What is estate planning?

No one likes thinking about death, let alone preparing for it. Perhaps that’s why many overlook estate planning, and 60 per cent of Australian’s die without having made a Will*. 

Essentially, estate planning (A form of financial planning) is a way of ensuring that all your hard-earned assets pass onto your nominated family members in the most financially efficient and tax-effective way possible.   

At its simplest, estate planning involves working with your financial planner to create four documents. The most important of which is your Will. 

Last Will and Testament

A Will is a legally binding document specifying what will happen to your children, money, property and assets when you die. Without a legally binding Will in place:

    • there is no guarantee that what you own will go to the people your want, or
    • that children under the age of 18 will be cared for by someone you know and trust should you die unexpectedly.

So your Will is the best way of protecting your family and ensuring your hard-earned assets continue to benefit them.

Enduring Power of Attorney (EPA)

Secondary to your Will in estate planning is the Enduring Power of Attorney (EPA) document. Your EPA nominates a family member (or friend) you trust to manage your assets and make financial decisions in the event illness or accident leaves you unable to do so.

Advanced Medical Directive

Often called a ‘living Will’ an advanced medical directive outlines your wishes relating to your health management, and medical care should an illness or accident render you incapable of managing your affairs. Knowing your medical and end-of-life preferences reduces the burden family members could face if asked to make tough medical decisions on your behalf.

A Living Trust

The benefit of a Living Trust is that it protects assets and reduces tax paid by beneficiaries from income earned from an inheritance. However, the testamentary trust does not come into effect until after your death. Setting up a Living Trust does not suit everyone’s financial situation and family circumstances, so seek expert advice.

How do you get started on an estate plan?

Before you talk to a financial planner about creating the four essential estate planning documents, here are some vital steps you can take that will save time and money.

    • Make a list of all your assets, including bank accounts, investments, real estate, life insurance, business interests, and personal property.
    • Determine who will inherit specific assets and in what time frame. For example, if you want your daughter to inherit your engagement and wedding rings, you might put an age limit on it, such as when she turns 25.
    • Consider whom you would choose like to be the Executor for your Will, but ask that person whether he or she wants the responsibility and is willing to handle the paperwork after you die.
    • Decide who you want to be the guardian of your children should you die before they turn 18. But don’t forget to ask that person first. Also, you may wish to choose a trustee to handle the assets you leave your children until a nominated age.
    • Download the Enduring Power of Attorney Information Kit, read the definitions and then decide whom you trust to take on the role.
    • Read What is an advance medical care directive? This information will help you determine your wishes, values, and preferences for future medical care. But more importantly, whom you trust as your decision-maker should an accident, severe injury or terminal illness incapacitate you.

Having most of this information at hand will help your financial planner make your estate planning session effortless.

Yearly estate plan health check 

Once you have your estate plan, review it yearly. Life and circumstances can change. For example, if you divorce, marry, end a de facto relationship, enter into or terminate a civil partnership, this may partially or fully revoke your Will or Enduring Power of Attorney.  


Most people spend their entire working life creating assets but give little thought to the distribution of assets after their death. In Australia, over 60 per cent of people die without a Will. 

Should you die without a Will, and you have children under the age of 18, a government agency will appoint a guardian for them. Whereas with a legal Will in place, a guardian of your choosing will care for your children until they are of legal age.    

Ultimately, professional estate planning gives you peace of mind. Your hard-earned assets pass onto family members of your choosing in the most financially efficient and tax-effective way possible. And if you have children under that age of 18, people you trust care for them.  

From simple Wills to complex personal and business asset ownership, our financial planners can help you plan your estate. Reach out to us at Carbon Wealth. We welcome your questions. 


*Source: Legal Aid WA 

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