What is estate planning and do I need it?

The term “estate planning” should be viewed as any actions that are taken to plan for your death or major debilitation, such that you or your family/beneficiaries receive no surprises. That is:

  1. The wealth within your living or deceased estate is directed to where you or your partner wants it to go
  2. No wealth goes where it was not intended to be distributed
  3. No items/assets are inaccessible to the administrator of the estate through lack of forward planning
  4. No unintended debt survives the event.

In an ideal world this will also encompass:

  1. An Advance Care Directive or similar, for a protracted period of debility
  2. Final arrangements upon death, by advance consultation with you and perhaps other parties.
What this means is that if any of the items listed above are important to you – then you need an estate plan.
What is my “estate”?

Wealth can comprise:

  • Business assets, including medical practices
  • Shares, property and other sector investments
  • Cash “at bank”
  • Equity in a home — either as joint tenants or tenants in common
  • The proceeds of insurance policies designed to create cash funds
  • The proceeds of insurance policies designed to eliminate debt
  • That amount accumulated in a superannuation fund, or funds, and which might include insurance proceeds (note: this is not legally an “estate asset”, but still requires estate planning applied to its distribution)
  • Other “hard” assets (e.g. cars, jewellery and such items of monetary value).

Robust estate planning, however, may also demand attention to other items in an “estate” that need to be accessed and possibly distributed, which might be:

  • Digital assets (e.g. usernames and passwords)
  • Items of sentimental value (e.g. hobby-related collections or possessions of historical interest)
  • Pets.

Finally, the ongoing care and upbringing of children is something critical for which to plan. This may or may not require specific funding as part of your plan, depending on the age of the children and any special needs they have that will demand financial support into adulthood.

A proper estate plan will be as individual as the person who needs it, and will typically require input from lots of parties including you, your spouse, your family, your solicitor and your financial planner. Part of your adviser’s role at Doctors Wealth is to help facilitate the process to get the right outcome for you.