Effective estate planning usually goes beyond preparing a valid will. It involves consideration of your present personal and financial circumstances, your family dynamics, and your future needs. There are a range of anticipated and unforeseen events that you might need to contemplate, for example:
- Preparing for the inevitable – having a valid will to appoint an executor and to determine who receives your assets when you die.
- Planning for the unforeseen – ensuring a power of attorney is in place so your legal and financial affairs can be dealt with by somebody you trust for your convenience, as you age, or if you are incapacitated.
- Preparing an advance care directive to make clear your wishes concerning your future health care, end of life, and living arrangements if you are incapacitated.
- Ensuring your estate maintains value and distributing assets in the most tax-effective manner, using a tailored approach specific to your circumstances.
- Protecting vulnerable beneficiaries – creating trusts to help safeguard at-risk beneficiaries from third party creditors, estranged partners, or unwise spending due to incapacity, disability, or dependency.
- Minimising the potential for estate disputes or a family provision claim being made against your estate after you die.
- Business succession planning – to ensure that appropriate arrangements are in place to deal with business interests through future generations.
Asset Protection and Testamentary Trusts
Asset protection involves structuring your affairs to eliminate or reduce financial loss and to safeguard property. When planning your estate, there are steps you can take to ensure your assets are protected for future generations and that your estate is left only to those you intend to benefit.
A testamentary trust is a discretionary trust contained in a will that comes into effect when a testator dies. A trustee can be appointed to manage the trust and distribute assets to your nominated beneficiaries in accordance with the rules outlined in the trust deed.
Holding assets in trust can help protect vulnerable beneficiaries and safeguard assets from claims by third party creditors. The flexibility and control that a trust allows in distributing assets can also be advantageous when it comes to taxation.
Trusts are complex, however, and advice and guidance is important to ensure the trust is compliant and structured to achieve the required objectives.
Business Succession Planning
If you own a business, it is important to have a succession plan. Having a strategy to determine what happens if a certain event occurs such as divorce, unexpected death or illness, disability, retirement, or bankruptcy is essential.
A succession plan is a statement of what will happen to your business when you are no longer involved, whether your intentions are to wind the business up, sell it, or pass it onto future generations. The plan should include the financial, legal, and operational steps required in any of the likely scenarios that end your involvement in the business. It may also include asset protection for your business, such as “key man” insurance to enable your business to survive the loss of yourself or other significant people.
Each family is unique, and a successful estate plan will unlikely be a one-size-fits-all exercise. We work with families and businesses of various dynamics and wealth, to ensure that the very best plans can be put in place to protect their hard-earned assets and loved ones in the face of life’s uncertainties and the inevitable.
To find out more, or to arrange a consultation with an experienced estate planning lawyer, contact [email protected] or call 02 7256 7050.