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Questions about Estate Planning? Let us help

Find answers here about Estate Planning and Will preparation – services provided by Perpetual Private Clients for over 120 years. In that time, no two situations have been the same, yet we summarise key issues and answers here that come up time and again. Remember to use topics at left to find related answers.


Commonly asked questions about Estate Planning

Q. Isn’t making provisions for an ‘estate’ only for the ‘rich and famous’?
A. Regardless of your financial status, all you own makes up your estate. When you create directions for distribution during your lifetime – or Estate Planning - you can avoid family feuds or costly misunderstandings later.

Perpetual offers a range of executorial services  to assist you with an estate plan to match your wishes and transfer your wealth whether for family members or a charitable fund.

Q. Can you assist in arranging enduring powers of attorney?
A. Perpetual can be appointed as your attorney under an enduring power of attorney. Acting as an attorney carries very serious legal responsibilities and can often be time consuming.  By appointing Perpetual as your attorney you do not need to burden your children or other family members or friends with these responsibilities. Perpetual can also offer the full suite of services associated with a portfolio management service – custody of assets, discretionary financial planning advice and full personal care.

Q. What are some of the important issues for preparing or updating my Will?
A. Keep it current. Whenever you review your financial plan, make a point to review your Will (or sooner if your circumstances change) to keep it up to date with your wishes.

Be specific. For example, if you want to leave someone out of your Will, make this clear in your Will. It will not keep that person from lodging a claim, but they cannot argue that they have been forgotten. People often assume that if a person is left something in the Will, no matter how small, that person cannot contest the Will. This is not true.

Be realistic. Dependants who are not adequately provided for from your estate may contest the Will. The term ‘adequately provided for’ is relative to the size of your estate, the degree of dependence on you, and consideration of others to whom you have a financial or moral responsibility.

You get what you pay for. The cost of preparing a Will depends on its complexity and reflects the fact that a Will is one of the most important documents you should have. Likewise the fees to administer an estate vary. Please contact us for details on Perpetual fees and options available to properly plan you estate.

Q. How can I leave some of my assets to charity when I die?
A. You can establish a charitable trust either during your life or through your estate by your Will.  If set up during your life, a charitable trust can either be within an existing public charitable trust – such as The Perpetual Foundation, or as a prescribed private fund.

If you wish to leave a bequest to a charitable trust after your death, you may provide in your Will for:

  • A new testamentary charitable trust – however, current tax law subjects the estate to capital gains tax (if applicable), prior to distribution to a testamentary trust;
  • A named fund within an existing public charitable trust (such as The Perpetual Foundation); or
  • A prescribed private fund (as either an active or dormant trust during your life).
Q. Who can I appoint as executor of my estate?
A. A few guidelines to consider when appointing an executor for your Will include:
  • avoid someone who might have a conflict of interest (eg. a business partner who may wish to buy your share of the business).
  • ensure they have the capacity and the time to carry out the duties.
  • this appointment is not a favour you bestow on a friend.  It is an important responsibility which can be time consuming and frustrating.  
  • you can appoint two executors in case one passes away before you.
  • you can appoint Perpetual as your executor.  We have over 120 years of experience in looking after the estates of Australians and in handling disputes among beneficiaries.

 

Q. What are the major duties of an executor?
A. The first responsibility of an executor is to decide whether or not to accept the appointment. Acceptance is not mandatory and if refused, appointing a trustee company to take on the role (Perpetual, for example) is an option.  Note that once a named executor has begun to administer the estate they cannot renounce the appointment.

Initially an executor may be required to arrange and pay for the funeral as well as ensure that estate assets are secure and protected from theft, damage, financial loss or deterioration.

A summary of additional duties expected of an executor would be to:

  • Obtain a grant of probate
  • Prepare an asset and liability statement
  • Determine the beneficiaries
  • Transmit the assets
  • Lodge a tax return
  • Complete other notification or distribution tasks
Q. Can I decide not to accept responsibility of Executor in a Will or arrange for help with the administration of the estate?
A. If you have been nominated as an Executor you do not have to accept the responsibility. You can ask Perpetual to take on the role of executor. We will keep you fully informed of progress in the administration without you having to accept the personal obligations and liabilities of the executor.

Alternatively you may want to take up the appointment as executor but do not want to take on all the administrative tasks.  You can appoint Perpetual as your agent to help you fulfil your duties.  The role of executor can be a complex and time consuming task, possibly exposing individuals to personal legal and financial risk. Perpetual offers estate administration options relieving executors of personal risk whilst guiding them through the executorial process. Perpetual has fulfilled this role for individuals for over 120 years and has skilled and dedicated staff to undertake all the responsibilities.

Q. What are the Capital Gains Tax (CGT) consequences when I die?
A. The type of assets you have determine how they are affected by CGT regardless whether they are part of a trust or part of your estate. Trusts are not necessarily a vehicle to avoid or allay CGT – and in some cases have the potential of triggering this tax.

There are important issues to consider. For example, pre 1985 assets are CGT-free for you but come CGT active on your death. CGT starts accruing from the date of inheritance on any investments or collectables purchased before 1985, payable only when those assets are sold. Your beneficiaries might keep those assets and pass them on to their own children, thus deferring the CGT bill.

Investments and collectables bought AFTER 19 September 1985 incur CGT from their date of purchase, payable when your executor or beneficiaries sell those assets.  See more questions about Estate Planning or talk to a Perpetual financial adviser.

Q. How long should it take for an estate to be administered after someone dies?
A. Generally an Executor has 12 months from the date of death to administer an estate although in most cases in can take less than this. On the other hand some estates take longer because of issues such as claims against the estate or other litigation. Other factors affecting the length of administration are the nature and number of assets, the number of beneficiaries, whether there are overseas assets or beneficiaries and whether all the beneficiaries can be readily located.

The fees to administer an estate can vary considerable. Please contact us to obtain further details of the fees that Perpetual is entitled to charge.

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