Estate planning is all about arranging your financial affairs while you're alive so that, when you die, your assets pass

• to the people you want to receive them,
• the way you intend them to,
• as quickly and simply as possible, and
• with the minimum of tax payable.

Making a start
The starting point for any plan is to work out what you're trying to achieve. That means sitting down with your partner and working out what you would want to happen if one of you were to die.

Rather than think about what to do with each asset you own, the important thing at this stage is to set some basic objectives. You need to focus on what the immediate and future needs of the family would be. What sort of income would they need to live on? Are there mortgages or other debts that would need to be paid off? Or children whose education would need to be paid for?

Once you've agreed on those basic objectives, you can begin to formulate a strategy to achieve them.

Now's the time to bring in your professional advisers, because there are many complications to work through and it's so important to get it right.

Why special treatment for superannuation?
Estate planning needs to take account of all your assets if it's to be effective. You may wonder, therefore, why superannuation rates a special mention.

One reason is that your superannuation payout is likely to be the biggest financial asset available to your family when you die. It may even be worth more than your home, so it needs to be thought about very carefully.

A second reason is that on death your superannuation is treated differently from other assets. While your house, your car, your valuables and most other investments form a part of your estate if you die, that doesn't happen automatically with your superannuation.

Thirdly, superannuation is highly regulated by the government because of its tax advantages. The tax rules that apply to your superannuation when you die are not the same as those applying to other assets, so superannuation needs to be dealt with specifically in your plan.

Finally, unlike most other assets, you can easily add to your superannuation by "topping up" your life insurance cover to pay a larger benefit if you should die.

This extra flexibility in superannuation is very useful in estate planning. Your financial adviser can help you use that flexibility to shape your plan precisely to your objective.

Don't wait until it's too late
Anyone who has superannuation should also have some sort of estate plan. It doesn't need to be complex. Just a few simple preparations now, can eliminate uncertainty and possible hardship for those you leave behind, as well as avoiding unnecessary tax.

Reproduced with the kind permission of Macquarie Investment Management Ltd