We often don’t like to think of our mortality, but it’s a fact of life. The best way to take care of your business, family and loved ones in the event that you are no longer here is by putting in place a solid plan, writes Melisa Sloan, author of Legacy, and an Estate Planning Lawyer.
So whilst it can be a confronting thought, by taking the time to put a plan in place ensures that you can leave the legacy that you intended.
Let’s take a look at 5 things to consider when planning your estate
Set up a Will if you want control of your estate
Your Will is an important part of the estate planning process and allows you to appoint an executor who will administer and distribute your estate in accordance with the instructions contained in your Will. Additionally, it allows you to appoint a guardian, who you wish to care for and raise your minor children. Both these roles are important roles and conversely, the people you appoint to these roles should be people that you trust implicitly.
Your Will is deemed particularly significant in that it stipulates how the assets of your estate are to be distributed upon your death. It is therefore extremely important that you provide clear instructions in respect to the distribution. If you are leaving specific items to certain beneficiaries, it is prudent to definitively identify each item.
It is also important to consider how each beneficiary is to receive their inheritance, whether personally in their own name, or in a protected structure such as a Testamentary Trust.
Memorandum of Wishes
There may be additional wishes that you would like to stipulate in your estate plan that are not included in your Will. A memorandum of wishes allows you to leave definitive instructions in respect to how you would like your minor children raised or how their inheritance should be invested. Such wishes can provide your executor or your children’s guardian with invaluable guidance.
People are often surprised to hear that superannuation is separate to your Will. Your superannuation is held in trust for you by the trustee of your superannuation fund.
It is therefore imperative that you provide the trustee of your superannuation fund with a death nomination providing a direction stipulating where you would like your superannuation to be paid at the time of your death. The most common nominations are Binding Death Nominations and Non-Lapsing Binding Death Nominations.
Life insurance can be a very powerful tool in taking care of families and loved ones left behind, and as such insurance is an aspect that is increasingly becoming of value when putting an estate plan in place.
Life insurance put in place in the event of your death can be useful in providing for your family when you are no longer here. One motivating factor for many people putting life insurance in place is to cover their children’s future education costs, mortgages, debts and living costs. When looking at these liabilities and expenses it is ideal to look at them from a perspective that if you were not here tomorrow, how much insurance would you need to cover these debts and other costs?
Insurance is an integral consideration when putting your Estate Plan in place. At the very least a review of your current insurance will reinforce what you currently have in place, and such a review could be the catalyst for determining whether the level of insurance that you have is sufficient or whether additional insurance is required.
Power of Attorney
Putting in place Power of Attorney documents allows you to appoint someone to make financial, legal, guardianship and medical decisions on your behalf if you become incapacitated and could no longer make your own decisions.
If you do not have Power of Attorney documents in place, someone would need to make application to the relevant state authority to be appointed your guardian and administrator. The person appointed may not be the person who you would have chosen to make these important decisions on your behalf. It is therefore imperative that Power of Attorneys are an integral part of your estate plan.
By putting your estate plan in place you will be leaving a beautiful legacy for your family and loved ones, and it will also give you comforting peace of mind to know that all is in place.
Talk to us if you’d like more information about Estate Planning. Call us on 03 9725 9078.
Source: Flying Solo September 2021
This article by Melisa Sloan is reproduced with the permission of Flying Solo – Australia’s micro business community.