Estate Planning

Estate planning is paramount and often is overlooked by financial advisers and accountants. At Chris Humphrey Private Wealth Management we take great care to ensure our clients' estate planning affairs are in order.

Estate planning is specific planning to ensure:

• Your assets pass in an orderly and efficient manner on and before your death; and
• Someone can act on your behalf if you become incapacitated.
• There are guardians and financial support for your minor children in the event of their parents' death.

Estate planning includes writing wills, setting up trusts, gifting to trusts, establishing Enduring Powers of Attorney, and planning ahead to avoid unnecessary consequences and taxes. Successful estate planning is:

• Tax orientated. This is why estate lawyers, financial advisers and tax accountants should work in conjunction with each other.
• Considers all assets including those that don't form part of an estate (Superannuation, assets held as joint tenants, Life insurance polices )
• Avoids undesired outcomes,including:
  • Your spouse meeting a new partner and losing some of your family wealth in a separation settlement; and
  • Your children losing their inheritance in the family law court i.e. separation settlement; and
  • Your children not being mature enough to use their inheritance wisely; and
  • Your spouse and/or your children losing their inheritance through business dealings.

Estate Planning and Superannuation

It is important to note superannuation monies do not form part of one's estate which is why superannuation estate planning is paramount. Moreover it is not uncommon nowadays for one's superannuation assets to be by far their greatest financial asset particularly on Death if Life Insurance is housed in superannuation. There are two areas of superannuation estate planning which are often overlooked by financial advisers and tax accountants but yet are very powerful. These include:

• Anti-detriment (Refund of contribution tax in the event of your death); and
• Future service period deductions. In practical terms is only available to Self Managed Superannuation Funds (SMSFs).

Good superannuation estate planning

• Minimises tax on superannuation death benefits and future earnings of that capital.
• Endeavours to avoid undesired outcomes(see above)
• Considers commuting Life Time Complying Pensions into market linked pensions if commenced after 18 May 2004 or market linked pensions and account based pensions if commenced before 18 May 2004.

Specific Self Managed Superannuation Fund(SMSF)estate planning

• Can be in the form of a SMSF Will rather than a Binding Death Benefit Nomination.
• Considers inter-generational tax planning.
• Ensures your trust deed allows your LPR on your death to replace you until your death benefit is paid.
• Potentially hard wired into the trust deed for tailored outcomes. Tailoring includes non-transferrable pensions, non-communtable pensions, pension maximums etc
• Integrated with investment strategies.
• Possible Future service period deductions.

Estate Planning and Insurance

Risk insurance cover should be determined considering tax and estate planning.

The main areas of tax include:

• maximising tax deductions of insurance premiums; and
• minimising tax on insurance payouts and future earnings of that capital.