If there is one thing that 2020 taught us, it is that we simply cannot predict what is around the next corner. Now is the time to protect your assets and have a rock-solid plan for any eventuality.
2020 proved to be a tricky year to be a financial adviser in more ways than one. Quite aside from the uncertainty and volatility that Covid presented, recent developments in regulation impacted the way advisers are able to operate.
Having a plan matters. Having a well thought out, thorough and comprehensive plan matters even more.
There are many variables that can impact your estate and its future, from wills and estate plans to tax structures and trusts. Many families have multiple professionals engaged in advisory roles, from accountants to lawyers, risk advisers to financial planners, all employed to provide expert advice in their chosen field. A common issue that arises is that when something happens, we find that the advisers are on different pages, resulting sometimes in unwanted and unexpected tax bills or an unanticipated change in the distribution of wealth. All advisers may have offered individually excellent advice, but not necessarily cohesive advice. Like cogs in a wheel, the various components need to work together to ensure a smooth journey!
So do you and your family need to think about estate planning? If the answer is maybe or yes, where do you start?
The very first step is to engage a professional, a specialist, an AFAN advisor, someone you can trust. Together, follow these four easy steps:
Know what you have. It sounds obvious but sometimes it is not a simple as it appears. What forms the ‘estate?’ Many families have trusts, assets in superfunds and jointly owned assets. These things don’t form part of your estate. So, it’s important to really understand what is in the estate, what is excluded from it and how each of those entities are structured. Who are the eventual beneficiaries, and who are the decision makers and executors? There is no ‘one-size fits all’ and in many cases these entities were established long in the past, when priorities were different.
Make sure all the professionals are on the same page. If you have lawyers that have set up trusts or drafted wills, accountants to look after tax, financial and risk advisers to protect & grow wealth, these people all need to be in alignment. In many cases, decisions are made in an ad hoc manner as the need arises. Someone needs to have a clear overview and establish the motive behind each financial entity. Circumstances change, especially in families and these entities need to change with the circumstances. When you are estate planning, that is the time to get your proverbial ducks in a row and get all your advisers working towards the one clear goal – the best outcome for your family moving forward.
Consider all possible outcomes, the good, the bad and the ugly. Identify both what your ideal outcome is, and what you definitely do not want to happen. Play out various scenarios and join the dots. By identifying hidden pitfalls such as tax implications, possible claims on the estate, changes to legislation and more, you can mitigate against them. The devil is in the detail.
FINALLY, STEP 4
Take the first step. Just get started. It does not have to be complicated. There are professionals who are really good at this stuff. Ask questions, take advice, be proactive. If you do not trust someone’s advice, move on. Find someone you do trust, that you can be candid with, who will listen to your concerns and your objectives and who will readily and professionally engage with the members of your team.
Ready to find out more?
Drop us a line today and make a time to chat with one of our team
At AFAN, we are driven to achieving the very best outcomes for every individual and every unique circumstance. We know that no two families are the same. That no two set of financial affairs are the same. So, while some find the notion of estate planning a little uncomfortable – facing one’s mortality – there really is no better thing you can do for your family.
As with everything, the first step is the hardest to take. We are here to guide you.