Jonathan Cattana : Estate Planning
Jonathan Cattana : Estate Planning
Estate planning
This is an important area of wealth preservation for current and future generations. The length at which I could discuss this area is tremendous and obviously outside the scope of this book, but it certainly deserves an overview.
Estate planning and wills are often overlooked by many professional groups, including solicitors. In simple terms a will is a document which legalises your estate plan. Understanding who gets what and when once you have passed on is critical. Really, it should be where you start with your planning and then work backwards, not the other way around.
Receive advice on what needs to go into an estate plan. If a parent was to sadly pass away, how soon can the family be certain that his or her children will receive the best care in their lives?
When building an estate plan with a financial adviser, ensure you cover off the area of a testamentary trust. A well-drafted testamentary trust provides you with peace of mind that will work through possible unanswered questions for my children’s future should you or your wife die prematurely. Make certain that there are enough assets and, as we mentioned above, make sure you have enough life insurance in place to pay for your children’s education right through to university if that was your plan.
Creating an estate plan is not hard, however you will require a competent adviser to organise your estate plan. Then you will require a solicitor to draw up the wills.
As you can see, estate planning is not just about a will or ensuring your estate keeps paying for school fees, it is the welfare of your family. If you have assets and need to ensure that they land in the right hands at the appropriate time, then draw up an estate plan and will. Make sure you get your will done professionally.
Good advice
Advice is something you pay for a good friend once told me. And you get what you pay for.
You can receive advice from a number of financial services providers, such as stockbrokers, financial planners, and possibly accountants. However, any business or person that offers or advises you about financial products is required by law to have an Australian Financial Services Licence (AFSL) or be an authorised representative of a such a licensee. These are a few of the professionals you will be dealing with.
Accountant – Typically provide tax advice and also financial advice if they are an authorised representative of an AFS.
Stockbroker – can provide advice on gearing and direct investments, however, it is unlikely that a stockbroker will look at the complete picture and ensure that a strategy is the right one for you.
Financial advisor – again they must hold an AFSLor be an authorised representative of a holder of an AFSL. An educated and experienced financial planner will be able to look at your total wealth picture and be in a strong position to provide financial advice. Financial planners are heavily regulated to ensure the advice you receive is in your best interest. As a consumer you are also protected by law. Later, I will explain the role ASIC plays in overseeing the financial planning industry.
Financial planning
Financial planning today is a profession. It has certainly matured and, as an industry, has come a long way over the past 10 years.
The primary aim of a financial planner is to understand the financial objectives you want to achieve. In some instances the adviser may become a close associate of the family or the individual they are dealing with.
To help ‘you’, the adviser needs to know everything about your current situation. So if you are not prepared to share with the adviser everything financial about your life, then simply don’t go and see one. Be prepared to be asked about everything.
Once your financial information is gathered the adviser will then be able to deliver a number of options to you. That is, how can they help you achieve your lifestyle and financial goals.
Of course, the adviser’s job will also be to point out what is not possible. If you are being unrealistic, then you will need to either reduce your expected level of lifestyle, or possibly raise the level of investment risk so that you can afford the lifestyle you are seeking.
A planner, in a way, takes on the role of coach and mentor to you so that you can achieve your financial objectives. So choose your planner carefully. It will be a long journey ahead for all parties involved. I would highly recommend you interview at least three other financial planners to find out which person best suits you. It’s important that you can see yourself getting on with that person.
Jonathan Cattana : Financial Advisor Avestra
Jonathan Cattana : Financial Advisor Avestra
According to a new book, How to pay for private school fees (and still have money in the bank) by Jonathan Cattana, you could be spending $45,000 a year to send your child to a private school by 2017 — just 10 years away. Why so high? Over the past 15 years, school fees have increased at two-and-a-half times the inflation rate, largely to meet the higher building and technology costs.
Additionally:
Learning about money
Most people’s beliefs about money are formed when they are young. Every generation has a different set of money experiences which they apply to their own lives.
The kids of today typically buy food, clothes, entertainment and expensive electronic devices when they first come on the market. But, sadly, this new generation doesn’t have much sense when it comes to money — particularly how to manage it. The challenge for parents is to teach their children some money sense, most importantly about delaying self gratification.
Role of the parents
When kids are little, teaching them about money can be pretty straightforward. You buy them a money box and encourage them to save some of their pocket money or cash from odd jobs around the house or birthday and Christmas gifts.
One way to start them managing money is to give them some pocket money and encourage them to save part of it. Some parents go a step further and double their savings at the end of the year. Or if they are saving to buy a big item, they will meet them halfway.
There are some terrific kids’ savings accounts that have incentives of high bonus rates if children save regularly and don’t withdraw their savings. The BankWest Kids’ Bonus Saver for example, pays 10 percent if deposits are between $25 and $250 and no withdrawals are made each month.
For many kids today the money comes and then, more than likely, it goes. “The combination of a mass of products and services that are becoming the norm for our kids — such as MP3 players, mobile phones, ring tone downloads, SMS voting, designer clothes and sneakers — with more and more opportunities for credit, means that our teenagers are at greater risk of getting themselves into debt than ever before,” says David Liddy, managing director of the Bank of Queensland