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Hi Team,

This week another fairly dry topic; but something that will be vital to your families long term financial security and to your peace of mind, estate planning.

"Financial security is not about how much money you make, but how many generations you keep it for."  
Robert Kiyosaki

Estate planning is having a clear plan and structure for exactly what will happen to your financial affairs when you die. An estate plan consists of several legal documents such as a will, powers of attorney, life insurance and possibly a trust deed, that outline how you would like your affairs dealt with and distributed if and when you die. The aim of a good estate plan is to avoid family disputes and to minimize tax to be paid by your heirs.

"It is currently estimated that half of all Australians die without a will."  ASIC

A will takes effect when you die. It can cover things like how your assets will be shared and distributed, who will look after your children if they are still young, what trusts you want established, how much money you'd like donated to charities and even instructions about your funeral.

If you die without a will or your will is invalid, an administrator appointed by the court pays your bills and taxes from your assets, then distributes the remainder, based on a pre-determined formula, which may not be how you intended your assets to be distributed. If you die and don't have any living relatives, your estate is paid to the state government.

"Greatness is starting something that lives on after you"  Unknown

If you have a large complicated family and you do not want your will to be open to contest or dispute, you can use a "Testamentary Trust" that is activated when you die. The testamentary trust is administered by a trustee nominated in your will who must look after the assets for the benefit of the beneficiaries until the trust expires.

If you want someone to be able to make legal, medical or financial decisions on your behalf while you are still alive you can appoint a "power of attorney" The different types of power of attorney are:

• General power of attorney is where you appoint someone to make financial and legal decisions for you, usually for a specified period of time, for example if you're overseas and unable to manage your legal affairs at home. 
• Enduring power of attorney is where you appoint a person to make financial and legal decisions for you if you lose the capacity to make your own decisions.
• Medical power of attorney can make only medical decisions on your behalf if you become unable to do so yourself.

Another important part of estate planning is life insurance, but that is quite a meaty topic that I will cover in a separate email.

Also, a reminder to send me your personal KPI's for review and comment? (deadline was last week!)

Thanks for reading,
David