What is Estate Planning?
Estate planning is a deliberate planning process of ensuring your loved ones have reasonable financial assets to live on in the event of your death, and for yourself during your golden years or if you should lose your mental capacity.
If you are a business owner, estate planning ensures your business can be properly transferred to the right successors, with sufficient liquidity in your estate or company to discharge your business debt liabilities. This is to minimise your business debts from flowing into your personal assets.
If you are divorced or in separation leading to a divorce, estate planning ensures your assets are not being cannibalised by your ex-spouse, and the assets meant for your children are being protected. It also ensures your existing children’s financial interests are protected when you enter a new marriage.
If you have inheritance, estate planning ensures your inheritance is being conserved and shielded from risk of creditors, failed marriage, and unwise investments.
If you co-habit with your partner, estate planning ensures your partner’s financial security is provided for in the event of your passing on, and sufficient assets are locked away for your own retirement or if you lose your mental capacity.
Technically, it involves analysing the ownerships of your current assets and liabilities, creating or acquiring assets for wealth transfer, protecting these assets from creditors, and distributing the assets to your intended beneficiaries with minimum estate settlement cost.
It combines legal and financial tools to achieve the desired outcome. For example, a life insurance contract is usually used to create and secure an immediate estate; an investment fund is placed in a statutory or private trust to protect against creditors; a will is drafted to give legal rights to a designated person to manage your estate and distribute the estate to the right people; a lasting power of attorney is placed to designate someone to manage your financial affairs if you lose your mental capacity. A business buy-sell agreement to ensure your business interest can be monetised.
It is therefore important to seek professional help when creating an estate plan. Our financial advisers are trained with in-depth understanding of various estate planning financial tools, as well as the laws relevant to estate planning.
Contact us today to talk about your estate planning needs for your loved ones and yourself.