Financial Planning – Estate Planning

The objectives of estate planning are to protect asset wealth today, while allowing for continued asset enjoyment in addition to ensuring such assets are preserved for tomorrow in the most effective manner for future generations.

An estate plan should:

  • Be administratively simple to operate
  • Not be too expensive to maintain
  • Balance lifetime enjoyment of assets/income while preserving assets for the future
  • Be regularly reviewed.

There will be many reasons for establishing your own personal estate plan, and the most appropriate plan will depend on your circumstances and the goals that are desired. The most common tools to provide you with a secure estate plan include Wills, Enduring Powers of Attorney and Trusts.


A Will is a statement by a person about how his or her personal affairs should be actioned after their death. It will contain directions which are not just limited to financial affairs but to other matters such as guardianship of children and desired funeral arrangements.

If a person has made a will and dies testate, then their assets are collected upon death by their executors and trustees and distributed to beneficiaries named in the will. Liabilities and expenses are met first ahead of distribution.

A person is said to have died intestate, if they die without having made a Will. This means that assets are divided according to a fixed formula under the Administration Act 1969. This may see these assets divided in a way that may not be considered satisfactory or even desired by the deceased person.

It is important to note here that a will can be challenged through the courts.

Enduring Powers of Attorney

An Enduring Power of Attorney is as important as a will. It allows for a person to appoint an attorney to act in relation to their personal care and welfare, or to act in relation to property. This will occur if the person granting such power to another is incapable through mental or physical disability to act on his or her own behalf. If a person is unable to make decisions and there is no enduring power of attorney, then an application is made to the courts to appoint a manager, who can then make these decisions about personal care and property. This application can be a time consuming and costly exercise.


A Trust is a legal arrangement that allows for the legal title to assets to be placed under an obligation and managed for the benefit of others.

There are three parties to a Trust: the Settlors, the Trustees and the Beneficiaries. A Trust is controlled and managed by a Trust Deed that also identifies who the beneficiaries will be.

Asset Control: transferring assets to a trust will not mean loss of control of these assets, as quite often a settlor is also one of the trustees. This means the settlor will have a share of the decisions made around the assets for the beneficiaries.

Gifting: once assets are transferred to a trust, a document acknowledging the debt to the settlors is set up. A gifting programme is then implemented to reduce this debt. Each settlor can forgive this debt by way of a gift and current legislation allows for each person to forgive up to $27,000 per year without attracting Gift Duty. However, if your Trust is the beneficiary of a Will, then no gifting duty is payable if the proceeds are directed to the Trust. This overcomes gift duty problems arising from an inheritance.

Choosing the most appropriate Trustees – is fairly straight forward, although it is recommended that one of the trustees is independent. We recommend a professional trustee company, an accountant or a lawyer. These professionals are also able to provide prudent administration of a Trust, which is an additional consideration. An administrator is aware of pitfalls, such as improper use of a Trust, which may arise if the Trust is set up for liability/debt avoidance for example.

Beneficiaries: are the people who will benefit from the assets of the trust either from enjoyment or final settlement. They may be named directly in the trust deed or referred to by description (such as grandchildren not yet born). A settlor can be a trustee as well as a beneficiary, providing there is no conflict of interest in the positions.

Other Estate Planning Tools

Relationship Property Agreements: are used to protect important assets that have unequal ownership or may be separately owned. They can be completed by people who are married or in a de-facto relationship, in regard to the status and ownership of non-relationship property.

Life Interest Wills: are used to limit asset transfer. These allows for the assets to be held on trust for a surviving partner to enjoy during their lifetime, and then transferred to remaining beneficiaries.

Guidelines to Estate Planning

  • Review the ownership of assets and how these can be protected for future generations.
  • Have the most cost effective asset structure in place, while maintaining control and enjoyment of assets during your lifetime.
  • Have a structure to provide nominated people access to deal with assets and make decisions on your behalf for personal care and assistance.

Contact us for more information.