This article is drawn from our recent webinar on Estate & Succession Planning, that resonated with many of our clients. Our panel of experts included Dylan Cresswell, Partner and Private Client Adviser, Jo Walters, Principal Lawyer at Sterling Walters Lawyers, and Tom Davies, Director of our SMSF division.
If you could no longer make decisions tomorrow, who would manage your affairs, and would your family know what you intended? For many families the honest answer is "not sure".
We spend decades building wealth, but often far less time thinking about what will happen to it when circumstances change.
Building wealth is really only half the job.
Succession planning is not about what happens after death. It is about preparing for incapacity, understanding who controls family assets, considering when and how wealth should pass between generations,and ensuring financial and legal arrangements work together.
As Dylan Cresswell, Partner - Wealth put it "Building wealth is really only half the job." Together with estate planning and family lawyer Jo Walters of Sterling Walters Lawyers, Dylan explored some of the practical considerations families should be thinking about.
1. Understand what you own, how it is owned and who controls it
A will is an important part of estate planning, but it doesnot necessarily govern every asset.
Family wealth may include personally held investments,jointly owned property, superannuation or an SMSF, family trusts, companies,business interests, insurance policies and loans to family members.
Different structures can have different rules aroundownership, control and succession.
That makes mapping your affairs an important starting point:
- What do you own?
- How is it held?
- Who controls it if you lose capacity?
- What happens when you die?
2. Make sure your financial and legal arrangements work together
Estate planning rarely sits neatly within one professional discipline.
As Jo explained, collaboration between financial advisers,accountants and estate planning lawyers can be critical, particularly where a family has trusts, companies, an SMSF or more complex financial arrangements.
The goal is not simply to have documents inplace. It is to ensure those documents and your broader financial structureswork together to achieve what you intended.
3. Consider whether equal is always equitable
Intergenerational wealth transfer is increasingly happening during people’s lifetimes.
Parents and grandparents may help younger generations purchase property, establish businesses or manage other financial commitments. But providing significant assistance to one child can create questions about how other beneficiaries are treated later.
Is the money a gift or a loan? Should it affect a future inheritance? What happens if a relationship breaks down?
The important point is to make these decisions deliberately and document them appropriately.
We're seeing an increasing number of people give with "warm hands"
4. Plan for incapacity, not only death
Succession planning also needs to consider what happens if you are still alive but can no longer manage your own affairs.
Powers of attorney and appropriate arrangements around companies, trusts and SMSFs can become particularly important here.
Jo’s advice was also refreshingly practical: "make sure the people who may one day manage your affairs know where key documents and information can be found".
Make sure the people who may one day manage your affairs know where the key documents and information can be found
5. Have the family conversation
Perhaps the most important planning tool is also one of the simplest: communication.
Families do not necessarily need to disclose every asset or dollar. But discussing intentions, responsibilities and expectations can help the next generation understand the thinking behind important decisions.
As Dylan put it, the objective is to help families become “event ready”, rather than leaving difficult decisions to be worked through during an already challenging time.
Succession planning is ultimately about more than transferring assets. It is about creating continuity and giving the people around you greater clarity about what happens next.
Families do not necessarily need to disclose every asset or dollar. But discussing intentions, responsibilities and expectations can help the next generation understand the thinking behind important decisions.
If your answers to “What do I own?”, “Who controls it if I can’t?” and “Are my family and advisers prepared?” reveal gaps, it may be time to bring your financial, accounting and legal advisers together around one coordinated plan.
Watch the full webinar recording below
The information contained in this article is general advice only and does not take into account your objectives, financial situation or needs. Before acting on any information in this article, you should consider whether it is appropriate for you, having regard to your objectives, financial situation and needs. You should consider the relevant product disclosure statement or other applicable disclosure document before making any investment decision. If you require advice that takes into account your personal circumstances, you should speak with a qualified financial adviser.
