No one likes to talk about death but it is a fact of life.
The problem is that by not talking about it, many people never get around to preparing for it either.
A common saying is that there are only two certainties in life – death and taxes – yet we generally prepare for our tax responsibilities much more effectively than we do for our eventual death.
The strange thing is that we work most of our lives and then seem to pay scant regard to what happens to our assets when we have departed this wondrous thing called life.
Most people don’t realise that assets in your name (estate assets) can only be passed on through your will – unless of course you are happy with the government deciding who gets what?
So it seems quite clear to me that if you want any input, then you will need a will.
Who can prepare your will?
Unfortunately, too many people think that a $30″‘will-kit” will suffice when it comes to the division of your assets post-mortem, but it usually does not.
In today’s society we have a large proportion of blended families, which makes the preparation of a will more complex – especially if both parties have children from previous relationships.
That’s why it pays to use a professional to prepare your will and it’s also a good idea to prepare it at the same time as your partner to iron out any potential issues so the family’s collective wealth is retained.
Similarly, if someone has a larger asset base, the preparation of their will will be more detailed than what can generally be achieved via a DIY kit bought at the local shopping centre.
It’s imperative to use a lawyer who is an expert in the preparation of wills who can help prevent any unhelpful issues, such as legal challenges, in the future through the professional creation of this important legal document.
Don’t forget that you will also need to have your will properly witnessed.
Who will manage your affairs when you’re dead?
In your will you can nominate someone to carry out your wishes, which is a person called an executor.
You should choose someone who you will have a long-term relationship with, such as a brother or aunt, because choosing a friend when you’re both 20 as your executotr, may not still be appropriate when you die 60 years later.
The executor can seek professional assistance and in many cases this is advisable, particularly with tax and other issues.
Also make sure someone knows where everything is such as routine bills, bank accounts, passwords, documents and your list of assets and debts.
The executor can be the person or persons receiving all your wealth, a friend or relative or you can nominate a professional to do this who will charge the costs to your estate.
Your executor can only legally comply with your wishes as stated in the will so you need to be specific and detailed so they cannot deviate from your written instructions after you have gone.
Can anyone inherit my wealth?
The simple answer to this question is that, yes, you can hand out your wealth to anyone including family, friends and charity.
But care must be taken because your will can be challenged by anyone who is, or has been, financially interdependent with you such as spouses, children or sometimes those people who are close to you but don’t have a strong financial position themselves.
Your will can even set aside a sum of funds where the profits can be distributed over a longer period of time.
If minor children are included in your will and are allocated funds, they will need to have a guardian or legal personal representative.
In your will, you can even put clauses to limit or manage the sale of assets – particularly if you consider them to not be mature enough or subject to undue influence by a third party
One of the biggest benefits of having a legal will is that it provides certainty upon your death about what your wishes were and how you wanted your assets to be divided.
This can give your friends and family peace of mind at a sad time and also allows them to mourn you without any additional stress.
A legal will can also fast-track the release of your estate to pay outstanding or continuing bills, pay for any funeral requirements, including where and how, and can even assist with organ donations (with additional paperwork).
It’s important to realise that a quick release of your estate will assist family and friends who are beneficiaries to at least get on with their lives and it also makes the work of your executor that much easier.
Dying without a will (which is called dying intestate) will give the government the power to distribute your wealth.
This can be time consuming, costly and against your wishes as well as adding strain and anxiety to your family, which I’m sure most people don’t want.
One final point is on the guardianship of perhaps your greatest assets – your young children.
Without clear instructions on who will care for them (if both parents are deceased) the government could step in and that is not likely to be in their best interests.
But remember that anyone you nominate to look after them will need financial support for both ongoing expenses and one-off expenses such as bigger car, larger home or special care, so make sure you include these provisions in your will.
Hopefully by now, you agree that the preparation of a legal-binding will can make your final wishes clear so your loved ones can say goodbye more peacefully and you can protect the asset base that you’ve spent your whole life building.
Get the right advice…
Why not discuss your individual needs & let Ken Raiss, director of Metropole Wealth Advisory, formulate a Strategic Wealth Plan for you, your family or your business?
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The article is general information only and is intended as educational material. Metropole Wealth Advisory nor its associated or related entitles, directors, officers or employees intend this material to be advice either actual or implied. You should not act on any of the above without first seeking specific advice taking into account your circumstances and objectives.
Watch out for Part 2 of this series of 2 articles on Why You Need A Will next week