Planning to avoid “Succession”

You may have heard about the Netflix program “Succession”, the story of a media family jostling to take over the family dynasty.   

If fictional family dramas are not your thing, the Murdoch and the Rinehart families have also shown recently that things are not always smooth sailing when it comes to leaving a legacy.   

Even if you are not at the helm of a multi-billion-dollar, multi-generational business empire, planning is crucial to avoid in-fighting, dysfunction, and the rapid depletion of your estate.   

Nobody wants to think about their future mortality, but leaving everything to chance is a great way of ensuring nobody ends up happy, except for the lawyers.   

Regardless of the size of your nest egg, estate planning ensures that your hard-built wealth is not lost in legal fees, as potential claimants argue over what your intentions might have been…   

Why should you undertake estate planning?   

Effective estate planning allows someone clearly to state their wishes, and to identify their beneficiaries, shielding loved ones from unnecessary stress, tax burdens, and legal disputes.   

A well-structured plan can address complex issues, such as capital gains tax (CGT) and superannuation, and clarify who should be receiving what part of your estate.  

In Australia, around 10% of wills are contested each year, primarily due to perceived unfairness or insufficient provisions for family members.  Of these, research from the University of Queensland found that 74% of contested wills in court are successfully altered, with mediation raising the alteration rate to 87%.  

Most disputes are initiated by family members, particularly children and partners, and are commonly driven by perceived issues such as exclusion or unequal asset distribution.  

Common estate planning pitfalls 

Peter Bobbin , an estate law expert featured in the Australian Shareholders' Association 's (ASA) "Masterclass in Estate Planning," identifies some of the biggest mistakes in estate planning:   

1. Doing nothing:  without a plan, your assets may be distributed according to default legal rules, which may not align with your wishes.  

1. A lack of documentation:  proper tax planning is essential, to avoid CGT and superannuation issues imposing financial burdens on your heirs.  

1. No enduring power of attorney or guardianship:  if someone is not assigned to manage your affairs in case of incapacity, court intervention may be required.   

1. Self-written wills:  while it might seem cost-effective, drafting your own will without legal advice can result in future disputes.   

1. Failure to communicate:  being transparent with your family about your estate plan can help you to manage expectations and reduce the risk of future disputes.   

The legal challenges of the Murdoch and Rinehart families serve as a powerful reminder that even vast fortunes and businesses are vulnerable without proper estate planning.   

Proactively managing your estate might help avoid drawn-out legal battles and to ensure that your assets go to your heirs and not to the government.  

Protecting your financial legacy 

For investors, estate planning is more than just passing on wealth—it is about safeguarding your financial legacy.   

A well-executed plan not only secures your investments but also helps to foster family harmony and give clear direction and support during challenging and stressful times.  

You have built up a set of values that you live by, and an estate that sustains you.  Now you need to work out what legacy you want to leave.  

While estate planning is often associated with wealthy people, in reality it is a vital activity for anyone with assets, no matter how modest or complex.  

With professional guidance, you can avoid common mistakes, manage tax implications, and craft a robust estate plan, saving your family from avoidable challenges.  

ASA’s Masterclass: a guide to thoughtful planning 

The Australian Shareholders' Association’s "Masterclass in Estate Planning," led by Peter Bobbin, offers expert guidance to investors at any stage of their planning.  

It provides the tools to refine or create an estate plan that will protect your legacy for future generations and make informed decisions about your estate.  

Visit the website to join the Masterclass today, and secure peace of mind for yourself and your family.  

Find out more about ASA here.