In his weekly business banking post our CFO Greg Taylor looks at why estate planning is important for you and your business.
At the risk of sounding morbid, have you thought about what will happen to your business and your family of you were no longer here?
If you have a Will, that is a good start but what you may need is an Estate Plan.
Family and business structures can be more complex than they once were, making estate planning even more important.
A proper Estate Plan will look at things such as family trusts, payouts of superannuation balances and the tax implications for beneficiaries. It will ensure that the tax payable is minimised on the income and capital gains earned on assets.
You also want to ensure the right amount of ownership and control of your assets passes to the people to whom you want it to pass. Your assets need to be protected if the beneficiary is involved in legal difficulties such as divorce or bankruptcy.
You need to have an Estate Plan that is clear enough to cut through any disagreement between your beneficiaries.
A professional financial planner can be really helpful here. There are three key questions to have thought about before you see one.
1. Who gets what? Think about who will inherit which assets and in what proportions?
2. Have you accumulated sufficient assets to provide for your family and pay off debts if you die? Your financial planner should be able to recommend several ways to make up the shortfall.
3. Who’s in charge? Have you chosen someone to manage your affairs for you if you’re injured or sick and unable to control your investments?
It is not a pleasant thing to think about but estate planning is not as painful as you may think. It should give you and your loved ones peace of mind that your wishes for your business and other assets will be respected.
Have you done estate planning? Please share your thoughts and tips below.
This post is based on Greg’s weekly column in the Newcastle and Lake Macquarie Post.