A Complete Guide to Estate Planning

What Is Estate Planning?

So what is estate planning, and why does it matter so much? Estate planning involves preparing legally enforceable documents that set out how your estate assets are managed during your lifetime and distributed after death. These assets can include property, bank accounts, superannuation benefits, insurance policies, personal property, and business interests.

Estate planning ensures that decisions about your finances, medical care, and estate administration are made by people you trust, rather than by default rules under the law. Without a valid plan in place, you risk dying intestate, which can lead to delays, higher costs, and outcomes that may not reflect your wishes.

What Is an Estate Planning Lawyer?

Many people ask, what is an estate planning lawyer, and when should you speak to one? An estate planning lawyer advises clients on structuring their estate in a legally compliant and tax-efficient manner.

At Lotus Legal, our estate planning lawyers help you:

• Understand your legal options under Western Australian law
• Draft estate planning documents that are clear and enforceable
• Address tax implications and income tax considerations
• Protect minor children and dependent children
• Plan for complex family arrangements, including blended families
• Reduce the risk of future legal disputes

Estate planning is rarely one size fits all. Expert advice ensures your plan reflects your financial situation, family dynamics, and future needs.

Why Is Estate Planning Important?

Estate planning is important because it gives you certainty and peace of mind. It allows you to make your own decisions about who manages your financial affairs, who makes medical decisions for you, and how your assets are distributed.

Without an effective estate plan:

• Assets may not go to the people you intend
• Family members may face delays accessing funds
• Disputes can arise between loved ones
• Tax consequences may reduce the value of your estate
• The Public Trustee may become involved by default

Estate planning ensures your wishes are respected and your loved ones are supported when it matters most.

Key Components of an Effective Estate Plan

A good estate plan usually includes several legal documents, each serving a specific purpose.

A Valid Will

Your will is the basis of your estate plan. It sets out how your estate assets are distributed and appoints a legal personal representative to manage your estate administration.

Under the Wills Act in Western Australia, a will must meet strict formal requirements to be legally valid. A properly drafted will can also incorporate testamentary trusts to protect beneficiaries and manage tax planning.

Enduring Power of Attorney

An enduring power of attorney allows you to appoint a trusted person to manage your financial matters if you lose mental capacity. This can include dealing with bank accounts, property ownership, and financial decisions.

Without this document, your family may need to apply to the State Administrative Tribunal to gain authority to act on your behalf.

Enduring Guardianship and Advance Health Directives

Enduring guardianship and advance health directives allow you to make decisions about your medical treatment and lifestyle decisions in advance. These documents ensure your specific wishes regarding medical care are followed if you cannot communicate them yourself.

Superannuation Death Benefits

Superannuation does not automatically form part of your estate. Planning for superannuation death benefits is critical, especially if you want certainty over who receives them.

Binding death benefit nominations and reversionary nominations should be reviewed regularly to ensure they remain valid and reflect your intentions.

Trusts and Business Succession

For some people, estate planning involves trusts such as a family trust or a discretionary trust. This may require reviewing the trust deed and control mechanisms.

If you own a business, business succession planning is essential to ensure continuity, protect value, and minimise tax consequences.

Estate Planning and Tax Implications

Estate planning is closely linked to effective tax planning. While there is no inheritance tax in Australia, tax implications can still arise through income tax, capital gains tax, and superannuation benefits.

An effective estate plan considers:

• Distributing assets in a tax-efficient manner
• Managing superannuation benefits
• Minimising unnecessary tax consequences
• Protecting assets for future generations

Proper advice can significantly reduce the financial burden on your estate and beneficiaries.

Estate Planning for Families and Changing Circumstances

Your estate plan should reflect your personal circumstances and family dynamics. This is particularly important for:

• Blended families
• Families with minor children
• Dependent adult beneficiaries
• Changes in relationships or financial situation

Estate planning documents should be reviewed regularly, especially when circumstances change such as marriage, separation, the birth of children, or acquiring new assets.

Potential Challenges Without Proper Estate Planning

Without a clear and legally enforceable estate plan, families often face unnecessary stress and conflict. Common challenges include:

• Disputes over distributing assets
• Delays in accessing funds
• Uncertainty around legal decisions
• Increased legal and administrative costs

Estate planning reduces these risks by providing clarity and certainty.

Getting Expert Estate Planning Advice

Estate planning is about more than documents; it’s about understanding your options and making informed decisions that protect your loved ones and your legacy.

At Lotus Legal, we take the time to understand your circumstances and advise clients in plain English. We help you create an effective estate plan that complies with relevant legislation in Western Australia and evolves as your life changes.

If you want certainty, control, and peace of mind, speaking with an experienced estate planning lawyer is the first step.