Australians encouraged to review their estate plans

By Jon Bragg

February 03 2022
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Individuals should make sure their current estate plan is up to date.

TPT Wealth has encouraged Australians to take the opportunity at the start of the year to review their estate plan and ensure it still reflects their wishes.

The firm has provided a checklist of key areas that individuals should focus on when updating their estate plan, which covers how assets should be handled when they pass and provides instructions for how their finances and health should be managed.

Firstly, according to TPT Wealth, Australians should consider whether assets are held jointly or solely in their name and also consider who they wish to inherit these assets.

“Assets held jointly will automatically become the surviving joint owner’s asset on your death,” said TPT Wealth senior estate planner Kathy Coldicutt.

“If, however, property is owned as ‘tenants in common’, the deceased’s share of the property will pass in accordance with their will, or under the rules of intestacy (this law dictates the particular order to whom the estate is distributed to), if they have not made a will. Whereas assets solely in your name pass in accordance with your will.”

Individuals should also ensure their will is up to date with all of their assets being dealt with in line with their wishes, with Ms Coldicutt recommending that wills should be read through at least every three to five years to account for changing circumstances.

Making sure beneficiaries and their details are current is a key priority of this review, along with potential amendments if the circumstances of beneficiaries have changed.

TPT Wealth said that a change in a person’s relationship might also affect their will and the people they would like to provide for.

“Your will should take into account any succession plan in which you are involved for a business or partnership. And any friction between family members,” said Ms Coldicutt.

“Make sure you appoint an executor who will have the time and ability to manage the estate without causing conflict among family members. Also ensure anyone who is financially dependent on you is taken care of and think through how debts such as your mortgage will be paid.”

Additionally, the firm said individuals should check whether they are satisfied with their enduring power of attorney arrangements and pointed to the importance of registering a power of attorney as a person becomes older or receives a medical diagnosis that indicates they will likely need assistance in managing their financial affairs.

Finally, TPT Wealth suggested that Australians should verify their super fund and life insurance policy beneficiary nominations.

The firm noted that the distribution of super following an individual’s death was determined by the trustees of their super fund and not necessarily their will.

“Fund members may nominate the beneficiaries to whom super proceeds should be given,” Ms Coldicutt explained.

“This can be a binding nomination, where trustees will pay the funds to your nominated beneficiaries, as long as the nomination is valid. Or the nomination may be non-binding, which means the trustees will consider who you have nominated, and they have the final say over who receives your super and in what proportions after they have attempted to find all potential beneficiaries.”

Ms Coldicutt said that a legal personal representative could be nominated to distribute the funds in accordance with an individual’s will, with this nomination regularly reviewed and discussed with an estate planner.

“Also, consider appointing an enduring guardian to handle your lifestyle and medical decisions if you are unable to,” she added.

After individuals have reviewed their will, TPT Wealth said it was important for them to inform their loved ones where they will be able to find the will as well as details of their enduring power of attorney and other legal documents.

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Retirement