Gods Money Matters – Articles
Have You Planned for Your Family’s Welfare When You Die?
What does the Bible say?
Proverbs 13:22 “A good man leaves an inheritance for his children’s children”. In today’s context often the inheritance is in the form of life insurance, superannuation, homes, cars and so on. It also means a spiritual legacy but that is another topic,
So according to the bible, leaving an inheritance is wise.
Estate Plan
Do you have an Estate Plan? What is an estate plan?
An estate plan is a plan to give directions to other trusted family and friends what to do with you and your possessions when you are not in a position to make those decisions.
An estate plan is made up of the following:
- A Will
- Guardianships of small children
- Power of Attorney or Enduring Power of Attorney
- Superannuation death benefit nominations
- Business succession planning
Some practical tips
Wills A will is a document that tells your money where to go when you die, just as a budget tells your money where to go while you’re alive. A will only comes into effect on death- it directs a trustee or executor how to distribute your assets according to your wishes.
There are two main types of wills, a basic or simple will. This is for those of you who have a simple family situation. The simple will is for those who have not been in a previous marriage and who don’t have any children to a previous relationship. It is for people who don’t have significant assets at death – so as a guide for those that have less than $1 Million on death… remember to include life insurances.
Another form of will is a more complex and sophisticated will which provides for families that are blended, have significant wealth at death, have children to previous relationships or have some element of business risk for the beneficiaries. This will is typically known as a Testamentary Trust will.
Who should have a will? It is my recommendation that everyone over the age of 18 should have at least a simple will. Given a simple will produced online costs less than $40 then cost should not be an inhibitor to getting this done.
Please, don’t put off getting a will. When a person dies without a will they die “intestate”. This means that their estate– their assets – are distributed according to the state or territory that they resided in. On the surface this sounds fine but in reality it can be very complicated. Please don’t leave your loved ones in a mess when you die – get a will done and leave this world in good financial order.
Guardianships. If you have children or someone in your life then it is important to make provisions for their care should both their carers or parents pass away. It is important when setting guardianships that you discuss with the potential guardian your wishes so that they are aware that if you make an early departure to heaven they’ll be taking care of the children.
Powers of Attorney. Most think Powers of Attorney are to be held over older people – but this is not the complete picture. A Power of Attorney provides a trusted person the ability to act on our behalf if we are not available. An example might be a property purchase where one of the owners is overseas. A person holding a Power of Attorney can act on behalf of the absent person.
Enduring Power Of Attorney is even better, as it “endures” beyond our mental capacity. So if we lose mental capacity then the holder of the Enduring Power of Attorney can make decisions on our behalf e.g. life support.
I highly recommend that you put in place a Power of Attorney and a Executive Power of Attorney.
Superannuation Death Benefit Nomination. A will cannot dictate what happens to your super – as that is controlled by a Death Benefit Nomination. A Death benefit nomination tells the trustees of your super fund where you want the money to go should you pass away. There are two types of death benefit nominations – binding and non-binding. I won’t go too much into it here, suffice to say a Binding death benefit nomination provides greater certainty.
For many of our clients, we recommend that you put in place a binding death benefit nomination with your Estate being the beneficiary. If you nominate your estate – this will direct the trustees of the super fund to pay the proceeds of your super fund into your estate. What this means is that you’ll only have one place telling your money where to go on death, being your will. This way you don’t have to review both your super fund and your will – just simply your will.
So please, if you don’t have an estate plan – a will, guardianships, an enduring power of attorney and death benefit nominations then please get this in place as soon as you can.