Look after your loved ones
Australians are living longer than ever before
Recent studies show that life expectancy is sitting at an average of 82 years for both men and women born in the past decade. While we’re living longer on average, life can still be quite unpredictable.
While you can’t control over our own mortality, it’s important to ease some of the burden on loved ones by ensuring all of your affairs are in order. Here are a few steps you may want to consider during the process.
Make a Will
One of the most important documents you’ll ever own, a valid will protects your money and assets – ensuring they go to the people you choose. The Australian Government estimates that almost half of all Australian’s do not have a current or valid will. This means an executor (or the public trustee) will be appointed for those estates that are not governed by a will, which means there’s no guarantee where your valuable assets will end up.
In order to draft a legally sound will, it’s best to use a solicitor to ensure the document is well-drafted and kept up to date as your lifestyle and circumstances change. You can find out more information about creating a will here.
Manage your Debts
An increasingly large proportion of Australians are carrying large amounts of debt through to their retirement years. Unsurprisingly, home loans make up at least 30% of debt in households owned by someone aged 65 years or older. If you have debts remaining after your death, they still have to be paid, so make sure you consider how they will be categorised in advance. You can read more about different kinds of debt and their relative implications on the AFSA website.
Cover your funeral costs
Funeral costs can vary wildly, but may cost up to $15,000 in some circumstances. One of the best ways to protect your loved ones from unnecessary financial burden is to set up a savings account specifically for the purposes of paying out your funeral expenses. Other options may include pre-paid funeral plans, funeral bonds or funeral insurance, amongst others.
Check your life insurance
Life insurance, which pays out as a lump sum after your death, is classified as a protected asset, which means it’s passed directly onto your beneficiary regardless of your debts. It can however be used to help pay these debts, assuming your beneficiary authorises it. Ideally you should have enough life insurance to pay off your home loan and other debts, and perhaps cover regular income and bills for a short period of time.
Having all of your affairs in order isn’t much good if no one knows about the details or your ongoing intentions. It’s wise to keep all your documents together in a safe, well known place for your loved ones to access at the time of your death.
If you need more information about succession planning, debt management or personal insurance, be sure to get in touch with one of our knowledgeable advisers today.