Aurora News - Spring 2017Dear , I hope that 2017 has been a great year for you so far and that the final months are better still. In this newsletter, we discuss 3 areas that are important for you and your families financial security: 1. The Importance of Wills – Wills are a key element in ensuring your financial wealth is passed on to those you care about in accordance with your wishes. Below we discuss why you need one, what they do and don’t cover, who should be your executor and when should you review yours . We recommend that you discuss your wills and any estate planning issues with your solicitor. 2. Getting the Balance Right with Investing – In this 3 minute video Paul Clitheroe talks about risk and why it shouldn’t be an “all or nothing” choice. Paul talks about his own experience of how his approach to investing has changed as he reaches different stages in his life. 3. “Time Flies Like an Arrow; Fruit Flies Like a Banana" (Anthony G. Oettinger) - The Importance of Time in Planning A Successful Financial Future – Those of you who are clients will have this well in hand but others you know will benefit from reading this article explaining the value of time in planning a successful financial future. Please feel free to share it with others. Why Do You Need a Will? Wills are an important part of everyone’s estate planning. Here are some reasons why it’s important to have a one: · Certainty that your assets will end up with the right people (beneficiaries) at the right time; · Your affairs will be dealt with per your wishes reducing the potential for conflict amongst family and loved ones; · The ability to nominate a guardian for minor children; · Probate (i.e. the court giving the executor power to carry out your will) granted without undue delay and cost; and · The ability to set up a testamentary trust What Assets are Covered by a Will and which Aren’t This can sometimes be an area of confusion. Only property owned by the deceased person at the time of death and property specifically directed into the estate form part of the estate assets. Only estate assets can be dealt with in the will. Non-estate assets need to be dealt with via other mechanisms. Here are some common assets which form part of an estate: · Shares, managed funds, term deposits and property owned by the individual · Personal Property – e.g. car · Loans owed to the person (including loans to a discretionary trust) · Assets held as tenants in common Here some common assets which are non-estate assets: · Superannuation (unless there is a binding nomination to the estate or the trustee of the super fund pays to the estate as per its rules) · Insurance policies where the beneficiary is nominated · Assets held by discretionary trusts that the person controls · Assets held as joint tenants Assets held as Joint Tenants Joint tenancy is where the people share equal ownership of the property and have an equal, undivided right to keep or dispose of the property. Often a couple will hold ownership of their house or certain bank accounts as joint tenants. Assets held in this way are not controlled by the will .The deceased’s share in the assets automatically passes to the surviving joint tenant upon death. What if You Die Without a Will? If you die without a will an administrator will be appointed. In such a case, your estate assets will be distributed according to a state-based formula. Generally, the estate passes to the person’s next of kin as specified in the formula. Each state has its own legislation in regards to this. This means that your assets could end up in the hands of people you didn’t intend to receive part of your estate. Who Should be My Executor? Being the executor of an estate is an important role and is one that over the years I’ve seen many clients give considerable thought and attention to in choosing the right person(s). Not just who they trust but also those who they feel are strong enough to deal with the responsibility of the role and the potential stress and pressure applied by beneficiaries of their estate. The executor is the person responsible for carrying out the instructions in the will and is appointed by the will. Joint executors can also be appointed. A person is free to appoint whomever they like as their executors and a Court has no discretion to refuse to grant the executorship unless the appointed person is under a legal disability (e.g. mental or physical incapacity or they are a minor). Here are some important issues to consider when choosing an executor: · Are they likely to outlive you? · Will they be impartial if there is a dispute? · Do they have some understanding of your assets? · Will they seek specialist advice? · Are they happy to take on the responsibilities? People should consider nominating an alternate executor in case the first executor is not available or changes their mind. Trigger Events to Review Your Will In many states, a marriage invalidates a will, unless the will is made in contemplation of the marriage. In some states, the gift to the spouse is not revoked however the remainder of the will is invalidated meaning partial intestacy can occur in regards to non-spouse beneficiaries. In contrast, divorce does not invalidate a will in most states. In most states divorce generally only revokes a gift to the spouse. Listed below are some common life events which should trigger a review of your estate planning needs: · Marriage, or entering a de facto relationship · Separation, divorce or ending a de facto relationship · Starting or adding to the family · Becoming a grandparent · Change in debt levels · Starting a business · Buying or selling a property · Aging parents/partners · Receiving an inheritance · Changes in the life or circumstances of your executor or beneficiaries It’s important to obtain the advice of a solicitor who specialises in estate planning law when managing your estate planning needs. Like to know more? If you would like to find out more on the areas covered in this Newsletter or would like to discuss other financial planning needs or challenges please contact me on 02 6685 8867 or 0434 210 153. Know Someone Who Could Benefit from Our Advice? We really enjoy working with you and look to work with others like you. Your family, children, friends or colleagues may value our services just as you do! For that reason, we are happy for our clients to refer others to us. When you refer people to us, we introduce them to our practice in a non-obtrusive way. Our initial meeting is complimentary with the aim of understanding their financial goals, aspirations, challenges and how our advice can benefit them. Best Wishes for the remainder of 2017, Chris Whiteford, Adv Dip Fs (FP), CA, BEc (Accounting) Principal | Aurora Financial Planning Authorised Representative of Charter Financial Planning Limited ABN 35 002 976 294 AFSL 23665 Note: Any advice contained in this document is general in nature and does not consider your particular situation. Please do not act on this advice until its appropriateness has been determined by a qualified financial adviser. Whilst the tax implications have been considered we are not, nor do we purport to be a registered tax agent. We strongly recommend you seek detailed tax advice from an appropriately qualified tax agent before proceeding. ContactP: (02) 6685 8867 M: 0434 210 153 2/10 Brigantine Street, Byron Bay NSW 2481 Lvl 1, 95 Tamar Street, Ballina NSW 2478 Aurora Financial Planning Pty Limited (402127) ATF Aurora Trust ABN 73 958 338 024 trading as Aurora Financial Planning is a Corporate authorised representative of Charter Financial PlanningLimited ABN 35 002 976 294, Australia Financial Services Licensee Licence number 234665. If you no longer wish to receive direct marketing from us you may opt out by calling us on the phonenumber under our contact details. You may still receive direct marketing from AMP as product issuer, bringing to your attention products, offerings or other information that may be relevant to you.If you no longer wish to receive this information you may opt out by contacting AMP on 1300 157 173. This document contains general advice only. 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