Estate planning may seem daunting to some.

But whether leaving behind a small estate or a large one, having a good plan is vital.
 
A comprehensive estate planning strategy ensures your assets are in good hands and helps avoid potential problems, such as costly family squabbles over how the wealth is distributed.

Hickey Lawyers commercial and estate planning manager Rod Barnes says while most people plan for their retirement, many do not make arrangements for their estate.

“Wills are often made in a hurry without addressing all relevant considerations, which inevitably leads to problems down the track,” he says.

“Estate planning combines lifetime planning with after death planning to ensure the best result for how your assets are owned and distributed.

“It also achieves other objectives, such as risk management, asset protection and family business succession, which are extremely important.”

Mr Barnes, who has more than 30 years experience in wills and estate planning, has developed the ’10 Commandments for Good Estate Planning’.

He says following the ten fundamental rules is the best way to ensure your estate is appropriately handled.

Commandment 1- Recognise every family situation is different

Don’t be fooled by the ‘one size fits all’ approach.

Mr Barnes says while this approach may appear cost effective, it is often not appropriate and may well result in extra costs and problems in the long run.

Commandment 2 - You must have a will

Without a will, the beneficiaries of an estate are decided by legislation.  This often does not result in the best outcome for the family and increases costs significantly.

Also, without a will, there is no executor to take immediate control of the estate.

Commandment 3 - Everyone should have an enduring power of attorney

Mr Barnes says it is vital to have a power of attorney and to choose one wisely.

“There have been situations where attorneys have acted mistakenly or dishonestly and treated the money and property of others as their own,” he says.

Commandment 4 - Deal with all your estate

Be aware not all items are covered by a will, for example property owned as joint tenants, superannuation and assets in family trusts.

This property often represents the bulk of a person’s wealth.

“Will maker’s need to carefully consider and develop an appropriate strategy to ensure their intentions become reality,” says Mr Barnes.

In relation to family trusts, it is critical to ensure arrangements are in place for a planned change in control following death.

“Those in control also need to have guidance as to how they should act and how long the trust should continue to operate,” he says.

Commandment 5 - Consider binding death benefit nominations for superannuation

Unless a ‘binding death benefit nomination’ form is signed, trustees of super funds are not bound by the nomination and may distribute the funds in a manner that does not reflect your wishes.

Commandment 6 - Consider the advantages of Testamentary Trusts

Mr Barnes says Testamentary Trusts or will trusts are used to provide protection in a number of situations, such as where the will maker does not want his or her assets to pass on to a child because of an inability to manage money or a drug or alcohol dependency.

Commandment 7 - Take account of taxes and pensions

Take into account taxation consequences, which may be different for different assets and beneficiaries.  Also, pension entitlements need to be carefully considered when using trusts.

Commandment 8 - Manage risk

Managing business risk is a complex issue that often requires specialist advice.

“Key steps include identifying the risk, assessing the likelihood and consequences of adverse events, and developing risk management strategies,” says Mr Barnes.

“This means a lot more than just taking out insurance.”

Commandment 9 - Avoid family provision applications

Mr Barnes warns expensive litigation involving family provision applications can be one of the easiest ways to turn a large estate into a small one.

“Will makers often need to balance the competing interests of children from a prior marriage, their current spouse or partner, and children or step-children of a new relationship,” he says.

Commandment 10 - Plan

Planning is the key, and in the first instance involves collecting facts and information, identifying and examining issues and generating and evaluating options.

The final step is to make and implement decisions with the help of prudent legal and professional advice.

“As the old saying goes, if you fail to plan then you plan to fail,” he says.

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