It has been estimated that about half of all Australians die without a valid Will.
Most people cite lack of time, inadequate assets, or the fact that it is emotionally difficult to make a Will and plan their estate. The real reason very few of us like to think about death is that we fool ourselves into thinking death is always a long way off.
Unfortunately, it is not so, and the impact on family can be devastating.
Getting your testamentary affairs in order does not need to be hard or costly – a basic Will, Enduring Power of Attorney, and a check of super arrangements, is relatively straightforward.
Here are the 5 components of a good estate plan:
- A Will. A Will is the legal document that appoints someone to deal with your assets (executor) and to distribute them in accordance with your wishes, to your chosen beneficiaries. It can also nominate someone to act as guardian for your underage children.
- A Testamentary Trust. This is a more expensive Will and while this is not necessary for everyone, trusts can be included in your Will and provide powerful tax advantages and protection for your chosen beneficiaries.
- Enduring Power of Attorney. Like a Will, this is an essential legal document for everybody. It provides the authority for your appointed person to make financial and sometimes medical and lifestyle decisions on your behalf if you are alive, but have lost the ability to make decisions for yourself.
- Superannuation Death Benefit Nomination. Superannuation stands outside your own assets and is not normally covered by a Will. Superannuation (like trust assets) needs to be dealt with separately. For most people, you are able to instruct your superannuation trustees specifically what you require to be done with death benefits. All that is required is a death benefit nomination form and those forms are normally provided with your superannuation fund documentation, but if not, we have them.
- A Letter of Wishes. This is a simple form which can enable you to pass on relevant information (to the chosen executor of your Will). For example, you can provide details of the whereabouts of investments, bank accounts, account numbers, passwords, and the like. A Letter of Wishes is a non-binding (and non-legal) document, useful to flesh out the bare bones of your Will, and something which can be updated from time to time as things change (e.g. including your wishes as to burial, cremation, etc.).
A basic estate plan requires that everybody has a Will and an Enduring Power of Attorney. In addition, having regard to the growth of superannuation as an important asset in most people’s lives, a Death Benefit Nomination check is also important.
As a legal firm which has practiced in Queensland since the last decade of the 19th century, Nicholsons knows the importance of an appropriate estate plan for all clients.
We will address the more sophisticated concepts of an estate plan in a future article.