There’s a common misconception in Australia that planning your estate is something only those nearing retirement need to worry about. This isn’t the case, however, as if the worst should happen, you’ll want to have a proper will and estate plan to distribute your assets according to your wishes.
Just as you should start planning for retirement soon after entering the workforce and achieving a stable income, there are a number of life events that should trigger the establishment or review of your will. These range from marriage and childbirth, to the acquisition of new assets.
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Here are a few reasons why it’s never too early to start planning your estate:
1. A will determines the distribution of your wealth
Creating a will allows you to be sure that assets are divided how you wish them to be.
The very function of a will is in itself a perfect explanation of why you should plan for the future. As soon as you’ve acquired steady income or valuable assets, you have things to be passed on to others. While succession laws are in place in Australia to create a default dissemination of your wealth to your loved ones, there may be certain ways you wish to assign your bequeathments.
An addition of a new branch in your family tree is another point at which you should address your estate. Creating a will allows you to be sure that assets are divided how you wish them to be, whether that means certain loved ones receive specific things, or an amount of wealth is left to charity.
Your estate plan puts the power to make important decisions in the hands of your most trusted people.
2. Power of attorney allows you to maintain agency over your affairs
Assigning someone the power of attorney lets you control who gets to make certain decisions around your passing. There are three different types of power of attorney:
- A general power of attorney is appointed for an associate to make financial and legal decisions on your behalf where you are unable to, due to extenuating circumstances such as being out of the country.
- An enduring power of attorney allows the chosen individual to make similar decisions if you lose the capacity to do so.
- A medical power of attorney can make choices regarding medical treatment should you be no longer able to. The inclusion of an anticipatory direction provides legally binding guidance to this person.
Your estate plan can also include documents outlining guardianship over you in the case of disablement, and directions for the handling of your body.
Tragedy can strike in the form of untimely death. Creating an estate plan early on means that no matter what happens, you can rest in peace knowing your wishes are being respected.
3. A trust will help your children receive the best outcome
Finally, you can include a trust within your estate. This means that your wealth may be managed by a chosen trustee until your beneficiaries (generally, your children), come to an age where they will be able to use the assets responsibly.
Essentially, your estate plan is like a fire alarm – you may never expect there to be a fire, but having a contingency plan in place only does good. The team at Invest Blue is ready and willing to help you create a comprehensive estate plan. To make sure your wishes are respected, contact us today.
What you need to know
This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.