Estate Planning

Estate Planning is defined as the process of anticipating and arranging for the disposal of a person's  estate accumulated during their life. Typically it involves trying to eliminate uncertainties over the administration of probate and maximizing the value of the estate by minimizing  taxes and related  expenses.

The harsh reality is everyone has an estate and it needs to be dealt with before you die.  Your estate is made up of everything you own including your house, car, investment property, bank accounts, shares, investments, life insurance policy as well as furniture and personal possessions. No matter how big  or how small, everyone has an estate and unfortunately 'you can’t take it with you when you die'.

When the inevitable happens you need to make sure you control the distribution of your estate. To ensure your wishes are carried out, you need to provide instructions stating who is to receive your assets, how much and when. Naturally, you want this to happen with a minimum of fuss, legal costs and court costs plus tax. In essence that is what an estate plan is, however, good estate planning is much more than that and includes:

  • Instructions for your care if you become disabled before you die
  • Name a guardian and an inheritance manager for minor children
  • Provide for family members with special needs without disrupting their entitlement to government benefits
  • Provide for loved ones who might be irresponsible with money or who may need future protection from creditors or divorce
  • Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury
  • Provide for the transfer of your business at your retirement, disability or death.
  • Minimize taxes, court costs and unnecessary legal fees.
  • Be an ongoing process and your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime

It is not just for people in their retirement phase although obviously it becomes an issue as we age. Given we can't predict our life span, illness or accidents it should be on the 'to do' list much earlier than at retirement. Estate planning is also not reserved for the wealthy and while people who have accumulated significant wealth often focus on how to preserve it, estate planning is relatively more important to families who have acumulated a modest amount of assets.

Individuals tend to defer their estate planning because they think they don’t own enough assets or they don't think they’re old enough. Some people are too busy or complacent while others simply don't understand the process or need. Unfortunately, all too often, when something happens to them their families are left to clean up the mess. It's stressful but avoidable.

The good news is that, if you don't have an estate plan the government has one for you. The bad news is that you probably won't like it. Here are the likely scenarios with certain events that trigger your plan:

Death - if you die without an intentional estate plan, your assets will be distributed according to the probate laws in your state. In most cases, if you are married and have children, your spouse and children will each receive a share of your estate. This means your spouse would receive only a fraction of your estate, which may not be enough for them to live on. If you have minor children, the court will control their inheritance. If both parents die (i.e. in a car accident), the court will appoint a guardian without knowing who you would have chosen.

Disability - if your name is on the title of your assets and you can’t conduct business due to mental or physical incapacity, only a court appointee can sign for you. The court, not your family, will control how your assets are used to care for you through a conservatorship or guardianship (different terms are used in different states). The process can become lengthy, expensive, time consuming and it is open to the public which can all prove frustrating even if you recover your health.

Clearly, you would prefer that your affairs were kept private and managed by your family, not the courts. You also want to control the allocation of your assets and if you are survived by young children you would want to control who will be responsible in raising them. An estate plan lets you issue instructions. 


Yourwill provides instructions but it does not avoid probate. Any assets with your name on the title or directed by your will must go through your state’s probate process before they can be distributed to your beneficiaries. The process can become expensive with legal fees, executor fees and court costs. It can also take up to two years or even longer. Typically probate files are open to the public so excluded heirs can come forward and seek a share of your estate. In short, the court system, not your family, controls the process.

Not everything you own will go through probate. Jointly owned property and assets that let you name a beneficiary (for example superannuation and life insurance) are not controlled by your will and usually pass to the new owner or beneficiary without probate. But there are many problems with joint ownership, and avoidance of probate is not guaranteed. If a valid beneficiary is not nominated the the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably insist on a guardianship until the child legally becomes an adult.


Would your family know where to find your financial records, titles and insurance policies if something happened to you? It's important to plan your estate now and leave instructions regarding the location of your records.

It could be as simple as a will,  life insurance policy and a power of attorney for your assets and health care. You can then develop and expand your estate plan as your needs and financial situation change. Let's face it, nobody likes to think about their own mortality or the possibility of being unable to make decisions for themselves but this is precisely why so many people get caught off-guard when a loved one suffers incapacity or dies suddenly. Don’t procrastinate, put a plan in place now and change it later if required.

As accountant's we can help you with your Estate Plan and we invite you to contact us today to discuss your needs.

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Succession Planning Overview
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