Estate Planning in the New Financial Year – Put Your Tax Return to Use
Now is the perfect time to invest in your estate planning
With the turn of the new financial year, many Australian taxpayers will be receiving some much-needed relief in the form of a tax return.
Additionally, recent changes to individual income tax rates and thresholds by the Australian Government mean that Australian taxpayers could be receiving tax cuts heading into this new financial year from July 1 2024, increasing their take-home pay.
If you’re expecting to receive a tax return or more in your take-home pay, this is the perfect opportunity to invest in your estate planning to ensure that your assets are distributed according to your wishes upon your death.
Why is it important to have a valid and up to date will?
Having a valid and current will is important for many reasons. A will allows you to appoint who you want to be the executors of your estate and administer the distribution of your assets. It also gives you control over who receives the assets that form part of your estate, and in what proportions – opposed to the Government deciding this for you under the legislation which governs intestacy (applicable when someone dies without a will).
Importantly for parents, a will also allows you to appoint a guardian to care for your minor children, who may be left behind in the event of an unexpected death. Your will can also include wishes about how you would like your children to be brought up and cared for by the guardian.
This process also assists your executors in understanding how you would like your estate to be managed, and can reduce any potential conflict relating to the administration of your estate by clearly setting out your wishes.
What happens if I die without a will?
If you pass away without a valid will, the law determines who gets your assets. This is called ‘dying intestate’.
The rules of intestacy apply automatically in the absence of a valid will; the law does not take into account your wishes or personal circumstances, and your hard-earned assets could be transferred to people you may not wish to benefit, for example your parents, siblings, aunts and uncles, and even the Government in some cases.
In the 2022-23 financial year, the Probate Office saw an increase in applications where the person had died intestate, with there being no valid will in an average of one in ten applications.
When do I need to update my will?
It is important to update your will when you experience significant life events so that your will accurately reflects your change in circumstances.
Significant life events could include a change in relationship status, such as marriage, separation, divorce or re-partnering, additions to your family if new children or grandchildren are born, acquiring or disposing of assets such as property or businesses, or if one of your nominated executors or beneficiaries passes away.
What other documents do I need?
A will applies once you have died. The other documents you should consider having in place are:
Enduring Power of Attorney (for financial and personal matters);
Appointment of Medical Treatment Decision Maker; and
Binding Death Benefit Nominations for your superannuation death benefits. For more information about this, refer to one of our previous articles: https://harwoodandrews.com.au/news-ha/2023/6/22/superannuation-nominations-and-death
Get in touch for assistance with your estate planning needs
It is important to have a valid and up to date will to ensure your assets are distributed according to your wishes when you pass away.
The Wills and Estates team at Harwood Andrews can guide you through this process and assist in tailoring a broad range of estate planning documents, including drafting or updating your will, appointing a medical treatment decision maker, appointing an enduring power of attorney, preparing your Binding Death Benefit Nomination, as well as more complex estate arrangements such as testamentary trust wills.
If your circumstances are straightforward, Harwood Andrews also has an online estate planning service. More information can be found here: https://yourwill.online/get-started.
Please get in touch with us for advice and assistance with your estate planning needs.
Alannah Matchett
Lawyer
T 03 5225 5250
amatchett@ha.legal
Tristan Burke
Lawyer
T 03 5225 5226
tburke@ha.legal
Daniela Pavlovic
Principal
T +61 3 5225 5227
E dpavlovic@ha.legal
