Estate planning, the process of organising how you want your investment and assets transferred when you die is something that many of us, understandably, avoid talking or doing anything about.
Currently around half of all Australians die without a will, some of them leaving their families to deal with grief and a complicated legal process. If this happens, assets will be divided up among the beneficiaries according to the law of the state you live in rather than in accord with your personal wishes. So if you want to leave the right kind of legacy, consider these things.
- Transferring your investments
- Decide on who your beneficiaries will be.
- Look at how much money is required to cover the needs of beneficiaries such as children.
- Nominate an enduring power of attorney, someone who can take control of your finances if you are incapacitated. If you have young children, you also need to appoint a guardian who can take care of them if they are left alone.
Once you’re confident you’ve set up the legal side of your estate, make sure you keep an eye on the financial side of things. Take a regular look at your investment strategy to ensure you maximise the value you get from it, now and in the future. And don’t be afraid to change it if you think your needs are changing.Talk to your financial adviser about how to enact your plan before consulting a solicitor to help with legal aspects. The Financial Planning Association (FPA) website has a section called ‘Find an Adviser’, where you can search for an adviser in your postcode area.You can also download a booklet called Getting Advice, which provides useful information and a checklist of questions you can ask your potential adviser. Visit the www.fpa.asn.au website or call 1800 337 301.
Consulting the relevant Public Trustee or a solicitor should ease the legal load and help eliminate any problems you may anticipate.Both can help you to make sure your Will is correctly drawn up, with the right signatures and witnesses. They will also store the Will for you and give advice on choosing an executor.If your wishes are clearly and legally spelled out, they will be hard to contest – although this can still happen if someone feels they should have been provided for and weren’t.Disputes over Wills can take a long time to resolve, but many law firms take the cases on a ‘no win, no charge’ basis. Either way, it will be an ordeal your family won’t want to go through, and another reason to make sure your Will is watertight.
An insurance policy can give you the peace of mind that your financial plan will be protected. Life insurance policies can allow you to directly nominate who should receive the proceeds of the policy if you die.For more about insurance.
Once you’ve nominated beneficiaries and set up your estate, you can still alter it if circumstances change – such as a marriage or divorce, the arrival of children or grandchildren. Minor changes can be made using a codicil (a document signed by two witnesses) but if the changes are major, having a new will drawn up will make things clearer.
Your executor must be someone you trust completely as they will be responsible for putting your wishes into action, plus collecting all your assets and paying taxes, debts and other expenses. They can be your partner, a friend, a relative or your solicitor but make sure they are comfortable taking on the job.
Which three of these must happen to make your Will valid?
- It must be drawn up in writing
- It has to be signed by you
- A Justice of the Peace must be in the room
- Two people must be present when you sign to witness you doing so
- The Executor must be one of the witnesses
(Answer: 1, 2 and 4 must all occur for your Will to be legally binding)
Each Australian state and territory has a Public Trustee to help people formulate Wills and make them legal.
It’s important to make sure you get guidance, as your will is a binding and very exact legal document. In NSW, the Public Trustee cautions against do-it-yourself Will kits for that very reason.
To start, have a look online at the Public Trustee for your state:
- NSW – www.tag.nsw.gov.au
- Victoria – www.statetrustees.com.au
- Queensland – www.pt.qld.gov.au
- Western Australia – www.dotag.wa.gov.au
- South Australia – www.publictrustee.sa.gov.au
- Tasmania – www.publictrustee.tas.gov.au/index.php
- ACT – www.publictrustee.act.gov.au
- Northern Territory – www.nt.gov.au/justice/pubtrust
These sites will help you understand what you need to start planning for your Will.
This post was first published on The Wealth Generation website.