Tag Archives: family

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.

Do you insure your biggest asset?

It’s a sad fact that most Australians are dangerously under-insured.  And It may just be high time you reviewed your levels of insurance protection!

Take the example of Matt.  He is a clean-living 53-year-old who exercises regularly, doesn’t smoke, enjoys a healthy diet and only indulges his love of good wine at the weekend.

Yet things changed suddenly for Matt last year when he awoke one night to find he couldn’t breathe. His wife called for an ambulance and he was rushed to hospital, where he was taken into life-saving surgery following a heart attack.

After waking from his operation, Matt was in shock. He knew there was a family history of heart disease, but had gone to great lengths to prevent the onset of the illness and had definitely not properly thought through how his family would cope without him.

During recovery, Matt reviewed the insurance component of his super and discovered that in the event of his death his family would receive just $300,000, which would barely pay off the mortgage. He hadn’t taken into account daily living expenses, car loans, and his daughters’ school fees, his wife’s low income or their inadequate savings.

Fortunately for Matt, his story is a positive one. Now in better health and back at work, he has spoken to a financial adviser and taken out additional life insurance, albeit at a significant premium following the heart attack. He and his adviser are looking into critical illness cover, which would pay out a lump sum should he suffer another sudden illness, although he’s likely to now have a coronary exclusion.

Unfortunately, in Australia, Matt’s story is not uncommon.  Surveys have shown Australia has much lower levels of insurance than other developed nations including the United States and United Kingdom [1]. The required level of life insurance is now about $680,000, while the typical default cover is around $258,000 – a significant gap [2].

Maybe it’s time to ask… could your family make ends meet if you were unable to work, suffered a serious illness or died? Here are some things you should consider:

  • Ongoing Mortgage or rent payments
  • Daily living expenses – food, bills, transport, utilities, insurances
  • Childcare, school and university fees, text books and accommodation
  • Other expenses – house repair costs, medical expenses, personal health & grooming, replacement of white and brown goods

Make an appointment with your financial adviser to discuss your insurance needs and ensure you are adequately covered, or call the team at Wealth Planning Partners to discuss your needs on 07 5593 0855.  They help clients Australia wide with their protection strategies.

 

[1] Lloyd’s Global Underinsurance Report 2016

[2] Rice Warner Underinsurance Research Report 2014

Taking control of your finances after divorce

The key to managing finances after a divorce is to get organised early.  Grab a cuppa and have a read through this short guide for six tips on taking control.

Divorce can be one of the most financially and emotionally stressful experiences of a person’s life. The key to taking control is to get organised early. Acting quickly to organise accounts, update details and make financial plans may help start the next phase of life with more peace of mind.

The following steps are a great place to start.

1.      Get organised

It’s important to keep track of key dates, such as when the separation occurred. It’s also a good idea to arrange a redirection of mail for the party moving out, so you continue to receive mail at the new address.

Both parties should gather all financial information, making sure there are copies of
all documents. Also write a list of all financial and property assets, liabilities and policies, making a note of whose name each document is registered under. This may include:

  • bank, brokerage or investment accounts
  • credit cards
  • vehicle registration
  • life, health, home, car, health and other insurance policies
  • utility bills for electricity, gas, internet and phone
  • property documents such as deeds, mortgage papers and home loan details
  • recent tax returns and tax file numbers
  • superannuation account details
  • will and estate plans
  • rental agreements or leases.

    2.      Close any joint accounts

    It is important to close accounts or credit cards that are in both names and cancel any redraw facilities. This will protect the finances of each individual and ensure no more debt accumulates. Each should then open an account in their own name, which only they can access. They will also need to redirect any income that previously entered a shared account into the new account.  Also check any shared social media or other accounts such as eBay – change of passwords may also be required.

    3.      Review your finances

    Update any remaining accounts, loans or policies so they are registered in just one name.  This can be time consuming, so make a list and tick them off as they’re completed.

    Insurance

    It’s crucial to update insurance policies as any individual not named will not be covered. This individual will need to make sure that they have other cover in place that is adequate and affordable for their needs. Also, remember to update any nominated beneficiaries on new or existing policies.

    Loans

    The person whose name is on a loan agreement is responsible for any debt, regardless of changed personal circumstances. It’s vital for the necessary party to remove their name or for both individuals to pay off the loan.  Sometimes agreements need to be reached prior to the changes being allowed.

    Superannuation

    Superannuation is usually a significant financial asset. Any nominated beneficiaries of the parties’ retirement nest eggs will need to be updated.

    Rent and Utilities

    Updating rental agreements and utilities will be crucial, as the listed person may be left with damage or unpaid bills to cover.

    4.      Change Wills, Powers of Attorney and Beneficiaries

    Many Australians don’t realise that divorce can affect their will. Different states have different laws.

    In Western Australia, for example, divorce automatically revokes a current will. It is vital to update wills to reflect new circumstances as soon as possible.

    To be valid, a will needs to be signed by two witnesses. Drawing up a will can be complex so it is often best to consult a solicitor.  Ask also about reviewing or starting Powers of Attorney.

    5.      Create a new budget

    It can take time to adjust to relying on one income. Creating a budget and financial plan early on can make it easier to track expenses and feel confident that bills and payments will be covered.

    6.      Reach out

    Most of us know someone who’s been there, and that divorce can be a very difficult time. There are many online government resources, as well as legal aid services, counsellors and financial advisers that can provide helpful advice on how to make the process as painless as possible.

    Getting in touch with nearby support services or creating a supportive group of friends is the best way to get a helping hand.

Family definitions of Success

It’s a pretty natural thing, we all want to feel successful.

And possibly surprising to many, the most successful people out there often do not feel like they are a success.  Many suffer at some stage in their life from what has been coined the Imposter Syndrome – where we feel that we may be exposed as the fraud we feel we are!

Why do you think that is?   Often, it’s because we have rules and ideas about what it means to feel successful that have been ingrained in us from childhood.

Ask yourself how success was defined by your family?  Was it about how much money you were earning?  What sort of a job you held?  If you went to university or had a degree? If you were married with children?  Had a large home?  Or just happy?  What were you taught about success all your life?  Was it related to health, wealth or happiness?

As it turns out, the most successful people just decide that they are successful, because they just are who they are and because they love what they do.  Often, they love to give back.

Success is an inner feeling, not some far off event in the future that shifts and changes, or something our parents want or how much we have in the bank.

Have a think about how you personally define success.  Will you be a success when you achieve X?  Do you feel you need X to be a success?  Maybe it’s time to evaluate all the things that already make you a success!

What does Success mean to you?

Many people don’t know what type of marker they need to reach to feel ‘successful.’

A lot define success in terms of wealth.  But if it’s just a money goal you’re striving for, chances are, it keeps changing. If it’s being married, that also moves possibly to having kids – even high achieving, brainy, successful, happy, sporty kids. If it’s owning property, that too can change.  Is one enough?  Two or three?  How big do you want this portfolio to be?  Is it having $1 million in the bank?  Or as simple as an emergency fund of $5,000 set aside?   Do you ever think, “I’ll be a success when…  ”

As it turns out, Credit Suisse advised in 2013 that Aussies are the world’s richest people, according to the median wealth of adult Australians.*

So, let’s take a step back.  Figure out what needs to happen for you to feel like you are a success. What is it for you?  Each of us have very different measurements for success.  It might be achieving and maintaining a goal weight.  Conquering a fear. A visit to a country you’ve always dreamed of going to.  A happy life partnership.  Maybe a couple of kids.  A job that pays the bills.  Inner calm.  Health.  We all have different measures – time to find out what yours is.  You might find that financial goals are way down the list.

The important thing is to give yourself plenty of ways to feel successful.  Chances are, you are already successful; you just don’t allow yourself to feel it because there’s always something else you’re focusing on.

Each day, allow yourself to feel successful. Try and relax into a whole other way of seeing what is already working for you.  Congratulate yourself that you made it through another day.  There’s food on the table, a roof over your head, some dollars in your pocket, work to be done and goals to still be met.

Many find keeping a gratitude journal and noting each day what good things happen helps them to feel content.  It’s the little things that count.  It might be as simple as not losing your cool when everything around you goes to pot!  (Winner, Winner, Chicken Dinner!!)  Let that put a smile on your dial!

Without trying to sound too ‘woo woo’ – there is external success that you can choose to measure by societal or personal standards; and then there is the internal success of knowing what and who you are, and being cool with that. This is quite possibly, the ultimate measure of success.

How do you measure your personal success?  Do you feel a success already?  Or is there one thing you want to achieve for you to know you’d ‘made it?’  I’d love to hear your take on success.