Estate Planning – its time to have THAT conversation -Steve Marsten
I was talking to a colleague this week who related an unfortunate story of his father. My acquaintance had always presumed that Dad (his mum had previously passed) would be leaving his worldly possessions to him and his brother and sister though no one had ever really had a good talk to Dad about death. After all Dad would often say “don’t worry about that – the accountant and Lawyer will sort it out!”
As it turned out on his Dad’s passing, my friend was advised by the accountant and Lawyer that Dad never wanted to discuss a will or any estate planning matters and hence died Intestate. His estate was worth about $2.2 million.
Dying intestate simply means you have passed without a valid will. That’s when things headed into chaos. You see - his brother was in his second marriage with 3 sons from his first and one daughter from the second marriage and two months before Dad’s passing the daughter and her husband separated. They all have claims to the estate.
The Supreme Court gets involved to provide letters of administration and often the Public Trustee is appointed to the position of administrator unless the children can all agree on the right person or persons. I understand this was never going to be easy for this family.
Now apart from a couple of houses and some share investments – this estate should have been fairly easy to sort out for a nervous administrator. Apparently he sought plenty of legal and financial advice due to the various parties submitting their claims. The administration costs (excluding taxes) blew out to over $128,000.
Over 52% of Australians do not have a will and when it comes down to it, deciding who will inherit your estate is a big decision and an important part of life planning. Smart estate planning helps protect families with young children as well as helping your heirs from overpaying on taxes. In this day and age of many blended families and changing relationships it is more important then ever to atleast have a conversation with your Advisor about the process of Estate planning. Often - it much more then just a will. Like anything, taking the time to caste your eyes over the plan each year keeps it a fluid document and a great guide for all family members.
At UHY Haines Norton we take people through a 4 stage process to minimise and make you aware of any risks that could potentially cause issues, asset leakage and taxes. Call us on 07 49 721300 for more information.