Retirement’s great. Well at least it looks pretty good from the outside. I hope to do it myself one day.
You’ve probably spent most of your life shouldering work and family responsibilities. You start counting down the days until you can kick back and focus on you and just enjoying yourself.
The reality of retirement though is that there are certain feelings of responsibility that will never leave you.
Over the years I’ve met many people who have spent sleepless nights worrying about what happens when they’re not around. They spend their retirement wondering how they will protect their assets and safeguard their future wishes.
Whether it’s about making sure loved ones are well looked after, or making sure not-so-loved ones have no control over assets, this level of anxiety is universal.
Yet there are some very simple things you can do to protect your estate, so you can just get on with enjoying your retirement.
Here are 5 biggest pitfalls when it comes to estate planning and how to avoid them.
- Not Having an Estate Plan or Will
Many people assume they only need to think about estate planning if they have a large fortune and significant assets.
An estate may include financial assets such as property, shares or savings but it can also include superannuation and associated life insurance as well as keepsakes that may only have sentimental value.
While estate plans consist of the documents that provide instruction for distributing your estate, they also outlines directives for handling your finances and medical care if you no longer have the capacity to do so.
So if you have assets or keepsakes you wish to be cared for or distributed after your death, you need an estate plan.
If you have loved ones you wish to provide for you need an estate plan.
If you have anyone in your care, you need an estate plan.
If you want to say how your finances and health decisions will be managed in the event you can’t make your own decisions, you need an estate plan.
Yes, some estate plans are simpler than others – they may only consist of a Will and Powers of Attorney for instance, but only a qualified professional can confirm what’s best for your situation.
- A DIY Will
Having a Will is a great start, but not every Will is equal.
Some of the most common problems with do-it-yourself Wills include the estate not being disposed of properly or uncertain terms that result in expensive Court action.
A DIY Will also often doesn’t consider or protect against claims on the estate or deal effectively with Superannuation and Family Trusts (which are not part of the Estate).
Now I often hear people say: “But my Will is really simple”.
A DIY Will kit caters for only the simplest of Wills but whose family and personal circumstances are simple these days?
Dealing with blended families, people you’d like to exclude from a Will, managing different types of assets or if you’re a business owner, requires a more complex Will and certain expertise and knowledge.
- Out-of-date Wills
It’s essential to have a high quality, legally binding Will to avoid arguments, confusion and heartache.
Having a Will is a great start but it’s equally important for it to be up-to-date.
Life and circumstances change over the years and so should your Will.
It’s a good idea to review your Will every five years or so. It may not need changing every time, but it’s a good idea to check just in case.
There are many reasons why you may need to change your Will.
Such as, if you marry, divorce, separate, have a new partner, there are new additions to the family, there are changes to your assets, you change you mind about beneficiaries or Executors or you need to update your personal information.
Changing a Will is usually relatively simple and may only require making a Codicil.
- Choosing the Wrong Person
You need to consider carefully who you an Executor and Powers of Attorney.
Many people choose the eldest child as the Executor and Power of Attorney because they think that’s what most people do.
This is fine if the eldest child is the most appropriate person. Your Executor and Powers of Attorney need to be trustworthy as well as willing and able to execute your wishes.
Sometimes the most appropriate person is a younger child, or perhaps not even one of your children.
You can put the best estate plan into place, but if you pick the wrong person to help execute it, it doesn’t matter.
You should give considerable thought to selecting your Power of Attorney and Enduring Power of Attorney especially, as your life is literally in their hands.
- Not Communicating Your Wishes
Disagreements, disputes and confusion over estates are more likely to occur when there are surprises at the time of administering an estate.
It’s critical that you openly communicate your wishes to your loved ones.
While it can be difficult to have such a conversation, it’s incredibly important that family hear from you about your estate plan and don’t receive a ‘nasty’ surprise when you’re gone.
You should speak to a qualified Wills and Estate professional who can help you avoid the potential pitfalls in estate planning.
Contact Gill & Lane Solicitors at Sandgate via GregL@gillandlane.com.au, or 3269 8111 for a free, no obligation consultation.