To help start the conversation with your family I have prepared a list of seven estate planning ‘must-haves’:
1.Have a current Will
A properly prepared will is one of the crucial elements of estate planning. Your will should not only state how your assets are to be divided, it should also nominate an individual (the executor) who will be responsible for carrying out your wishes. When preparing a will it is important that you make adequate provision for dependents, and document the reasons for their decisions to help minimise the risk of the will being contested.
2.Consider a Living Will
While most people are familiar with the purpose of a will, the concept of a Living Will is less widely known or understood. Sometimes called an Advanced Care Directive (ACD), it details your wishes in relation to your medical treatment decisions in the case of serious illness or accident. Such wishes might include that individual’s attitude toward:
– resuscitation if your heart stops beating
– life-extending treatments such as artificial breathing and feeding
– being able to die in your own home (where practicable).
A Living Will (which can work in tandem with a Power of Attorney) can be shared with your family or carer, as well as health professionals, and removes the burden of making tough decisions from caregivers. It can also be included in the new Personally Controlled Electronic Health Record (PCEHR), which can be accessed by healthcare professionals around Australia.
3.Establish a Power of Attorney
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. Powers of Attorney can be as wide ranging or as limited as required. In tandem with a Living Will, you should typically put in place a Medical Power of Attorney, granting a specific individual the power to ensure the directives expressed in the Living Will are followed.
4.Appoint a guardian for children
If you have young children, it is important you appoint a guardian to care for them. In doing so, they 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 every three years
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 in so doing, be excluded from any claims against an estate. And make sure it is current. Binding nominations last for three years after which they must be renewed to remain valid.
6.Set up a Testamentary Trust
These are generally set up to protect assets in situations where the beneficiaries are minors or have diminished mental capabilities.
7.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 the 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 have intended.
Of course, with such an important process, there is a lot to cover – but you don’t have to go it alone.
Email or Call Me……to tap into the power of estate planning as a methodology, to better understand ultimately tailored estate planning advice.
Christmas Blessings to All and thank you for your support during 2015.