Most people are aware that they should prepare a will when it comes to estate planning. Although preparing a will is a crucial step, estate planning is a comprehensive process.
Below are several important things you should address when preparing a will when going through the estate planning process.
Prepare a power of attorney and enduring guardian documents
A power of attorney (POA) and enduring guardian (EG) operate while you are still alive, but if you are unable to make decisions for yourself.
A POA allows you to appoint someone to manage your financial decisions on your behalf. Typically, whoever you appoint as your attorney may:
- Pay bills;
- Purchase or sell assets;
- Manage your money and
- Access your bank accounts.
An EG allows you to appoint someone to manage your medical decisions on your behalf. Typically, whoever you appoint as your guardian may:
- Decide where you live, what kind of services you receive, and
- Sign off on medical or dental treatment.
If instructed, it is common for lawyers to prepare a POA and EG at the same time as they prepare your will. If you are incapacitated and do not have a POA or EG in place, the NSW Civil and Administrative Tribunal will need to appoint someone to manage your financial and health decisions on your behalf.
You may also wish to prepare an advance care directive that outlines your preferences for medical treatment and end-of-life care. A healthcare professional, such as your general practitioner, is normally the best person to assist you in making an advance care directive.
Check your superannuation death benefit nomination
If you would like your superannuation to pass to a specific person/s on your death, you need to nominate that person/s via your fund using a super death benefit nomination form.
You may have an existing superannuation death benefit nomination that needs updating. If you have a self-managed super fund, you will need to check the fund’s rules around death benefit payments.
Generally, there are two different types of nomination forms offered by super funds:
- A binding death benefit nomination – if valid, the trustee is bound to follow your nomination. This type of nomination tends to lapse every three years, and
- A non-binding death benefit nomination – a request to the trustee that the person/s named receive your super on your death. This type of nomination tends to be non-lapsing.
Typically, super can only be paid out to specific people on your death including your spouse and children.
Check your life insurance policy
While you are checking your superannuation, it is also a good idea to check who you have nominated to receive your life insurance payout when you pass away. Like super, life insurance is not usually covered under your will.
It is a good idea to review your super and life insurance nominations regularly, especially after major life events such as marriage or divorce.
Make a list of your assets and debts
To make things easier for the person taking care of your estate when you pass away, it is a good idea to make an itemised list of your assets and debts. This list should include your physical assets, e.g. your car, and your non-physical assets, such as your bank accounts, share portfolio, life insurance, and superannuation, as well as any debt that you have.
It is recommended that you review and update this list from time to time or as your assets and debts change.
Make a list of important information including contacts, memberships and online accounts
While making a list of your assets and debts, you should also consider preparing a list of important information, such as key contacts, any memberships you hold, or the details of your online accounts that may need to be accessed on your death.
Discuss your estate planning with your family & your executor
Involving your family and executor in the estate planning process can be a good idea so that they understand what you are leaving behind and what is expected of them. Your executor is the person who you appoint in your will to manage your estate in accordance with your wishes after you pass away and is often also a family member. You may wish to provide them with any lists that you have made or copies of your legal documents so that they do not need to search for them on your death.
If not included in your will, it is also a good idea to discuss your wishes for funeral arrangements and burial plans with your executor and family.
Review and update your estate planning
Estate planning is not a one-time task. Life changes, such as marriage, divorce, births, and deaths, can impact your estate plan. Therefore, it is important to regularly review and update your will, as well as the matters outlined in the points above, to ensure they align with your current wishes and circumstances. If you need a will prepared or help with your estate planning, the team at Eleven Legal can help; contact us today!
