Law firms in Townsville can offer you a host of services that will be beneficial to you and your family today and in the future. One of these is estate planning. Many Australians tend to confuse estate planning with wills and death. It can explain why some don’t consider this at all. To end the myths, get to know more about the service with these FAQs:
What is estate planning?
Estate planning is the process of creating strategies on how to distribute your assets after you pass away. There are many possible objectives:
- Ensuring your assets will go towards the right beneficiaries
- Easing the potential tension that can arise due to estate disputes
- Reducing or even erasing the possible taxes your beneficiaries might end up paying
- Protecting your assets from possible claims of creditors
It can also include other related services, however, such as advance health directives. It is a document that outlines all your wishes in case you develop a terminal illness or severe injury that leaves you incapacitated or capable of making medical decisions.
Who should undergo estate planning?
Anyone who has assets should consider undergoing estate planning. These can include the following:
- Bank accounts
- Properties such as land and houses
- Income-generating assets such as rental properties
- Superannuation funds
- Insurance policies including those that are earning fund value
- Investments like stock shares and bonds, as well as dividends
- Other personal possessions
If you are the possible beneficiary of the estate (e.g. you’re a child, spouse, or nearest relative), it’s also advisable to go through with the process. By the time the owner of these assets dies, you will be the one to settle the tax liabilities, if there’s any, among other obligations.
Is a will necessary in Australia?
A will is not mandatory, but any estate planning process will highly encourage it. This is more than just a piece of paper. It guarantees your assets will go to the people or institutions you think deserve them the most. In cases of disputes, your rightful beneficiaries and the court will have a legal basis to settle them.
Otherwise, your assets will be divided according to a pre-determined percentage among your possible heirs. If your remaining heirs go beyond cousins, it’s likely your estate goes towards the government.
Can I do estate planning all by myself?
Yes, you can, but it will be not only challenging but also risky. Estate planning has legal implications such as your will. The documents would have to conform to the requirements set by the court.
You need to have an excellent grasp of estate planning strategies such as how to reduce estate-related taxes without getting into trouble with the law. Unless you have the superior knowledge about the process, it’s best to work with the experts.
Do I pay taxes for my estate?
In Queensland, there’s no inheritance or death duty tax, but it doesn’t mean your beneficiaries won’t have to pay anything to the government. For example, there can be a tax for all incomes generated by the estate. You might also have to pay capital gains tax (CGT) for the proceeds of the sale of the assets even if you inherited the dwelling.
Estate planning is more than winding up your affairs before death. It’s about giving your beneficiaries some peace of mind even after you’re gone.