estate planning
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.