Centrelink
Planning, Control and Centrelink
Centrelink's Financial Information Service (FIS) helps people to understand their financial options. This is especially so where a person needs to deal with the death of a family member whether it is unexpected or anticipated.
Why plan?
When a person is gravely injured or terminally ill, they or their loved ones need to prepare. This is often very difficult because the physical and emotional toll on the family may cause those necessary decisions to be made in a less than ideal atmosphere.
Planning can lessen this burden, as it allows the precious time they have left with their loved one to be better focused on each other and not to be unnecessarily hijacked by legal or practical processes.
Succession planning – why?
For many of us there is no need to consider succession planning at all. However, for those with assets in a family business, private trust or private company – including a farm – the need to have succession is very real.
Succession planning should be something that occurs before you are too old or too ill to continue working your property or business. It is something that you do not just hand over to your solicitor, accountant or financial planner. It is a process which you and your family members will go through to achieve all of your financial, legal and emotional needs, revisited over time. Ideally it should be part of your ongoing business plan.
The first stage is knowing the viability of your family business. The next stage is exploring each family member's needs, whether they are involved in the family business or not. Can the business provide for all or some of these needs and do these needs change over time?
The third stage is building it into the business plan.
Succession planning could include deciding:
- Whether you completely retire or reduce the hours you work;
- If you retire, when;
- The cost of providing for your retirement; and
- If you are a farmer, when you retire, whether you want to live on or off the farm.
Most families who own a family business don't avoid the issues of succession planning. Often, they just haven't got around to talking about it or doing something about it. Sadly, a few find that these decisions need to be made in haste at a time of family crisis, such as a serious illness or death. Others, who have talked about succession planning as a family and what it means for them, have found that all of the family members have benefited from these discussions.
Besides decisions about being fair to all of the family members in the various generations whether currently involved in the business or not, you will also need to include decisions that will affect you and them in the short term as well as the medium term and long term. It's NOT about giving everything to your children – it's about balance.
Estate planning – why?
Estate planning is often about the assets we wish to pass onto our loved ones, but for some it is also about the debt we do not wish to pass on.
Estate planning deals with the use an Enduring Power of Attorney, updated insurance policies and an updated Will to ensure that you and your family is adequately provided for. Some people also take the opportunity to explore the function of Testamentary Trusts, a trust set up to distribute income to your spouse, children and/or other beneficiaries while maintaining assets within the Trust.
Death is never easy for those who are left behind, so if arrangements are not made for those who you wish to be your beneficiaries, the law decides who gets what proportion of your estate.
Free unbiased information?
With both succession planning and estate planning you need to be aware of the legal consequences of your decisions including taxation and social security. To assist with that exploration process, Centrelink's Financial Information Service (FIS) hold free seminars on these topics as part of the National FIS Seminar Campaign.
The campaign has been very successful as it provides individuals with unbiased, free information about many lifestyle and financial issues. In some sites the information is presented as a series of related seminars. You can choose to go to an individual seminar or to the whole series.
Experts from other federal or state government bodies or from various industry groups often attend as seminar guest speakers. FIS Officers assist people to appreciate the role of experts and to be more confident about contacting further experts who may assist them to plan.