A recent conversation with a Solicitor who is an estate planning specialist reminded me of the importance of not only planning your estate arrangements but also getting expert advice.
It’s not uncommon these days for a couple who are nearing, or are in retirement, to have had a previous relationship and have adult children from that previous relationship. These situations can introduce extra complexity to achieving your desired estate planning objectives.
Consider the situation where the couple in question wish to ensure their likely substantial assets, transfer smoothly to each other should one of them die, and once they have both died their assets are split evenly between their children (including those from their previous relationships).
Often there is a concern that one or more of the children may not be completely happy with assets passing to the new partner upon the death of their parent, particularly if the relationship between these parties is not great.
In this situation, the couple’s wills may say to distribute all assets to each other, and then equally to their children if they are both no longer alive. A nice simple solution.
Any asset owned by the deceased is going to pass into their estate and be distributed to their spouse in accordance with their Will. However, should the will be successfully challenged by the children, the spouse may not receive all the assets which may end up causing financial hardship.
One solution in such circumstances could be to ensure that no assets will pass through to the estate of the first deceased partner. How could you achieve this?
As with all strategies, there are some complexities and issues to understand before implementing such a solution. Some of the main considerations are:
Estate planning can be a complex area, especially when dealing with blended families or beneficiaries who have an inability to manage their own affairs.
Your financial planner is a great place to start to discuss any concerns you have about your estate planning arrangements. And they will be able to refer you to an appropriate estate planning lawyer for comprehensive advice as required.
General advice warning.
Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email firstname.lastname@example.org or visit www.hewison.com.au
Please note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.