Estate planning
for doctors and dentists

Estate planning is all about ensuring
that the right assets pass to the
right people at the right time in a cost-effective way.

The ultimate objective of an estate plan is to protect and preserve the wealth that has been generated, by ensuring it does not get eroded by unnecessary taxes and costs and is protected as best as possible from any competing claims, so that your intended beneficiaries can benefit from it.

Estate planning is generally a comprehensive and also complex process that involves a number of different documents.

estate planning

Wills

A Will is a legal document that sets out your wishes for the distribution of your estate after your death. Having a legally valid and up-to-date Will is the best way to ensure that your assets are protected and distributed according to your wishes.

In the event you die without a Will (i.e. you die intestate), your estate may be divided according to a government formula, which is different for every state and territory and may not reflect your wishes, potentially causing undue hardship, costs and delays for your family.

Your Will is one of the most important documents you will ever sign, so it’s advisable that you have it prepared by a legal professional and seek advice from your accountant and/or financial adviser.

Preparing your own Will is not advisable. A Will must conform to strict legal requirements, otherwise the courts may decide it is not valid. Ambiguous wording is extremely common in home-made Wills and may result in substantial costs and delay in having the Supreme Court resolve the ambiguity.

Your Will usually contains the following details:
• Your executor(s)
• The guardian(s) for your children
• Your beneficiaries
• Any specific gifts or bequests
• Any other specific instructions.

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If you’d like to speak to our consultants, please call the office at 08 9381 2704

Testamentary trusts

When we talk about complex Wills, we commonly refer to a Will that incorporates testamentary trusts. This type of Will has become more popular as people have become more aware of the tax and asset protection benefits of this type of structure. Many parents do not wish to see their estate fall in the hands of their children’s ex-spouses, and have a strong desire to preserve their wealth for their bloodline.

A testamentary trust is a trust created by your Will, and does not come into effect until after your death. There are various types of testamentary trusts, but it is usually a trust where the trustee has full discretion regarding distributions to the beneficiaries.

The trust can be funded by some or all of your assets and by payments in consequence of your death, such as superannuation death benefits or insurance proceeds – if paid to your estate rather than directly to your dependants or beneficiaries in your Will.

You set the terms of the testamentary trust in your Will. These terms can restrict the ability of any of the beneficiaries to control the activities and investments of the trust or give them complete control.

Another major advantage of a testamentary trust is that it offers unique tax benefits for minor beneficiaries such as children and grandchildren. They are considered to be adults for tax purposes and thus benefit from the tax-free threshold and income tax offsets.

This type of structure should be carefully considered by medical professionals, as you will typically leave behind a large estate, and it makes sense to provide your loved with suitable tax and asset protection benefits.

More on this topic

Let's talk

Yves Schoof

I look forward to helping you. To book an appointment, please call 08 9381 2704

Other entities

Many people don’t know that the Will only deals with part of your assets when you pass away. Assets held in superannuation funds and trusts typically do not form part of your estate. Hence it is critical that you seek expert advice to make sure that the assets held in these entities also end up in the right hands with minimal costs and delays.

Other estate planning documents

In addition to your Will you should also have the following documents prepared:

– Power of Attorney: you nominate the person or people who will manage your financial and property affairs when you lose capacity;
– Power of Guardianship: you nominate the person or people who will look after your personal welfare and make health and lifestyle related decisions when you lose capacity.

Please note, these documents have different names and formats in different States and Territories. Unlike the Will, they operate while you are still alive. We can help you formulate your wishes, educate you on your options and also assist with cost-effective implementation of your estate planning documents. We work with fixed-price lawyers and assist in coordinating their services.

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