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Estate planning triggers

Although it includes the preparation of a valid Will, effective estate planning goes far beyond one single document.

You may have a well-constructed estate plan delivering the outcomes that you want regarding your wealth after death.  When established, your estate plan may pass the fundamental test which is: “Will this plan ensure that the right amount will be paid to the right person at the right time?”

Can you now relax in the comfort that everything is under control? Certainly not. Remember, life is dynamic, and you will encounter major milestones in your journey through life. These milestones can be positive and life affirming. For example, you meet and marry the partner of your dreams or you bring children into the world and face the exciting prospect of watching them flourish and develop. The milestones can also be profoundly sad and traumatic, such as the death of a beloved family member. Sadly these events are part of our existence as human beings.

However, in the joy and sadness accompanying these trigger events, we need to take time out to assess the impact of these events on our future wealth and risk profile.

In the case of a forthcoming marriage, you need to spend some time thinking about the distribution of your property in the event of untimely death or disability after marriage. Marriage, for example generally revokes prior Wills. Everyone contemplating marriage should consider how their property should be distributed after marriage, and also discuss with their financial advisers whether or not a new Will is necessary. If the marriage is a second marriage, the position is even more complex. In this situation, you need to think of a distribution of property which is fair to the children of the first marriage, and possibly your former spouse.

Many individuals fail to appreciate the limitations of a Will. A Will only operates on death of the testator. It does not operate where a testator survives a traumatic event, such as an accident or stroke, but loses mental capacity. It is preferable for individuals to execute an enduring power of attorney to cater for this contingency. In this document, you can appoint a trustworthy person of your choice to handle your affairs during your period of incapacity. This provides certainty, and reduces the risk of state government interference and delays should you lose the capacity to manage your affairs.

Other trigger events in your life which should prompt you to think of the future include:

  • buying a home
  • birth of a child
  • divorce
  • an accident or traumatic event
  • receiving an inheritance or
  • retirement or changing jobs.

When trigger events occur, it is time to review your arrangements with your financial adviser in conjunction with your insurance and legal advisers. This will ensure that your estate plan continues to be robust and effective.

Speak with your financial adviser to discuss your estate plans.

Source: TAL

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