What is an Estate Plan?
Estate planning involves the organisation of a person's legal and financial affairs so that your assets are distributed to your intended beneficiaries in an orderly and tax effective manner.
A properly constructed estate plan involves the integration of all your legal and financial matters.
What are the Components of an Estate Plan?
A properly constructed estate plan involves the following:
• Will: Your will is the central part of any estate plan. It sets out how you want your assets to be
distributed and can be a relatively straightforward document or a more comprehensive document.
• Power of Attorney: Your power of attorney operates in circumstances before death where you
may be suffering from either a temporaryor permanent legal disability and are unable to make decisions
for yourself.
• Testamentary Trust: A testamentary trust can be used in conjunction with a will to provide for ongoing
control of your assets after death. It may be used when there is a concern that the assets are at risk
of dissipation through blending of families, divorce or legal proceedings involving your children.
• Superannuation: This does not form part of your estate but it should be considered as part of your
estate plan. There will be some occasions where a superannuation death benefit should be paid to
your estate and others where it is more beneficial for the superannuation to be paid directly to your
nominees.
• Financial Goals and Insurance: This is included for completeness so that all matters relating to your
financial affairs, including insurance, are taken into account and are not forgotten.
Who is My Executor?
The executor is the person who administers and carries out the terms of your will. The appointment of an executor is done as a term of your will. Your will creates a trust and your executor of the estate is the person who holds the estate in trust. That person becomes the trustee for the deceased estate trust. The executor is responsible for administering the
deceased estate in the best interest of the beneficiaries of the estate.
What does my Executor Do?
The Executor, in effect, steps into the shoes of the deceased person and winds up the deceased person's personal affairs. Some other tasks usually performed by an executor include:
• Locating the Will
• Arranging the funeral
• Applying for probate
• Obtaining a death certificate
• Informing government agencies, utilities, financial service providers etc of the death
• Locating and assessing the value of all estate assets
• Paying debts, and funeral expenses
• Lodging a final tax return
• Transferring assets and paying stamp duty
• Distributing surplus assets to beneficiaries.
What if I die Without a Will?
If you die without a valid Will, you die intestate. A personal representative must apply to the court for a grant of letters of administration, usually called a grant of representation. When there was no executor appointed, the personal representative is usually known as an administrator and will generally administer the estate according to a statutory formula. That formula is set out in the Administration and Probate Act of the State or Territory in which you live.
The Public Trustee of the State or Territory is often appointed to administer estates where the person dies without a valid Will.
(The above information has been sourced from Certus Law).