We should think about the “future” – planning for the inevitable and making sure that your paperwork is in order.
It is an important consideration, although people rarely like to think about it. Everyone will die. Although you cannot change that fact, you can ensure that upon your death your wealth passes smoothly and efficiently to your loved ones.
Here are some important considerations:
Current Will—do you have a Will? If you do have a Will, is it current?
Have your circumstances changed since your Will was drafted?
Remember that marriage generally invalidates Wills and Wills may be wholly or partially ineffective due to the death of a beneficiary, or a specifically gifted asset no longer existing.
Trusts established by Wills—does your current Will set up trusts upon your death? Leaving assets on trust instead of giving them directly to a dependant can be very desirable. Trusts in Wills are often used where beneficiaries cannot manage money themselves, have addictions, are being sued, etc. Trusts in Wills can also allow tax effective planning.
Family trusts—the person who can hire and fire the trustee of a family trust has ultimate control of the trust.
Do you have this role? Who will have the role after your death?
Powers of Attorney—do you have any in place? These can be invaluable if you lose the capacity to make decisions or are overseas.
Individual trustees—do any of your trusts and/or your DIY super fund have individual trustees instead of a company acting as trustee? Companies never die and changing the directors of a company is a lot easier than changing individual trustees of a trust where someone has died.
Superannuation pensions—do you receive any superannuation pensions? Upon death, what will happen to them? Do you want your pension to continue to be paid upon your death (e.g. to your spouse)? Or, are you happy for your pensions to be paid a lump sum?
Read out next blog to find out how a power of attorney can help you!