There is no shortage of celebrity examples demonstrating the importance of having up to date estate plans.
Your Will. Your word.
At the heart of an estate plan is a formal Will. It sets out who you would like to inherit your assets (your estate), and without a Will (dying intestate) your assets will be distributed in line with a state government formula. If you have no near kin, your estate could even end up in the state government's coffers.
In these days of blended families, dying intestate can bring heartbreak – and significant legal costs, to loved ones.
When motor racing legend Peter Brock died suddenly in 2006, he had no formal Will. He left behind a former wife of 25 years, three children – and a new partner. It would take several years of legal wrangling for the two women to reach a settlement on Brock's estate.
To remain relevant, your Will should be updated for various milestones:
- the arrival of children
- even a significant change in your asset holdings
A Will can also be used to make provisions for children by appointing a guardian or through the creation of a testamentary trust, which can put your assets to work for many years providing funds to support your children.
Power of attorney – your word through another
Power of Attorney is a part of your estate plan that applies while you are still very much alive. It lets you appoint a trusted person to manage your financial affairs if you are no longer able to do so yourself.
The tragic skiing accident of Formula One legend Michael Schumacher highlights how life can deliver some dreadful curve balls, and having Power of Attorney in place can take the stress off family members at an enormously challenging time.
Finally, let your family know where your estate plans are held.
It was assumed US rock legend Michael Jackson died intestate. It was only when his Will was found several years after his death that legal action between various family members was put to bed.
Contact your local Mortgage Choice broker today to discuss how you can work together to bring your Will and your estate plans up to date.