The Backup Plan

We've all heard that there are 3 certainties in life: birth, death and taxes.

For most of us death is taboo and inevitably we fail to plan for the family we leave behind. Sadly even when my clients in the past have been told they have a terminal illness they seem to have a greater faith from the man above rather than planning for one’s death.

As my parents age the conversation around estate planning has become gradually more intense. This could be due to the Eastern European idea that if you discuss death then it will happen to you! It wasn’t until I began discussing various issues that occur from the death of a loved one (for example: locked bank accounts, issues around locating a copy of the deceased’s will, and how probate functions) that they sat up and took notice of what needed to be done.

The aim of this article is to help prepare a strategy for the practical and financial issues of the death of a close family member.

Some of the immediate issues that need to be organised and considered are:

· Obtain a doctor’s certificate of cause of death

· What are the deceased wishes regarding organ donation

· Locate insurance policies work out do they have funeral cover and if they don’t who will finance the death.

· Access bank accounts

· Engaging a funeral director

Needing to cover the above and more at a time can be difficult in the grieving process, particularly when you are emotionally exhausted and upset. As a parent I would certainly would want to reduce the burden on my children and mitigate any flow on of emotional turmoil. With all of this in mind I really do recommend preparing an estate plan with a lawyer. There are costs involved the costs may be higher but getting it right the first time to minimise and lowering the risk of any family feud conflict is important.

What can happen if you fail to prepare for the unexpected

When the death of a partner occurs it brings emotional and financial complications. Pension payments can suddenly be reduced, bank accounts can be frozen or at worst, the loss of the sole bread winner. Even with all the progress we have made in society it is common to see one person in the relationship administering the finances and the other content with tapping the card at every transaction. If you are the person tapping away then I hope you get something out of this.

Standard documentation

In order to form your estate plan, you must be mentally coherent and over 18 in order to have the legal documents prepared.

Other standard documents include:

Will

· Superannuation death nomination

· Testamentary trust

· Powers of attorney

· Power of guardianship

· Statement of wishes

Protecting the ones you love

A will that has been properly prepared will ensure tax payable is minimised on the income earned from the assets and any capital gains from their sale. It will also ensure the correct amount of ownership and control of your assets is passed to your intended person (Beneficiary). It will also ensure that assets are protected if a nominated beneficiary is involved in legal difficulties such as divorce, bankruptcy or any other unanticipated problems.

Create a plan today

Considering this, (and if you haven’t already) it’s important to make time with the significant others in your life to discuss what your wishes are, and implement a strategy to create an estate plan to formalise it.

Reference – Planning Plan B (Kylie Parker)