Updated: Aug 5, 2019
Sometimes, estate planning is a difficult subject for families to discuss – nobody likes to think about the unthinkable. However death is a reality of life, and it’s important to have discussions about how you want your estate to be distributed and what arrangements are in place to care for the loved ones we leave behind.
What many people don’t realise is that estate planning isn’t just about dying, it’s also about the living. Do you have a plan in place to ensure decisions about your care can be made in line with your wishes in the event that you are incapacitated and can’t care for yourself anymore?
Here are some suggestions that may help reduce the burden on those you leave behind:
1. Prepare a will
A properly prepared will is one of the crucial elements of your estate planning. Your will should not only state how your assets are to be divided, it should also nominate an executor who will be responsible for pursuing your wishes. When preparing a will, it is important you make adequate provision for your dependents, and clearly document the reasons for your decisions to help minimise the risk of your will being contested.
2. What about a ’living will’?
Otherwise known as an Advance Health Directive, a living will is another important tool. It enables you to give detailed instructions in relation to your health care, including decisions on any treatment you wish to receive or refuse if you are incapable of communicating those instructions.
3. Establish a Power of Attorney
Whilst a will deals with your estate upon your death, Powers of Attorney are designed to deal with your affairs while you are still alive. Powers of Attorney enable you to appoint an individual to deal with your affairs if you become incapable of making your own decisions. They can be as wide-ranging or as limited as you require or desire.
4. Appoint a guardian for children
If you have young children, appoint a guardian to care for them. In doing so, you can provide that guardian with guidance about your child’s upbringing, and make provisions for your children’s financial future using the most tax-effective means available.
5. Make binding death nominations
It is also important that binding death benefits nominations are made on superannuation and retirement income stream products as they ensure these funds bypass an estate and are excluded from any claims against an estate.
6. Cover those assets not covered by your estate
One of the most common mistakes made in estate planning is leaving no instructions for those assets not covered by your estate, such as assets held in trusts and companies. Separate provision needs to be stipulated to ensure that control of these assets passes on to those you intended.
Other estate planning mistakes to avoid include:
Writing an informal will and not having it witnessed – or having beneficiaries as witnesses;
Not reviewing or updating your will on a regular basis;
Not telling anyone where your will is located.
This list covers important aspects to consider, however professional advice should be sought to tailor your estate plan to your individual circumstances. In conjunction with professional legal and accounting partners, CREATE & PROTECT can assist you with:
Establishing a valid Will
Setting up an Enduring Power of Attorney
Completing a Binding Death Benefit Nomination
Confirming an Advanced Healthcare Directive
Call us at 1300 707 955 or email email@example.com to get started.