Research has revealed that not only have Australians not put time or effort into estate planning, but half of them don’t even have a basic will. That means that if they should die before putting one in place, their assets may not go to the people they were hoping for, and dependents may not end up with those who can care for them the best.
If the fear of not having control over who gets your possessions has spurred you to take action, you might be wondering what you need to do next. For the most comprehensive plan for your loved ones to follow once you pass, ensure your estate plan incorporates the following:
A will is a legal document that outlines how your assets should be distributed when you die. Typically, there are instructions for your loved ones to follow and even some lifestyle requests, such as scattering your ashes somewhere lovely.
When putting your will together, you must have at least one executor to ensure your wishes are followed. This document must also be witnessed.
Superannuation Death Benefit Nominations
The sad reality is that many people will pass away before they get a chance to claim their superannuation. Typically, this is not something many people consider, so it’s often not mentioned in a will.
However, it’s worth putting in a superannuation death benefit nomination to ensure your super fund trustee doesn’t have to choose who gets your money. Typically, they follow the Superannuation Industry (Supervision) Act 1993, which outlines that your super can be paid to your spouse or de factor partner, your child, or someone you were in an interdependent relationship with.
If you have someone particular in mind to receive this money, make it known. You have the option of making a binding or non-binding nomination.
If you have a life insurance policy that will pay out upon your death, make sure you include information relating to it in your estate plan. This information can consist of policies you have and who will benefit from them should you pass.
A testamentary trust is a trust that only takes effect once you die. Assets within this trust are overseen by the trustee you nominated, and they will distribute them to the beneficiaries you specified.
While you can gift assets through your will, testamentary trusts come with extra benefits. There is the potential to benefit from lower tax rates, and they may protect assets from people who aren’t entitled to them trying to claim them.
Powers of Attorney
Power(s) of attorney are legal documents that allow you to appoint someone or a company to act on your behalf in some situations.
You can have a general power of attorney who can manage your affairs on your behalf when you have the mental capacity to make decisions for yourself. However, if you lose that mental capacity, their rights are terminated, and you have an enduring power of attorney.
An enduring power of attorney can look after your estate in the event of a mental illness or unforeseen health event, such as a stroke or dementia.
If you want to make sure that everyone is well taken care of in the event of your death, estate planning can be crucial. Now might be the right time to look at planning wills and making sure all the boxes are ticked.