Ensuring your voice is heard
When you’re here to supervise your worldly affairs, your voice, which reflects your current views, is heard, and more often than not, heeded. But when you’re not here, what voice will be heard? Will it be your most recent voice; an old voice from several years ago; or the voice of government legislation? Unfortunately, all too often, it is voice number two, or worse, three.
If your Will and other estate arrangements have not recently been reviewed, you risk your voice not being heard. If you have overlooked making a Will, the government decides how your estate is to be distributed. This reinforces the importance of keeping all of your estate arrangements current.
That said, even with the best of intentions the most up-to-date Will in the world can be challenged. There have been countless real-life court dramas involving high profile public figures engaging in claims and counter-claims following the death of a wealthy relative. Some of us have experienced similar emotional intensity, anguish, and even bitterness. We must always remember that people change, form new relationships, and take advice from different sources whose motives may not always be pure.
In ensuring your voice from the other side will be heard and heeded, the Will remains the centrepiece of estate planning, but with life insurance and binding nominations for superannuation, there are additional tools you may not have thought of.
The insurance option
A policy taken out by a person on their own life and owned by that person forms part of their estate to be distributed in accordance with their Will, and thus subject to challenge. But, and here is the feature which can make insurance such an important part of sound estate planning. A policy which nominates someone other than the life insured as the beneficiary does not form part of the estate and is quite separate from the Will – and not subject to challenge.
What this means is that if there is even the smallest possibility that your wishes may not be carried out after you’re gone, it might be a good idea to seek professional advice about the value of a life insurance policy.
The super solution
It is widely believed that superannuation is included in an estate and dealt with through a Will. Not so. The trustee of your superannuation fund determines how your super is paid upon your death. You may identify a “preferred beneficiary” however the fund trustee can override this decision at its discretion. If you don’t want this to occur, you should complete a ‘Binding Death Benefit Nomination’.
Binding Death Benefit Nominations
Superannuation legislation allows you to specifically nominate, with certainty, who will receive your super following your death.
These nominations must be in writing and clearly state the names of beneficiaries and any split details between multi-beneficiaries. Some funds offer non-lapsing binding nominations however, many binding nominations must be renewed every three years and are only valid if you nominate a dependant, eg. your current spouse (including de facto), or your child of any age, or a person financially dependent upon you at the time of death. You may also nominate your estate.
Binding nominations are still relevant if you have a self-managed super fund. Even though you have the final decision on how your super is managed whilst you are alive, it is crucial to ensure your trustee/s (who may also be family) continues to fulfil your wishes after you die.
To ensure it’s your own voice that takes final control of what you have worked hard for in this lifetime, consult an estate planning specialist or talk to your financial adviser.
Book Your Financial
Receive customised recommendations to improve both your personal and business related financial health.
Latest Blog Articles
When it comes to money, some things stay relevant regardless of your generation. This article provides five financial tips that all generational groups can benefit from.
Whether it’s taking a more active interest in our superannuation, starting to build an investment portfolio, or even trying our hands at playing the stock market, we can all benefit by understanding the language and key concepts of investing. Here’s a quick introduction.
Neobanks are becoming increasingly popular in Australia as people look for different avenues to manage their money. The recent banking royal commission has also seen people look for solutions outside the big banks for financial products. In this article, we’re looking at how neobanks have become popular and what different they offer customers.
In this article, we look at the role of mortgage brokers and the key benefits of using one. We also set out a list of questions and documents for clients to prepare themselves for a meeting with their mortgage broker.
Since precautionary measures were heightened to slow the spread of COVID-19, almost 1 million Australians have lost their jobs. According to the Australian Bureau of Statistics, Australia lost 7.5 per cent of its jobs between 14 March and 18 April. If you're one of...
Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.
This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.