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Active Retirees : Active Retirees Aug-Sept 2012
32 | www.probussouthpacific.org Cover story 1 No Will 40 per cent of Australians die with out a will. ”This means that assets are distributed according to state-based legislation, taking no account of taxation, nor the protection of one’s wishes,” says Diane Terzian from JI Moore & Partners. “The incidence of legal challenge is also significantly greater, as stakeholders are not guided by wishes.” 2 ForgettiNg A ‘loved’ oNe Omitting a family member who feels they should be included in the will can be costly. “The fact they can contest it means it becomes an expensive legal battle which could have been avoided if they were willed something,” Terzian explains. 3 KeePiNg it too simPle Buying a pro-forma will from a newsagency instead of seeking proper advice for complex financial arrangements can cause problems, says Macquarie Bank’s Private Wealth Adviser Noel Yeates. Too much of the estate can be chewed up in taxes if inheritances are not passed the right ways, and your wishes may not be realised. 4 WHyWill? Some people consider wills personal or emotional matters, rather than financial. “There are lots of myths surrounding estate planning, says Yeates. “Many people simply don’t want to confront their mortality and so don’t leave a will. Others seek to rule from the grave, while still others think that if they die and leave a will everyone will be happy. But there is usually some conflict – you can’t always make everyone happy.” 5 leAviNg yourselF sHort Underestimating the amount you will need in retirement can leave you without the comforts you worked for. “You now need to make provision for yourself into your 90s, so it’s important not to gift too much away to your children that you can’t afford to live comfortably into your old age,” says chartered accountant John Randle. 5ESTATE PlAnninG FAilS circumstances no stamp duty would be payable. It is essential to seek proper advice in complicated situations such as the one above. “Effective estate planning will help you to plan and prepare better outcomes for you and your heirs through an enhanced understanding of the impact of tax laws on all assets controlled by an individual at death,” says Terzian. An estate plan should include a review of the laws that relate to the taxation of trusts as they apply to deceased estates and testamentary trusts, as well as addressing reforms of those laws. “The laws that relate to business succession and superannuation income streams need specialist review,” Terzian explains. “The tax office has recently stopped providing guidance to executors about potential tax liabilities related to deceased estates, which means close attention needs to be paid to tax during the estate planning process.” There are still circumstances where the cost may not be justified. “If you’re just updating your will and there is no complexity involved you shouldn’t need to deal with a specialist,” says Randle. As with most financial questions, there is no one-size- fits-all answer – everyone’s circumstances vary and so should their approaches to estate planning. •• The tax office has recently stopped providing guidance to executors.
Active Retirees June-July 2012
Active Retirees Oct-Nov 2012