While there’s many occasions where kids will turn to their parents for advice, every now and again, the gems of wisdom can flow the other way. This is one of those occasions where you need to send them a link to “a very interesting article on the Starts at 60 website”
Financial planners are all too familiar with someone that dies unprepared, leaving a “dog’s breakfast” to be sorted out.
Identifying assets, debts and getting basic information about someone’s finances can sometimes take months. This delays the distribution of the estate to the deceased’s loved ones.
Starts At 60 has compiled a list of some of the most important things that need to be in place, just in case.
With much of our lives now embedded in the digital universe, critical information can be locked away in cyberspace, inaccessible because no one can guess Dad’s password.
It’s a “no-brainer” but if you’ve saved passwords on the computer, most internet browsers will allow you to export the websites and associated passwords. From there, you can dump them on a thumb-drive or at least, print them out to be stored with other critical documents. In any event, make sure they’re easily accessible.
The second no-brainer is that everyone over the age of 18 should complete a valid will and an enduring power of attorney. While a simple DIY will kit is easy and cheap, they’re really designed for very simple estates. in this day and age, it’s unusual to find a “simple estate”.
Most people will own investment structures like Superannuation or Family trusts and may have to consider complex relationships. That might involve Mum or Dad themselves or amongst the kids. New partners, rocky relationships or family feuds all tick-the-box for “not a simple estate”.
Regard the money spent on a competent solicitor to prepare a Will as an investment in a type of insurance policy. A well drafted will deals with the complexities of life and in some cases, can pre-empt challenges and other expensive legal manoeuvres that some might try.
Enduring Powers of Attorney allow someone to act on your behalf if you become incapacitated. These instruments are extremely powerful and sadly, also the tool most used by those abusing elders. EPA’s can be used to open and close bank accounts, sell real-estate and make changes to super. Having two people acting on their behalf, can provide a level of protection against abuse.
Depending on which state you live in, Enduring Powers of Guardianship and sometimes, Advanced Health Directives are both important lifestyle-type documents. These legal instruments provide instructions on how you want to be looked after and who can make those decisions if you’re unable to.
Blank EPA, EPG and AHD “kits” can be usually be downloaded for free from your state’s Ministry of Justice website. Of course, the competent solicitor drafting your will can also assist.
Next, ensure that the details of all your investments are in one place and clearly marked as such.
It might be a simple exercise book, listing the investment details including BSB and account numbers, contact information like the website or contact person’s name and including the login details to access information online. Also include PIN numbers for phones and ATM cards.
One really important point to make here, even if you have a valid EPA in place.
At the moment of death, the authority of the EPA ends. Making any changes to any aspect of the deceased’s affairs is illegal, unless you are the executor of the estate and probate has been granted by the Supreme Court. There are a few exceptions, like accessing money to pay for funerals but beyond that, you could find yourself in big trouble.
The exercise book should be put into a clearly marked envelope along with rarely accessed documents such as title deeds, birth certificates and the password list if separate. If you’ve already planned your funeral or have special requests to include, let those who will be arranging your send-off, know the details and where to find “the book”.
Speaking from experience, start the “chuck-out-the-junk” process now and set aside those family heirlooms and other things that need to be kept.
Arguably the No.1 grizzle of kids dealing with a parent’s estate is separating the junk from the family treasures. Doing that now might prove to be the greatest gift you can give them – an estate that’s simple to administer.
Lastly, if they have super funds either in accumulation or pension phase, make sure they have completed a non-lapsing binding death benefit nomination for each fund. Unless given specific directions, Super funds can sometimes takes months to sort out who’s entitled to receive all or a portion of the death benefit payout.
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