Estate planning is a very personal undertaking that does not follow a simple recipe. The layers of consideration in order to arrive at your own strategy which delivers ‘peace of mind’ is often vexed with the issues complex; asset protection, tax, management and governance. The path often seems neither straight nor clear. Ignoring or deferring is however not a valid alternative.

We observe the wrestle clients have with not wanting to ‘rule from the grave’ nor be prescriptive now, knowing that circumstances, law and the economic environment will change. Equally, clients rightfully want to ensure capital that is left to their beneficiaries is appropriately managed and protected to ensure a lasting legacy and that what they seek to occur, does in fact happen.

You'd like to know that their road will be easier than yours. So how do you provide your loved ones with enough flexibility to empower their own decision making without necessarily telling them what to do? A Statement of Wishes provides the crucial balance between the two, and they will be grateful to you for it.

Traditionally, all directions and views as to the conduct of an estate were written into a Will. These are binding – what you say, goes – but this hardwiring can, in fact, give rise to unintended outcomes and leave your executors with rather substantial legal, tax and moral dilemmas. What if there is a change in tax law and your estate directions result in more tax than anticipated? Alternatively, a family member’s personal circumstances change and carrying out the binding directions in your Will potentially exposes the capital to undue risk?

Your Will is also a public record document in view of any and all. A Statement of Wishes, on the other hand, is a private and confidential document which need only be made available to those who have a role in carrying out the instructions of your Will. This permits you to communicate in a more fulsome and purposeful manner to your executors and trustees without the public’s prying eyes invading your private and final instructions.

Worse still, some directions placed in a Will can be entirely ineffectual. For example, did you know a Will has no strict legal enforceability over assets held within a company, trust or superannuation structure? This is because those assets are not legally yours, but that is not to say that you cannot express how you expect they be controlled, managed and protected.

A Statement of Wishes (sometimes also referred to as a Letter or Memorandum of Wishes) is in effect a guiding statement to those responsible for administering your estate and any ongoing structures (such as trusts) as to your personal views, belief and expectations. It is a confidential document, separate from the Will and not placed on public record. Whilst not legally binding, a Statement of Wishes can be considered morally binding on those people whom you have placed stewardship and responsibility to guide your affairs after you are gone.

It can include whatever wishes are important to you, such as:

• How minor children are to be brought up, educated and financially provided for

• How businesses are to be managed and operated

• How assets – be they financial, business or property – are to be managed, divested or wound down

• For what purpose are any existing or testamentary trusts to be managed and to what extent beneficiaries of those trusts should benefit

• Which charities or impact causes should be considered

• Which people or professional advisers should be consulted

• What sort of ‘send-off’ or funeral arrangements you would like

• Moreover, even who is to take care of your pets

A Statement of Wishes document is particularly powerful in addressing complex family or wealth situations where trust or company structures are involved. Whether they be existing structures (discretionary family trusts) or new structures created from the estate (testamentary trusts), your Statement of Wishes is the tool by which you can direct how beneficiaries are to manage the assets, for whom, what advice and counsel should be sought and how that management is to be governed and assessed. These expressions can cascade down to be quite specific, such as who is to receive (or not receive) income and/or capital, what quantum of distribution you view as appropriate, age restrictions that should apply to distributions and whether any funds can be loaned to beneficiaries.

They are your directions, in your words, that capture the essence of all that is important to you.

Retrospective regrets are best avoided with peace of mind plans, and one of the best gifts you can provide the controllers of your estate is a clear road-map. Without such guidance, they will be left to presuppose your intentions and make these decisions which may not ultimately align with your sentiments and expectations. Better to ‘lead the horse to water’ than let them stray.

Family wealth planning and its transmission is host to an interplay of generations, intentions and personal goals. We understand that managing these complex and intertwined dynamics takes a unique combination of empathy and experience. Working together, we can advise on the orderly transfer of multigenerational wealth and estate planning frameworks.

For more information on our approach to Estate Planning or any other inquiries, please contact us on +613 9655 5000.