Estate planning ensures your wishes get carried out when you die. If you die unexpectedly or you lose your capacity to make decisions, it can be stressful for your family to make decisions on your behalf. Take the burden off your family and consider these helpful next steps to get you started.
What is estate planning?
While you’re alive, estate planning can include the process of organising your assets (your estate) in preparation for passing them onto your loved ones (your beneficiaries). This process could include speaking to an accountant and solicitor about how your assets are owned and taxed to protect their value, and making sure records are up to date.
Preparing a Will lets your loved ones know what’s included in your estate, and how you want your estate distributed after your death. An asset can include savings, your home, investments, car, and furniture and can even include precious jewellery or family heirlooms.
Your superannuation is not an asset that automatically forms part of your Estate and therefore may not be distributed according to your Will. A super fund trustee will follow superannuation law and use its discretion to determine who’ll receive your super. So, it’s extremely important your beneficiaries are kept up to date. We’ve explained more about how your super can assist in estate planning and how you can nominate beneficiaries further below.
The best thing you can do for your family is plan the distribution of your estate, so they’re prepared when the time comes.
Nominate a power of attorney
A power of attorney is the trusted person (or people) you nominate to make important decisions about you and your estate if you’re no longer able to do so yourself. There are different types of nominations you can make, for example, to make specific decisions like paying your bills, or other decisions like your hospital treatment.
MoneySmart has a list of the different types of power of attorney if you’d like to learn more.
Nominate an executor
An executor is the trusted person (or people) you nominate to manage your affairs after you die. If you have a Will, your executor will ensure that your assets are distributed in accordance with your wishes.
Have a Will
A Will is a legal document and it forms part, but not all, of your estate. Without a Will your assets will be distributed according to the laws of the state you live in. This means your assets may not go to who you want them to.
You can also include details of your memorial, and other important preferences or arrangements for your personal affairs including what should happen to any pets.
To nominate a power of attorney and executor and to make your Will you can either use a solicitor (for a fee) or you can use a Public Trustee. The trustee may not charge you if you’re a pensioner, aged over 60 or you nominate them to carry out the instructions in your will (an executor).
Visit the Public Trustee office in your state to find out what the rules are.
You can also use an online Will kit, but you should consider asking a solicitor or Public Trustee to check it. Otherwise it may not be done properly and could be invalid.
Make sure you include the name of your executor and enduring power of attorney in your records.
Keep your records up-to-date
Take note of each financial thing you do over the next few months and keep a record of it. Having everything in one place will be easy and less stressful for your family to manage. Here’s a simple list of things you can keep record of.
- The contact details of your accountant, lawyer, financial planner, or any other person or organisation you deal with when it comes to your assets and money.
- Bank accounts: including details for any outstanding loans or credit facilities you have.
- Investments: including your share portfolio (your share registry details such as CommSec), your managed fund holdings, your superannuation account details and titles to any properties you hold.
- Keep a record of any loans you’ve provided to others, or any assets you’ve loaned to others, and include details of how they should be collected or maintained by your loved ones.
- Insurance policies: include all your policy numbers. Make sure you’ve chosen who’ll receive the benefit as insurance is not automatically part of your will so this needs to be done separately.
- Personal documents: keep a copy or your birth certificate and marriage certificate(s), driver’s licence, passport, Medicare card and any other important information.
- Passwords: if you have a social media presence (Facebook, Twitter, email or even TikTok!) write down your passwords and that way your loved ones can shut the accounts down.
How super can help
Super doesn’t automatically form part of the Estate and therefore may not be distributed through a person’s Will. A super fund trustee will follow superannuation law and use its discretion to determine who’ll receive your super. Many super funds now give you the option to nominate a Legal Personal Representative as your beneficiary, to distribute your super in accordance with instructions left in your Will. Super is your money so you should be the one who chooses who gets it. It’s called nominating beneficiaries.
There are two ways to nominate who gets your super.
A non-binding nomination lets us know who your preferred beneficiaries are. These are taken into consideration when paying out your super but may not always be carried out if your family circumstances have changed.
You can add or update a non-binding beneficiary through Members Online.
If you’d like more certainty about who gets your super, you can make a binding nomination. This means we must pay your balance to your chosen beneficiaries as long as they are eligible. This expires every three years, so make sure you keep it up to date to ensure it remains valid. We’ll also write to you when your nomination is about to expire.
To learn more about nominating beneficiaries including who you can nominate click here.
A guide on what you can do next
Nominate a power of attorneyThis person/s makes important decisions about you and your estate if you’re no longer able to do so yourself.
Nominate an executorThis person/s will manage your affairs after you die.
Make a valid WillKeep a record of your executor and enduring power of attorney.
Keep up-to-date recordsMake organisation easy on your family by keeping current records of anything related to your finances.
Tell your family what you wantEven once you put your wishes in writing, you should still let your family know what you want. This can avoid unnecessary heartache or answer any questions they might have.
Nominate who gets your superWhether it’s a non-binding or binding nomination, let your super fund know who should get your money
Choose who gets your life insurancesIf you have insurance outside of super, you’ll also need to choose who gets any benefits that may be payable.