It’s almost 30 June which, for most of us, means it’s time to prepare our tax returns. Whilst we are already ‘adulting’, the end of the financial year is also a great time to sort out some other life admin.
Jobs like reviewing your insurance (think car insurance, home insurance, health insurance and life insurance) and your estate plan (including your Will) mightn’t be most people’s idea of a good time, but ticking them off your to-do list means starting the new year with greater peace of mind. And who doesn’t want that?!
To help you review your estate plan as quickly and easily as possible, here’s a brief explainer.
What is an estate plan?
Estate planning is the process of getting your affairs in order to guide both your care in the event that you become incapacitated, and the distribution of your estate after you pass away.
An estate plan typically consists of several parts including:
- A Will
- Enduring Power of Attorney
- Medical Decision Maker
- Advanced Care Directive
Why do I need an estate plan?
Although it can be difficult to think about our passing, planning for when the time comes is an act of love for our nearest and dearest.
In the event we become incapacitated, our estate plan tells them how we want to be cared for.
After we pass, our estate plan will guide the distribution of our estate in accordance with our wishes.
Having a comprehensive estate plan in place removes the burden of these decisions from our loved ones during an already overwhelming time.
Why should I review my estate plan?
The end of the financial year is a great time to review your estate plan because life changes over the course of months and years.
Obvious milestones like the births of any children, marriages and divorces, buying and selling of homes and cars can all have an impact on your estate plan. Moving interstate can also affect your estate plan.
Likewise so can more subtle changes in your life like ageing parents, changes in your friends’ lives, the inheritance of family heirlooms yourself. Some examples include:
- You might have nominated your best friend and their partner to be the guardian of your children in the event of your death. If they have recently divorced, you might want to appoint a new guardian.
- Your mother may have recently passed away and left you a valuable family heirloom in her Will. You might like to nominate a beneficiary in your Will for the same item.
- A nominated beneficiary might have recently married their partner and changed their legal name. Ensuring all names in your estate planning documents are correct can avoid any confusion and ensure your wishes can be fulfilled.
- Perhaps you nominated a close friend as a beneficiary in your Will, but you have since lost touch and no longer wish to include them.
- Perhaps there have been changes to your health.
There are any number of reasons your circumstances might have changed over time. Maintaining current estate planning documents is the best way to ensure your wishes can be fulfilled when the time comes.
How should I review my estate plan?
Consider how your life has changed since you last reviewed these documents. Think about:
- your assets and liabilities
- your age and health
- your current and future earnings
- your family structure, including any births, deaths, marriages and divorces
- your digital assets (eg. NFTs or Cryptocurrency)
Now take a close look at each of your estate planning documents, one by one. Be sure to look for any inconsistencies between the documents - even minor inconsistencies can have a negative impact when it comes to dividing your estate.
If you’re keen to learn more about estate planning, check out this Estate Planning Checklist.
Keeping your estate plan up to date is the best way to make your wishes known, and to save your loved ones time and stress when the time comes. A great starting place is ensuring you have a legal Will in place. Let Willed help you with that at willed.com.au