“Estate Planning – I really should do something about it.” ……
Sound familiar? For many of us, we know we should do it, but find reasons for putting it off: too busy, too young, too little in assets to worry about, too complicated, too expensive.
Rest assured, if you don’t have a plan in place, the state will put one in place for you.
This is known as dying ‘intestate’, and can result in a complicated, time consuming and expensive process. And you won’t have a say over where your belongings end up.
This may no longer trouble you after you’re gone, but it will most certainly create a burden for those left behind.
Effective estate planning goes beyond having a Will.
Studies suggest that more than 4 in 10 Australians don’t have a Will in place. Are you one of them? Or perhaps you have a Will and think that you’ve ticked the estate planning box.
Well think again, because estate planning goes far beyond simply having a Will.
Not all assets form part of the Will
For starters, some assets don’t form part of a deceased estate, and cannot be dealt with under the terms of a Will. For example, in the case of jointly owned assets, ownership passes automatically to the other joint owner.
Life insurance passes to the named beneficiary (usually a husband or wife). Your superannuation benefit may or may not be paid into your estate after your death – it depends on a number of factors.
Not all estate planning considerations are financial
Effective estate planning is much more than deciding how to distribute your assets or putting in place the relevant legal instruments.
The more complete your planning, the easier your estate administrator’s task will be, and the greater peace of mind for you.
As part of your estate planning, you will need to consider:
Powers of attorney : Who, and under what circumstances, would you like to entrust another person to make decisions on your behalf?
Dependent children : Have you made clear your wishes in terms of the care of your children if both parents were to die?
These wishes may change over time. For example, guardianship decisions for very young children may be different to wishes when they are of high school age.
Advance care directive : Does your family understand your wishes regarding future medical treatment in the event that you lose capacity to make these decisions for yourself?
Without a binding death benefit nomination in place, the superannuation fund trustee has the discretion to pay the benefits to any of your superannuation dependents instead of the estate (and, therefore, rather than according to your Will).
Finding assets and documents : Does your family or the executor of your Will know what assets you hold – think property, shares, superannuation and cash – and where to find important information in relation to those assets?
Tidying up affairs : This is a huge aspect of estate administration and covers everything from closing bank accounts, paying outstanding taxes, cancelling credit cards, cancelling insurance, closing social media accounts and everything in between.
Once, the person administering your estate could go through your files and mail to figure things out. Nowadays, we need to think beyond hard copy documents.
Have you considered sharing your online login and password details with a trusted friend or family member? Is there at least one person who can access your e-mail?
Estate planning is for everyone, regardless of age or wealth. Each of us has an estate, be it large or modest – and none of us can take those belongings with us when we die.
Circumstances change and life changes us, so good estate planning needs to be an ongoing process, not a one-off event.
Peace of mind for you, and your loved ones
Call McEwen Investment Services on 1300 623 936 to start the conversation around effective estate planning.