My plan for life after death (wills & estates 1/3)
Have you ever thought about what happens when you die?
No, I don’t mean whether there’s life after death and if there is, where you might be going… I mean, what happens to everything you leave behind?
Who is in charge of things?
How do they know what ‘assets’ you have?
What happens to your superannuation and other investments?
How do they figure out who gets what (if you have no will)?
What can go ‘wrong’ even if you have a will?
What is the reason for having a will?
A+ if you know the answers. It probably means you have an estate plan including a Will, Power of Attorney documents and a Binding Death Nomination Form. Don’t worry if you don’t - you’re not alone - you join the majority of Australians who don’t have their essential estate planning documents in order and are having a best guess approach to their legacy for loved ones.
That was me! One of the many.
I guess getting a will was like the next step of ‘adulting’ that I just hadn’t really thought about. But, when I caught up with Brooke Reardon and she posed these questions, I realised it was something I should probably get sorted asap. You should too.
Brooke is the founder of the law firm Wills & Estates, a national firm serving Australian adults in Wills & Estates. She's a total legend and she has been a huge help in getting my life (‘after life’) plan sorted.
Here’s what we went through:
Who is in charge?
Obviously me, even though I won’t be around. In your Will you nominate a person to gather all of the relevant documents and information in relation to your life, undertake the State based appropriate court procedures, notify the appropriate organisations and people and finalise the distribution of your estate. They are called an Executor and it’s a really big job finalising someone’s legacy. You can make it easier for them by being prepared all the time, because the reality is time and tide wait for none.
Be kind. Be organised.
How do they know what assets you have?
Your lawyer and accountant should have a record from their meetings with you, however, as an individual's situations are fluid and frequently changing, keeping a running record of your own would be advisable.
As your accountant, I know most of you do not have an asset register. Let’s chat about that. It can be something we store in the Google drive - you can update it throughout the year and we can review it at tax time with you.
What happens to your superannuation and insurance?
Let’s hope you (and/or your employers) have been making contributions so by the time you pass away there’s a healthy balance here.
If you have a Will then it is distributed in accordance with your Will, but only if you have nominated your Estate as the beneficiary in a Binding Death Nomination (BDN).
ALERT: Your superannuation and insurance does not automatically form part of your estate without that document. If you don’t have a BDN then it is distributed in accordance to the Superannuation rules. Not ideal.
How do they figure out who gets what if you have no will?
This is called dying intestate and it’s going to be covered in a separate blog. Basically, if you die intestate, your legacy is divided in accordance with your state's intestacy rules.
I am in SA and have no idea how SA law divides it. At the date of writing, this area of law is currently under review.
What can go ‘wrong’ even if you have a will?
Brooke warns me that even if we have a Will, it might not go quite as we’d planned. Here’s a short list of things that could go wrong:
Client’s haven’t discussed with their lawyer people they want to exclude from their Will and why, which can help in any future family maintenance claim;
Not properly signed or witnessed;
Failed to keep Will updated when their situation changed;
Have gone with the cheapest Will and not sought expert legal advice;
Not having conversations with their loved ones about their estate plan.
Communication and legal documents are key my friends. Get yourself a Brooke on your side!
What is the reason for having a Will?
There are so many reasons! Check out our other blogs in this series - you don’t need information overload or too much of a guilt trip all in the first article!
The one that stuck out for me? Peace of mind. With the right things in place now, I know that when my time comes, I will have documents and people who know the answers to those original questions we posed, and my loved ones can get on with planning my party (I mean, funeral).
I encourage you to reach out to me re creating an asset register and getting in touch with a lawyer asap. Brooke's details are below. Then check out the second blog in this series.
Reference: 'My plan for life after death', The Real Thiel, 17th of June 2020