Skip to main content

]]>

Main content ]]> Home Compare deals Finance news Managing money Investing Credit & loans Home & property Life stages Tools & guides Small business Home > Investing > Financial planning > Estate planning Print


Estate planning | Updated: 9:23:11 AM, Wednesday June 13, 2012
By Bruce Brammall
Debt Man Estate planning

Be it spouse or parent, having some control over “what happens if you die” is important. The following is a “dummies” guide to estate planning.
Image: © Andres Rodriguez – Fotolia.com

BigPond Money deals

I’ve nearly had a lot of car accidents recently. The closest calls have always been just after crèche pick-up.

The crèche teachers, bless ’em, are awesome. Boundless love and encouragement wrapped in an overdose of community spirit. And that’s to the stressed parents. They’re even better with the children.

But I’m often left pondering what the hell they talk to my kids about all day? And do they monitor peer conversations?

DebtBoy, 5, and DebtGirl, 3, often get in my car declaring they’ll marry each other, their (same sex) best mates, or their cousins, none of which, I explain, is legal.

However, recent statements nearly caused front fences to collide with my Holden: “When will I die? How will I die? What will happen when I die?”

My reflex answers: “not until you’re greyer than Grandad”; “hopefully you’ll be sleeping and you just won’t wake up”; and “you’ll become an angel”. All of which seemed to sate them.

Say it with confidence. They don’t know I don’t know the real answers. I’m Daddy. I know everything.

It dawned on me days later. Sure, the questions reminded me of my own mortality. But I should answer those questions myself.

It seems almost a truism that the monetary affairs of financial advisers are a disaster, like the plumber’s house with the leaky taps, the chef with the empty pantry and the billionaire with the tax problems. (Oh, how ironic is the Rinehart family’s court claims that they’d all go bankrupt if they had to sell the shares held through the family trust?)

Most of my finances are in “excellent condition”. But there’s one area I’d fail.

While I don’t know how or when I’ll die, I have some control over “what will happen when I die”, as a father and husband.

It’s called “estate planning”. And here’s your condensed “Dummies” guide, particularly if a Devil wearing Prada comes to grab you early.

Insurance

This is the foundations. There are four “life” insurances. Three of them assume that you’re still breathing.

Have enough “death insurance” to make sure an untimely passing doesn’t leave your family destitute. Get lots and lots (preferably in your super fund), while you’re young and healthy. Cut back as you age and grow assets. If you die before 50, insurance is likely to be the biggest contributor to making sure your family survive financially.

Wills

Critically important if you’ve had an “unorthodox” adulthood – that is, more than one partner, one marriage, kids to more than one person. If there are blended families, previous marriages, “complications”, you need a will that properly determines who does, and who doesn’t, get your stack of gold coins.

Enduring power of attorney

You’re not dead here, but you’ve lost your faculties. You can’t make decisions for anymore (ie, brain damage) and you need someone to make decisions for you. Who will that be? Probably your partner. But, as backup, someone who won’t be in the proverbial car with you.

Testamentary trusts

Two main benefits. First, control beyond the grave! Second, to make sure that future generations don’t pay unnecessary tax. Testamentary trusts come into existence the moment you die. They allow you to distribute your money over time and tax-efficiently to people who need it most. If you’ve invested wisely, your assets (plus insurance) could be a tidy sum.

Super death benefit nominations

You can’t deal with your super in your will. It has to be dealt with via your super fund, although you can leave it to your estate via your legal personal representative.

Superannuation is a powerful force when it comes to death. Far too many people leave their super to the wrong people, or people who can’t legally have it, leading to disastrous tax consequences.

*****

I have as much interest in dying as Kevin Rudd has in seeing Julia Gillard’s popularity rising in the polls. (Though my eventual death is a vastly more assured than KRudd’s resumption of the prime ministership.)

The main thing I’m thinking about? Are those two beautiful little creatures going to be looked after properly?

Most of these issues are best dealt with by financial advisers, estate planning lawyers and accountants.

And if you can’t answer the third question my DebtKids asked me, then it’s time you spoke to some professionals.
 
Like us on facebook Like us on facebook.

Related links:

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au.

Share this article |

Comments

Leave a comment

Follow this conversation Name: E-mail: Your URL: Comments: Follow any further comments to this article. All comments are moderated. Enter security code:  Security code

Follow this conversation

Leave a comment Your e-mail: You will be emailed when any additional comments are approved by the moderator. You are only subscribing
to comments made to this article. You may unsubscribe via the link provided on notification emails.

Compare deals

buttonset-backgroundCompare credit cards » card

Related guides and tools


How do professional athletes manage their money? How do professional athletes manage their money?

Living within your means is a whole new ball game when all of a sudden you’re rolling in …

Happy 65th! Now, what about your super? Happy 65th! Now, what about your super?

Reaching 65 is a reason to celebrate. And what better way to reward yourself than by …

Doomsday preppers Doomsday preppers

The end of the Mayan calendar is nigh and many are clearly already prepared. We look at …

Safeguard your family’s future Safeguard your family’s future

How would your family survive financially if you weren’t around or able to work? …

6 things you didn’t know about Australian money A comfortable retirement: How much super is enough? Annuities, peace of mind at a cost Biggest investment regrets Don’t be afraid! Debt is not the Devil! Battle of the sexes Dealing with retrenchment Happily ever after: financial strategies before you settle down

Compare deals


Investing in property? property investment Compare home loans Protect your income protect you income Compare income insurance Invest without risk term deposit safety Compare term deposits Go  


Sign up to receive the latest finance news. Email: Subscribe
Connect with us on: Connect with FacebookFacebook Connect with TwitterTwitter Connect with LinkedInLinkedIn Connect with Google PlusGoogle+

BigPond on Facebook

Mozo powered rates widget

Tools & calculators


Currency converter &raquo


Convert: From: To:
Convert Amount: Data supplied by Morningstar, based on a 30min delay.

  BigPond Sport, Movies, Music and Games downloads, video streams and editorial content are unmetered for most BigPond Broadband members. Sitemap | FAQ | Contact Us Terms of Use & Disclaimer – Please read

TelstraBigPond ]]> ]]> ]]>