The Three Important Parts To Your Succession and Estate Planning

By Simon Shepherd

Have you ever had to suddenly pick up the affairs of a loved one, such as your partner or spouse, parents or children? They may be away travelling or living overseas, they may temporarily off their feet, they may be chronically or terminally ill, or they may no longer be around. 

Or perhaps someone in your family or social network has been through that upsetting process with a loved one? Tried to figure out how their banking works, how the bills are paid and where their investments are?  What about someone losing some of their inheritance in a divorce or from a business failure? 

There are 3 important areas to cover around Succession and Estate Planning:  

1. Prepare a Family Protection Plan - review your existing Wills and Power of Attorney and your family situation to see if there is anything you can do to protect your children and their inheritances from things like divorce and bankruptcy;

2. Record the Information That Matters - that is, the important financial, legal and administrative details your family and advisers will need if something happens to you. For example, information about your super, investments, bank accounts & credit cards, bills to pay, important people & social groups in your life;

3. Prepare a Crisis Management Plan- to guide the family through the financial complexity of the first few months after crisis. This could be a checklist of priorities and questions for the family to work through for example, ‘Day 1 - call the accountant and ask these questions, Day 2 - call the solicitor’ etc.

The old concept of Estate Planning was... The right money to the right people at the right time....

We think a better approach is…The right money; the right information; the right documents; and the right guidance to the right people at the right time.

Most of us have a lot more complexity in our lives than we did 10 or 20 years ago. If something happens to us, we shouldn’t be leaving our family in a situation where they don’t have the important information nor know what to do, they need a plan. 

Once you’ve assembled this information, you might consider organising a family meeting, for example, with your adult children.   You could outline your 3-step crisis management plan to them.  Your conversation might be along the lines of;

- “OK, we’ve got these important legal documents - our Will, Enduring Power of Attorney, Enduring Guardianship etc.

- We’ve captured the key information you need to know if something happens to us. 

- We’ve built a customised crisis management plan to help you work through things when the time comes. 

- Just because you may possess the legal authority (e.g. as our executor or attorney) and even with our key information on hand, doesn’t mean you know what to do, what documents and steps are required and when… so we’ve gone and done the preparation work already, to ease the burden on you.”

To begin this process, you should seek qualified legal advice from a solicitor who ideally specialises in estate planning.  Furthermore, talk to your adviser about what process or service they could offer to assist you in building your plan – or reviewing or fine-tuning your existing one.

You don’t need to know when something will happen to know that it will, be prepared.

To assist you on this journey, we have compiled a checklist of issues you should address in making sure your family is able to manage your estate.

Simon Shepherd is a Platinum Adviser from Morgans Financial in Chatswood, NSW.

Article by:

Simon Shepherd

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