Do you have a valid will?

Creating a valid will is one of the most important things you can do to protect your loved ones.

Here we explain how to go about it.

1. Seek legal advice

While DIY will kits can seem like an easy and inexpensive way to make a will, they can be fraught with pitfalls.

Your affairs are probably more complex than you think – your family home, other properties, business assets, superannuation, investments and personal belongings.  You may be surprised to learn that not all assets are covered as standard in a Will and stay outside of your estate.  Having a properly drawn up will helps to determine who gets what and can save your family time and stress when you are gone.  And not all assets are automatically included in your estate and may need separate provision made to ensure their distribution.

Your lawyer or financial planner will also be able to provide insights into how to best structure your will, both to protect assets and to minimise tax. Examples include setting up a testamentary trust to provide for minors or protecting your estate from creditors.

2. Safeguard your children’s future

Probably one of the most important reasons to make a will is to ensure any dependent children are well cared for should the worst happen.

Sydney wills, probate and estate specialist, Graeme Heckenburg of Heckenberg Lawyers, says generally parents should make separate rather than joint wills, as they are likely to die at different times.

Heckenburg says a will should also appoint a guardian to take care of the day to day living and housing arrangements for the children and a trustee to execute the will and make any financial decisions. This can be one person or two different people.

“If you don’t appoint a guardian and there are young children, ultimately the decision will be made by the Guardianship Tribunal [in NSW]. If the guardianship is contested, the matter could even end up in the Supreme Court,” he says.

If you have adult children, you also need to consider their circumstances.  If they’re caught up in a divorce or bankruptcy issues, any inheritance can form part of their assets, which may not be what you wish.

Vulnerable adult children also need to be considered as receiving a large lump sum may not be in their best interests either.

3. Keep your will updated

Once you have made a will, don’t leave it in a drawer gathering dust.

Circumstances change over time, and often quickly, so ensure your will reflects your current situation, particularly if your spouse has died, you have married, re-married or divorced or you have become a parent or step-parent.

We’d love to help or put in touch with our legal experts who can assist with your estate planning.

Running a Small Business? Make sure you are properly insured

Running a small business is hard work. The last thing you need is to lose it all because of poor insurance choices.

Do your homework

First you need to work out what needs to be covered. There are the obvious things such as plant and equipment, the less obvious things such as public liability, professional indemnity, and finally protecting the financial performance and position of the business on the sudden loss of a key person.

Policies should cover a wide range of eventualities and each business should have a policy package specifically geared to its needs.

People are the most important assets, and the success of the business may hinge on key personnel.

Business expense insurance can cover certain fixed business expenses, and key-person insurance can protect the financial performance in the event of a key person or business owner dies, is permanently disabled or suffers a traumatic event.

Insufficient coverage

Owners risk losing control of their companies, serious financial losses, and complex partnership problems by being uninsured, or underinsuring against something going wrong.

Having the wrong kind of insurance is equally risky and ultimately a waste of money, which is why it’s necessary to seek advice on the right insurance for your business.

It’s also important to regularly review and update your insurance, especially when your business grows or changes.

There is always tax

You do not have to pay capital gains tax (GST) on a business insurance settlement, provided you tell the insurer before making the claim what proportion of the premium you can claim GST credits for, which will be the part that relates to business purposes.

But remember, your accountant should assess all taxation matters.

Working together with your financial adviser to determine what insurances can be put in place is an important consideration when running a business.

The Insurance Council of Australia, http://www.understandinsurance.com.au, and the Australian Taxation Office, www.ato.gov.au, have more information.