“My partner and I have recently had our first child. I've been thinking more about the future and how I can secure my family's financial well-being. How can I ensure that my estate plan is up-to-date and accurately reflects my current wishes and circumstances?"
-Question from Olivia in Glenelg, South Australia
Top answer provided by:
Rachael Todman
Dear Olivia,
Congratulations on the newest addition to your family! Welcoming a little one into your life is an incredible milestone that brings with it so much joy and responsibility. It's wonderful to hear that you're thinking ahead about securing your family's financial future.
Ensuring that your estate plan is up to date is a crucial step; let's explore things to consider to keep it aligned with your current wishes and circumstances.
Review Your Estate Plan Regularly
Life is ever-changing, and so are your circumstances. It's essential to review your estate plan periodically, especially after significant life events such as the birth of a child, marriage, divorce, or changes in your financial situation. Failure to do so can result in outdated provisions that no longer align with your wishes and could potentially lead to unintended consequences.
Alongside your estate planning, it's important to review your life insurance policies. These include coverage for things such as Income Protection, Life, Total and Permanent Disability (TPD), and trauma cover. Without addressing your life insurance needs properly, your formal estate planning documents such as your wills, won’t work effectively.
Update Your Will and Trusts
If you already have a will or trusts in place, it's crucial to periodically review them to ensure they still reflect your wishes. You might need to update your will to include provisions for your children, such as appointing a guardian or establishing trusts for their benefit. However, if you haven't yet established wills and trusts, seeking advice from legal professionals can help you create these essential documents, ensuring your assets are protected and your wishes are clearly outlined.
Life Insurance Review
As your life changes, so do your insurance needs. Things like changes in family dynamics, career paths, health, and financial circumstances can all impact how much coverage you need. By regularly reviewing your policies, your family will remain well protected, no matter what life may bring your way.
Power of Attorneys and Advanced Care Directives
Designating someone to manage your financial and healthcare decisions through Power of Attorneys ensures your interests are protected if you're unable to do so yourself. Similarly, Advanced Care Directives outline your preferences for medical treatment, relieving loved ones from the burden of making uninformed decisions during stressful times.
Beneficiary Nominations
Ensuring your beneficiaries are current across all accounts and insurance policies, including superannuation, is a vital but often overlooked aspect of estate planning. Superannuation, in particular, doesn't automatically fall under our wills, making it crucial to maintain up-to-date beneficiary nominations. However, restrictions on nominee selection exist, highlighting the importance of seeking professional advice to navigate potential tax implications effectively.
Guardianship Provisions
As parents, one of the most important decisions you'll make in your estate plan is appointing a guardian for your child in the event that something happens to both you and your partner. When selecting a guardian, it's important to choose someone who shares your values, is capable and willing to take on the responsibility, and can provide a suitable living environment and educational opportunities. Proper legal documentation helps formalise your choice and assists in avoiding uncertainty or court intervention.
Consult with Professionals
Navigating estate planning can be confusing, especially considering the varying laws regarding wills, trusts, and superannuation. Seeking advice from legal and financial professionals can assist you in understanding the complexities of estate planning. Additionally, financial professionals can help you ensure you have appropriate insurances in place.
Communicate Your Wishes
Finally, remember to communicate your wishes with your loved ones. Having open discussions about your estate plan with your partner, family members, and appointed guardians can help prevent misunderstandings and ensure everyone is on the same page & alleviate potential conflicts down the road.
Wishing you and your family all the best for the future!
Kind regards,
Rachael Todman
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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