Why Estate Planning Makes Financial Sense
Do you have a will? Statistically, there is a high chance that you don’t.
A whopping 45% of Australians do not have a valid will. That’s alarming considering that a will is the most important document you ever will sign in your life.
So why are you putting it off? Do you think you are out of reach from the spectre of death? Sure, you might have your health, but one day, and I hope for your sake it’s a long time in future, you’re going to die. Sorry to be the bearer of bad news.
And then what’s going to happen to your assets? It’s possibly going to be taxed, distributed to people against your wishes or even straight to the government. Instead, plan your estate and make a will. If that doesn’t encourage you, then read on, because in this blog we are going to look at why estate planning makes financial sense.
It seems that you can’t escape tax, even when you’re dead. When you die, taxes will be taken out of your estate. That’s pretty rough, right? However, if you get a clever lawyer to draft up your will, you can reduce the amount of inheritance tax that needs to be paid so that your beneficiaries get more.
Dying without a will is called intestacy. If this happens, the court will decide who will inherit your assets. This isn’t usually a bad thing as your close family will usually be regarded as your benefactors. But what if they can’t find any benefactors? Well, in cases like this, it may end up going all the government. That’s crazy, right? You’ve been paying GST and income tax all your life and now you’re handing over your estate? The government doesn’t need any more of your money, so make a will and ensure you leave your assets to someone – anyone, even if it’s to a charity you support or a close friend.
You decide how your assets are distributed
It’s your will, you can distribute your assets however you want! Your last will and testament has to be followed to the letter and can only really be disputed if you don’t provide fairly to your immediate family or a spouse.
That means you get to decide who get what. You don’t have to allocate your estate evenly. You don’t even have to give some people anything if that’s your wish – an ex-partner for example. This is why it is financially important to have an up to date will.
Don’t place a burden on your loved one
Let’s picture a world where you’re dead. It’s going to be a hard time for your loved ones, don’t make it worse by placing a huge financial burden on them. Funerals cost a lot of money. When you write your will, make sure you put money side to take care of your funeral arrangements.
Many of you might think that drafting a will is a morbid act, but it’s not. As you can see, making a will actually makes a lot of financial sense, whatever your age. If you don’t have a valid will, we hope this blog has prompted you get one.