18th May 2006 
 
Estate planning is incorrectly perceived to be all about trusts and wills but it is far more than that according to Louise Biti, Head of Technical Services at Asteron, who believes every Australian should consider estate planning as they head towards retirement.  
 
This was the warning presented to a large group of financial specialists at today’s Institute of Chartered Accountants Business Forum. Ms Bitt said estate planning, which coordinates disposal of super and non-super assets, is a highly effective way to plan for the future.  
 
“The Federal budget may have heighten people’s interest in planning for their retirement. Those people who have been prompted into thinking about their future, should consider estate planning,” she said.  
 
She said estate planning should be considered with all financial decisions and should include a review of ownership (who or how), who inherits upon death, family circumstances that may create challenges and taxation impact. She also encouraged those considering estate planning to think about equalisation and equity for beneficiaries and setting-up instructions.  
 
Ms Biti said that sometimes money breeds greed, which can result in the courts being engaged to settle estate disputes. She said that if disputes arise they could be resolved via the courts but warned people to be aware that when wills are contested:  

• Rules vary between each of the states (who and time periods);
 

• It delays distribution of the estate;
 

• The costs are borne by the estate; and
 

• Can contribute to family bitterness.

1. An allocation to all potential claimants
 

2. Use of structures, which do not fall into the estate - eg. discretionary trust
 

3. Use of investments, which allow direct beneficiary nominations - eg. superannuation, insurance policies, insurance bonds, income streams

• No binding nomination or reversion
•  
  
• Trust deed sets default as payment to estate
 

• Will splits all benefits 50% to wife (tax free) and 50% to 34 year old son (must pay 15% tax)<?li>  
  
• Therefore 50% of super is paid to son and taxed at 15% ($45,000) instead of being all tax-free to the wife, this remains the same post this year’s budget.