I was fascinated to read an article regarding the failure by law groups to communicate in an effective way to enhance their business and client following. One of the key differences was visual content. Well here goes 🙂
Actually I tried to copy a cartoon but failed to get it across.
I read a series of arguments back and forth on the topic and it came down to :
1 – Attracting a level of inquiry
2 – Informing the public well.
I think the answer is a little bit of both to balance the effect. Every day we make an effort to inform our clients but also put options out there to ensure they have a choice.
Recently we posted an article regarding a dispute between the divorced parents of a man who left a reasonable amount of superannuation death benefits. It struck a chord with me because we are constantly pushing clients to check the binding nomination is signed and correctly reflects their intentions.
It only takes an hour of careful review and an entire estate plan can have a vastly different outcome. All of us fall into the trap of thinking “it is simple” and not wanting to spend the right amount of time discussing the detail.
The say “begin with the end in mind” so in my view the practical tips of an estate plan must be explored while the client has a chance to think about the consequences. Here are a few tips that might change the estate administration.
1. Check the owner of the insurance policy. If it states the spouse is the owner then the policy proceeds must be paid to them. It is not an estate asset that might form part of the estate trust established in the will;
2. Do an estate cash flow diagram. Don’t forget the liabilities on the estate such as secured bank creditors, tax and business debts.
3. Deal with the super. Make sure you consider not just the amount in the member account but what tax if any is payable depending on who gets it.
4. Trusts – who controls them, what assets does it have and what will happen. Rule number one is “read the Deed”. Make sure you appoint someone to control the trust in the will or the trust deed. Check what unpaid entitlements are in the financials (they must be forgiven or paid) and give the shares in any trustee company to the right person!
5. Business Partnerships and Joint Ventures. Read any agreement made between the people you are in business with or get one done. Do not rely on statute do determine the outcome (a partnership dissolves on death and the estate entitled to the net assets not market valuation)
6. Check ownership of property Do not make the mistake of thinking a property will form part of the estate if in fact it is held as “joint tenants”. The property must go to the survivor and cannot be distributed to the people getting the residue of the estate.
I recommend that an hour of advice from an experienced legal advisor could potentially save hundreds of thousands of dollars in lost assets, taxation and the cost of disputes. Most of us are worth more dead than alive. Be smart and realise that there may be hidden traps unless we carefully check the details and get the right advice.