Building a real estate portfolio takes years of hard work and sacrifice. But have you considered what will happen to your assets when you're no longer here?
Who would inherit your portfolio? Would you like to pass it on in equal shares?
A well-crafted will is not just a document for the wealthy or elderly. It's a crucial tool for anyone with assets, particularly property investors.
Protect your legacy
Many Australians underestimate the importance of having an up-to-date will, particularly those with significant property investments.
Your will ensures that the fruits of your hard work and smart investments are distributed according to your wishes.
Without a valid will, your estate — including your property investments — will be distributed according to state intestacy laws. Suffice to say, this may not align with your intentions and could lead to unintended consequences for your beneficiaries.
Reduce disputes and taxes
A clear, legally-binding will can help prevent family disputes over your assets.
There have been countless cases where lack of clear instructions in a will has led to costly and emotionally draining legal battles.
This is particularly relevant for property investors, as real estate often represents a significant portion of one's wealth.
A well-structured will can significantly reduce potential tax implications for your beneficiaries. With proper planning, you can ensure that your properties are transferred in the most tax-efficient manner possible.
Continuity of property management
If you have an extensive property portfolio, a will can provide instructions on how these investments should be managed after your passing.
You can appoint a trusted executor or set up a testamentary trust to ensure your properties continue to be managed effectively," explains Kaplan.
This can be crucial if you want your investments to continue generating income for your beneficiaries.
For investors with beneficiaries who are not versed in property management, this alone can help keep everything running smoothly.
Address complex scenarios
Property investors often face unique estate planning challenges. Say you own one or more properties with multiple investors or have made property investments through complex structures like trusts or privately owned companies, your will needs to address these scenarios specifically.
It's important to work with professionals who understand both estate planning and property investment.
Your will should clearly outline how your share in these investments should be handled.
Regular reviews are key
The property market is dynamic, and your portfolio is likely to change over time. But things in your life are also liable to change, marital status being an obvious variable over time. As such, it's crucial to review and update your will on a regular basis for accuracy.
Review your will every few years, or whenever there's a significant change in your life or property portfolio.
This ensures your will always reflects your current situation and wishes.
As a property investor, your will is much more than just a document. It's a crucial part of your overall investment strategy, ensuring that what you've built continues to benefit those you care about, even when you're no longer here to manage it yourself.
Don't leave the fate of your hard-earned investments to chance.
A well-crafted will gives you control over your legacy and peace of mind for the future.
For more information on creating or updating your will, visit www.willed.com.au.
Photo by Melinda Gimpel on Unsplash
