When you’re here to supervise your worldly affairs, you can ensure your voice and current wishes are heard and heeded. But what happens when you’re no longer here? What voice will be heard? Will it be your most recent voice; an old voice from several years ago; or the voice of government legislation? Unfortunately, it’s often voice number two, or worse, three.
If your Will and other estate arrangements have not recently been reviewed, you risk your current voice not being heard. If you have overlooked making a Will altogether, the government decides how your estate is to be distributed. This reinforces the importance of keeping all of your estate arrangements current. That said, even with the best of intentions, the most up-to-date Will can be challenged. There have been countless court dramas over Wills involving claims and counter-claims. It’s important to remember people can change, form new relationships, and take advice from different sources.
While the Will remains the centrepiece of estate planning, there are additional tools you may not be aware of.
The insurance option
An insurance policy taken out by you on your own life and owned by you forms part of your estate, to be distributed in accordance with your Will, and is subject to challenge.
However, if your life insurance policy nominates someone other than you as the beneficiary, it doesn’t form part of the estate. It’s separate from the Will, and not subject to challenge. This feature can make insurance an important part of sound estate planning. If there’s any possibility your wishes may not be carried out after you’re gone, it might be useful to seek professional advice about the value of a life insurance policy.
The super solution
You may think super is included in your estate and dealt with through a Will. Not so. The trustee of your superannuation fund determines how your super is paid upon your death. You may identify a ‘preferred beneficiary’, however, the fund trustee can override this decision. If you don’t want this to occur, you should complete a Binding Death Benefit Nomination, and ensure this is kept current.
Binding Death Benefit Nominations
Superannuation legislation allows you to specifically nominate, with certainty, who will receive your super following your death. These nominations must be in writing and clearly state the names of beneficiaries and any split details between multi-beneficiaries.
Some funds offer non-lapsing binding nominations. However, many binding nominations must be renewed every three years and are only valid if you nominate a dependant. You may also nominate your estate. Binding nominations are still relevant if you have an SMSF.
To ensure it’s your voice that takes final control of what you have worked hard for, it’s important to seek professional advice, which may include consulting an estate planning specialist. If you have any questions, give us a call and we’ll be able to point you in the right direction.
This article is of a general nature only and are not to be taken as recommendations as they might be unsuited to your specific circumstances. The contents herein do not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions. Your Lifespan adviser or other professional advisers should be consulted prior to acting on this information. This disclaimer is intended to exclude any liability for loss as a result of acting on the information or opinions expressed.