We may not like to think about it but when it comes to death, it pays to plan ahead. The emotional impact your death can have on your family and friends is tough enough without the addition of financial stress due to ill-planning or no planning at all.
Here are 9 things to consider for ensuring your family has adequate protection and your estate is properly distributed and managed.
- Will – When most people think about Estate Planning arrangements, they just think about their Will. Structuring a Will can have implications on relationships and the financial circumstances of your beneficiaries and can even cause friction amongst surviving family members. Quality estate planning advice can help you to structure the distribution of your assets in a fair and equitable way.
- Executor – An important part of creating a Will is the appointment of the Executor of your Will. This person will be responsible for carrying out your wishes as documented in your Will and is given many responsibilities and duties. Many people decide to appoint a family member as Executor however sometimes it’s better to appoint someone who is removed from the emotional grief. Alternatively, you could consider nominating a professional adviser, business associate or trusted friend.
- Statement of Wishes – A statement of wishes isn’t compulsory but can be helpful as it outlines why you have structured your Will in a particular way. It’s also an opportunity for you to outline your preferred funeral arrangements. This alone can be beneficial in providing your family with guidance on your wishes, helping to ease the burden on them at this time. Often you can update your Statement of Wishes without the need to update your Will.
- Medical Power of Attorney / Enduring Guardianship – Appointment as a Medical Power of Attorney is a big responsibility for the person that you nominate as they will need to make medical decisions for you in the event that you are unable to make them yourself. Once appointed, you need to discuss with the Attorney your wishes in the event of various medical situations. You should also tell your family of your appointed Attorney.
- Financial Power of Attorney – Appointing a Financial Power of Attorney will provide someone with the ability to take control of your financial situation in the event of your incapacity. They can arrange to pay bills or make other financial decisions on your behalf. The person t needs to be trustworthy and should be familiar with your personal financial situation.
- Insurances – There are a range of insurances that can help lessen the financial impact of your death on your family and loved ones. A Life Insurance Policy can at least provide the family with a way to extinguish debts and reduce stress if you have ongoing financial commitments. Other insurances like Trauma Insurance and Total and Permanent Disability Insurance (TPD) provide financial support to you and your family in the event that you are sick or injured and survive for a period of time. If you have insurances in place, you should communicate with your Executor and family, so they are aware of the policies in the event you need to claim on them.
- Funeral insurance plan – For people wishing to ensure the family has access to cash to pay for funeral expenses, a Funeral Insurance plan may be an option. Typically, these policies provide a limited sum insured (generally $5,000 to around $20,000) payable within 24 hours of receiving a claim form notifying of your death.
- Superannuation – Not every asset you own will form part of your will. One such asset is your superannuation. Ensuring the proceeds of your superannuation go to the right person/s on your death is a relatively simple, yet often overlooked process. Arrangements such as a binding or discretionary beneficiary nomination for your superannuation can ensure your superannuation is paid out as per your wishes.
- Business Arrangements and Succession Planning – If you run a business, then it’s important to have a plan outlining what you would like to happen in the business in the event of your accident, illness or death. Documents such as a buy/sell agreement, which are often funded by an insurance policy, can help provide protection to your family and remaining business owner/s.
Given its complexity, it pays to seek professional advice in clarifying and implementing your estate plan and when appropriate assisting your family to manage your affairs. Click here to make a time to meet with one of our expert advisers.