Making your wishes known
Written on the 2 July 2020 by Arrow
While Australia's handling of the COVID-19 pandemic was among the best in the world, the speed and spread of the illness underlined just how fragile life can be.
It was also a solemn reminder of the importance of ensuring your affairs are in order, so your wishes are met in life and death.
The centrepiece of any estate planning is your Will, which sets out who you would like to receive your assets when you die, and how they are to be distributed. But you also need to consider what will happen to your superannuation as well as who will act on your behalf if you are unable to make decisions about your finances, health or wellbeing.
Expressing your Will
Even if you have a Will, it's not a set-and-forget document. You must make sure it is up to date and reflects major changes in your life, such as marriage, divorce, the birth of a child or the purchase of a home.
Super is not part of your Will
Unless you nominate a valid beneficiary, the fund's trustees will determine who receives your super. Even if you don't have much money in super yet, chances are you have life insurance with your super which is paid out to your beneficiaries on your death.
To be valid, a beneficiary must be your LPR or a dependent, defined under super legislation as your spouse, child, someone in an interdependency relationship with you or a financial dependent. If you don't nominate anyone, or your nomination is not valid, generally the money will go to your dependants or your LPR - but it's always good to make sure.
The best way to ensure your super and any insurance payout ends up with the people you want to receive it is to make a binding death benefit nomination. There may be a small charge and you need to renew it every three years to remain valid. A non-binding nomination is only a guide so the trustees can overrule your nomination.
It is also worth remembering that if your beneficiaries are adult children, there may be tax implications for them.
An enduring power of attorney will allow you to nominate somebody to act on your behalf if you are no longer capable of conducting your own financial matters. A general power of attorney is not sufficient as it is usually for a set period and becomes invalid once you can no longer make your own decisions.
You should also organise enduring guardianship to appoint somebody to take control of any lifestyle or medical issues should you become incapacitated. And it is worthwhile introducing an advance care directive which states exactly what medical treatment you do and don't want to receive towards the end of your life.
Spread the word
Getting your affairs in order can provide great peace of mind for you and your family, now and in the future and we are here to assist.