Helping you ensure financial and personal security

Estate planning can be a daunting task, and one that many people put off. Whether you're a new parent navigating the challenges of parenthood or a recent retiree planning for your next stage of life, estate planning is crucial. It's a pivotal step to safeguard the financial and personal well-being of your loved ones in the wake of your departure.

Estate planning can include drafting your will to reviewing your life insurance policy and designating beneficiaries for your superannuation. Seeking professional financial or legal advice in these areas can save time, money and stress down the road. 

Here's a step-by-step guide covering the most important estate planning considerations.

Create a Will

The cornerstone of estate planning, a will, serves as the compass for the distribution of your assets. Any individual over 18, deemed of sound mind, can draft a will. This document not only outlines the allocation of assets but also designates guardians for dependents and articulates specific funeral arrangements. Validation requires a physical, signed document witnessed by two individuals.

Different government bodies oversee estate planning across Australian states and territories, ensuring the execution of your wishes. Options for will preparation range from seeking assistance from the Public Trustee (sometimes free for pensioners) or a family lawyer to opting for self-preparation or using cost-effective will kits offered by various entities. 

Nominate Will Beneficiaries and Executors

Beneficiaries, individuals or groups inheriting your assets, are nominated in your will, specifying the items or benefits they receive.

Guardians for children or dependents should also be outlined, requiring prior discussion and inclusion in the will. Executors, steering the estate ship after your passing, play a pivotal role, necessitating trustworthiness and independence from potential disputes.

Applying for a grant of probate from the supreme court is the executor's responsibility, incurring fees based on the estate size.

Draw Up a List of Estate Assets

A comprehensive list detailing all assets slated for distribution as part of your estate complements your will. This catalogue encompasses individual property, valuables, cash, debts, business assets, shares, and intangible items.

Notably, superannuation funds and life insurance policies require separate nomination of beneficiaries, detaching them from the will's jurisdiction.

Nominate Power of Attorney

While not a will prerequisite, nominating a power of attorney empowers trusted individuals to manage financial and legal decisions on your behalf during your lifetime. The 'enduring power of attorney' extends decision-making capabilities beyond instances of incapacity.

Draw Up a Medical or Health Care Directive

Also known as an advanced care directive or living will, this document articulates your preferences on medical, health, and lifestyle choices. It aids decision-making for loved ones if you become incapacitated, ensuring alignment with your wishes.

Consider a Testamentary Trust

A testamentary trust, an integral part of the will, establishes a trust administered by an appointed trustee to control asset distribution to beneficiaries. This structure proves beneficial for asset protection, complex family dynamics, safeguarding vulnerable beneficiaries, and minimising tax liabilities.

Taking Out Life Insurance

Life insurance, a vital facet of estate planning, goes beyond addressing living costs or disability concerns. Life cover, providing a payout to nominated beneficiaries upon your demise, necessitates separate consideration from the will. The lump-sum payment, distinct from the estate, requires individual beneficiary selection.

Who Needs Life Insurance?

Life insurance becomes essential for individuals shouldering financial responsibilities for family, divorced caregivers paying child support, primary caregivers, business owners, or those seeking to cover death-related costs.

The decision hinges on individual circumstances, and policy considerations vary between standalone and superannuation-provided life insurance.

Life Insurance Through Super vs. Standalone Policies

Superannuation accounts often include life insurance automatically, offering a cost-effective option with age-related eligibility criteria. However, standalone policies provide customization and may remain active beyond age 70.

The choice involves assessing coverage, premiums, and age limits, understanding the nuances of stepped vs. level premiums, and scrutinising policy exclusions.

Review Your Estate Details

Periodic review of estate details, recommended every three to five years or following significant life changes, ensures continued alignment with your wishes.

Updating wills, beneficiary lists, and asset documentation becomes paramount, addressing alterations in family dynamics, assets, or beneficiaries. Collaboration with a legal professional ensures document validity and adherence to evolving legal standards.

Estate Planning is Key to Financial and Personal Security

Estate planning demands meticulous consideration and regular reassessment. Hopefully the points covered here provide enough of a prompt for you to consider your own circumstances and to make suitable arrangements. 

In navigating the complexities of estate planning, you empower yourself to take charge of a secure and resilient future for you and your loved ones.

Marshall Thurlow is the Director and Founder of Orion Marketing Pty Ltd. He is a digital marketer with expertise in SEO, website design, content marketing and project management. With over 15 years of experience spanning government, not-for-profit and the private sector, he is well equipped to lead teams to success.