Marina* was only thirty when she unexpectedly passed away. The sudden shock of her death left her family naturally devastated, but also at a loss of what to do with her estate. You see, while Marina didn’t have a waterfront apartment (or any property for that matter), a stack of cash or a valuable art collection to her name, she did have a $500,000 life insurance policy through her superannuation account that was to be paid out to her beneficiaries.
But Marina didn’t have a will.
The alarming issue here is that Marina isn’t a rare case. Many Australians, especially in the younger demographic, aren’t prepared for a sudden death, leaving their estate wide open for contention and endless legal fees for their family to deal with in addition to their grief.
The importance of a living will shouldn’t be underestimated and the process is relatively simple. Here are some tips to help you get your affairs in order.
1. DIY with caution
DIY will kits are readily available, but vary greatly in the detail needed to keep your estate ironclad. If you don’t have any dependents, few assets and simple wishes, it’s definitely the most cost-effective way to go about writing your will, but be wary. One wrong move and your beneficiaries might not receive their entitlements in the most tax-effective manner, or at all.
2. Be tax savvy
You might not realise it, but when you die your estate will most likely have to pay tax on your superannuation, eroding your nest egg in one fell swoop. We recommend speaking to a financial advisor to talk through any strategies that can minimise tax while you’re still alive, as well as other factors like spousal and dependent support, binding death nominations and the establishment of a testamentary trust – none of which are addressed in the DIY options.
3. Know what’s yours
Your special china tea set and wedding rings are more often than not yours to give. But depending on how your estate is set up, some of the bigger things might not be so cut and dry. Any assets held in a company, trust or as joint tenants can’t be gifted through your estate. Instead they need to be transferred, which is a process. Also check if you have a binding death nomination on your superannuation, as this is often overlooked and will need addressing depending on your current circumstances.
4. Think ahead
The simplest way to avoid confusion in your estate is to pass your personal belongings on while you’re still alive. This avoids any questions about who gets what, while also giving you the added bonus of potential tax breaks.