An important component of succession planning is the maintenance of a sound retirement and estate plan.
A good estate plan, like any plan, must be reviewed on a regular basis and kept current as circumstances change.
It may well be that your estate plan is still appropriate for your circumstances; however, it is in your best interests to review your estate planning documents to make sure that they still look after you and your family in the years to come. Documents, in addition to your Will, that need to be considered would include powers of attorney, superannuation death benefit nominations and advanced health directives.
In order to focus and prompt your thoughts onyour estate plan, you might want to consider the following issues:
Changes in circumstances in your life: Has there been any change in your family structure since you last designed your estate plan? Has there been either an acceleration or diminution in your wealth which will make changes to your Will necessary? Or has life simply moved along a little, shifting your circumstances from when last you wrote your Will? Are the people you named as executors in your Will, still the people you want to administer your estate if you died?
Asset protection: Is your business wealth legally separated from your personal wealth? Do you have appropriate separation of holding entities and trading entities in your business structure to protect your assets against unforeseen circumstances?
Superannuation: While you control your superannuation, technically it is owned by the super fund until such time that it is paid through your nomination at retirement or death. Do you have appropriate nominations in place? Have you considered whether they might need to be binding or non-binding upon the trustee of your super fund (for Self-managed super Funds only)? Have any of these nominations lapsed because they were only valid for 3 years?
Family Trusts: The Appointer of your family trust is the person who hires and fires the trustee, and is the ultimate controller of the trust. Who will this be after you die, and have you documented them as your successor?
The following is a practical estate planning review checklist. If you answer yes to one or more of the questions on this list your estate plan may need reviewing
- Is it more than 3 years since you signed your Will?
- Have there been any major changes in the family structure since you last undertook an estate plan? For example, have there been any relationship breakdowns, new relationships or new children?
- Are the executors nominated in the Will, still who you want to administer the estate?
- Is there any person in the Will who you made specific provision for who no longer needs such special attention? Alternatively, is there anyone in your family who you now feel needs extra attention in your Will?
- Have you decided who will control your family trust and self-managed superannuation fund if you die? How will your successor be appointed? There are strict procedures for the appointment of successor controllers of trusts and super funds.
- Have you nominated who you want to receive your superannuation if you die? Has that nomination lapsed? Many nominations lapse after 3 years.
- If you have a Self-managed superannuation Fund, has the deed been updated with all the legislative changes?
- Are there any asset protection considerations for any of your beneficiaries under your Will? For example, if a son or daughter is at risk of divorce or separation, or becoming bankrupt, you may not wish them to receive personally, a large part of your estate. Instead, it might be appropriate that a trust be established for that child.
- Has your life become more complicated so that your previous Will no longer adequately expresses your wishes?
James Benson is an executive director of Next Rural.
Next Rural specialises in business transition and succession planning.
Next Rural have put together a simple yet comprehensive guide to business transition and succession planning. To obtain a copy of the guide for free and with no obligation, email Next Rural on info@ nextrural.com.au or call 1800 708 495