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29 Sep 2020

Unsung Benefits of Estate Planning

As a financial adviser, you already know how crucial financial planning can be for the future of your clients and their families. Estate Planning is another important component of that ‘big financial picture’, designed to give them certainty around their wishes including the distribution of their hard-earned assets and wealth after they’re gone, or if business or personal relationships change, or if they no longer have capacity to make decisions for themselves.

Here’s how Estate Planning can benefit your clients and why it’s an essential conversation to have with every client.

Five reasons to consider Estate Planning

Estate Planning is about minimising risks, and ensuring wealth is distributed in an effective and streamlined way, or wishes are fulfilled around critical matters such as who raises the children or who decides on financial or personal care and welfare matters if we’re no longer here or no longer able to make such decisions for ourselves. Our clients can’t rely on a court to automatically read their minds or know their wishes unless they are documented properly.

Key benefits include:

Avoid complex and lengthy legal processes: Without clear documentation about assets or wishes. it can be a complicated and expensive process to rely on Courts to make key decisions. This documentation might involve a Will (for personally-owned assets), or appointing guardians for dependent children, or Enduring Powers of Attorney (if our clients are alive but no longer have capacity) or a Trust Deed or a contracting-out agreement. Appointing the right people ahead of time and being clear about asset ownership can simplify matters for those either left behind or those responsible for making decisions on our clients’ behalf.

Alleviate the burden on loved ones or business partners: The death or disablement of a family member or business partner, or the break-up of a personal or business relationship is an emotional time for everyone involved, and it can be difficult to make important financial decisions at such a time. Estate Planning can ensure matters are worked out before they are needed for peace of mind and to alleviate additional stresses and complications for all involved.

Protect minor children: Part of Estate Planning is nominating someone to take care of their children until they turn 18 if both parents passed away. Without guardianship arrangements, it will be up to the Court to decide and it might not be the person our client would have chosen. 

Control and certainty over assets: Estate Planning ensures our clients are aware of how their assets are owned, how relationships will impact on asset ownership and what steps they need to take to ensure their assets are distributed or divided as they’d like or what their wishes are if they are no longer here or are unable to make decisions for themselves. Many Kiwis think a Will covers everything, but it only covers assets that are personally owned and it is only triggered by death. Many of our clients have assets that are not personally owned (they might be jointly owned or in a Trust), which won’t be covered by the Will. And there are events other than death that impact on the control our clients have over their assets including longer-term relationships or mental incapacity.

Save money and time: Irrespective of whether our clients have a little or a lot, encouraging them to sort out their estate planning requirements ahead of time can save money, time and stress. Help your clients avoid unnecessary costs and reduce the overall length of the process by being aware of the decisions they need to make now.

These are just some of the benefits of good Estate Planning for your clients. Being able to identify gaps enables you to point them in the right direction and get sorted as early as possible.