to make an application to the Supreme Court of Victoria for a grant of letters of administration. This will involve providing certain information about the deceased person and their assets, as well as proof of the next of kin's relationship to the deceased.
Appointment of an Administrator: Once the grant of letters of administration has been granted, an administrator will be appointed to manage the deceased person's assets and distribute them according to the laws of intestacy.
Gathering and Valuing Assets: The administrator will be responsible for gathering and valuing the deceased person's assets, including any bank accounts, property, investments, and personal possessions.
Paying Debts and Expenses: The administrator will also be responsible for paying any debts or expenses that the deceased person had at the time of their death.
Distribution of Assets: After debts and expenses have been paid, the administrator will distribute the remaining assets to the next of kin according to the laws of intestacy.
It's worth noting that the laws of intestacy vary by jurisdiction and it is important to consult with a lawyer if you have any questions or concerns about the administration of an intestate estate.
If you want to read more about how you can set your family up for success when you’re no longer around, see our useful Estate Planning tools and downloads. If you’d prefer to have a chat with us do not hesitate to call the office on 03 9088 4777 to set up a meeting with one of our Advisers.