Genders and Partners | 7 Reasons why Australian women outlive their Estate Plan

7 Reasons why Australian women outlive their Estate Plan – and what to do about it

Genders and Partners | 7 Reasons why Australian women outlive their Estate Plan

Australian women’s life expectancy is now at its highest ever recorded, and is one of the highest in the world, according to recently released research from the Australian Bureau of Statistics.

The average life expectancy for females is now 84.6 years and for males it is 80.4 years, and these figures demonstrate huge gains in life expectancy over the last century since the Aged Pension was initially introduced in Australia in 1909 when the average life expectancy was below the eligibility age.

At that time it was anticipated that most people would not live long enough to receive the pension, and those that did would not get it for long.

Accommodation after Death?

This isn’t the beginning of a joke about the person who died and went to Heaven… It’s a serious estate planning question about how a family-member might continue to live in a property after the owner has died.  This question frequently arises (where a spouse, child or sibling was living with the deceased), and it is often the cause of unnecessary concern & anxiety.

Following your death, family-members may have a challenge in finding new accommodation quickly; they may not have the finances available and if the house is sold quickly, could be rendered homeless.

Is there some way to delay the sale-after-death for a reasonable period to allow the family-member some time to adjust to his new circumstances; to cope with the grief of losing you, and to build-up finances towards a deposit for his own property or to find a suitable home to rent and move out?

Yes – there IS a way!  In your Will, you can create a testamentary trust leaving the house on trust, to be used by the intended person (let’s call that person the Tenant), with a clause in your Will saying that the Tenant can stay in the property for the agreed period.

The trustees of the house won’t be allowed to sell it without the Tenant’s consent.  It is not theirs to sell.

Your Will can contain all sorts of additional conditions, such as whether the Tenant will be obliged to insure the house correctly, pay rent and keep it in good repair.

There may be an agreement that the Tenant can move to a replacement property under the same terms, say if the original property becomes too much for the Tenant to mange and maintain. If a replacement house of less value is purchased the spare funds will go into the deceased’s residuary estate.

This, of course, only works if the property can be passed on this way in a Will and the house isn’t required to be sold immediately for cash for a particular reason, perhaps to clear a tax bill or to pay a specific monetary legacy.

Wills and Estate Planning Adelaide: Organ Donation as part of your Estate Plan

There are a number of ways in which you can make an anatomical gift, which is a gift of your organs, body parts or your entire body for transplant, therapy, research or education.

Although you can put a clause in your Will or other properly signed and witnessed documents, it is best to sign up on a nonprofit organ donor registry such as the Australian Organ Donor Register.

This registry is a confidential computerised database that documents your wish to be an organ, tissue and/or eye donor. It integrates with the various state Departments of Motor Vehicles to note upon your drivers licence at the time of renewal.

In your medical power of attorney, you could give the power to make an anatomical gift to your medical agent, who would then have the authority to make a gift of all or part of your body in accordance with your previously-expressed wishes.

You may have a concern that your life might be ended prematurely in the interest of harvesting your organs. By law, every effort has to be made to prolong your life in accordance with your wishes, before an anatomical donation is considered. Also by law, the medical team treating you must be separate from the transplant team.

Generally, with the exception of gifts during your own lifetime such as blood, a kidney or bone marrow, body-part recoveries can only be pursued after all life-saving measures have been exhausted and you are officially declared dead.

There are no guarantees with anatomical gifts. Just because you direct that your body or parts be used for transplants, therapy, research or education, does not necessarily make it so. Your anatomical gifts must be examined and be acceptable to the medical school, anatomy department or organ transplant team.

There always is a need for bodies and body parts. There are long waiting lists for people in need of transplants. Even if your eyesight is poor, you may have a good transplantable cornea that could give somebody the gift of sight. You may have skin that can be used to aid a burn victim or bone that could be used for an accident victim.

Wills and Estate Planning Adelaide: More common pitfalls of estate planning and how to avoid them

More common pitfalls of estate planning and how to avoid them

In my law practice I see lots of mistakes that people have made when it comes to estate planning, as well as some estate-planning strategies that could be used a lot more.

One of the most common mistakes is a misunderstanding of beneficiary nominations. Nowadays, many assets are transferred at death through superannuation funds, life insurance policies and annuities.

The owner of those investments or insurances (the person who set them up) will often have nominated a particular person(s) to receive the benefits of them, once the owner has died.  This is a separate & binding contract which can bypass the owner’s legal Will.

Many people don’t appreciate how important it is to get the designations of those nominated beneficiaries right.  I typically see beneficiary nominations where at the start of the marriage each spouse nominates the other as the sole nominated beneficiary for the super & the life insurance.  Unfortunately most people forget to keep their binding nominations up to date.  They forget to add the children, or only add some of them, leading to unintended consequences & heartache.

Similarly, if a child dies, most people would want that share to go to that child’s children, ie to the descendants, down the bloodline to the deceased child’s children.  Sadly many people get this wrong, and end up accidentally disinheriting their grandchildren.

And you can’t necessarily rely on “common sense” to sort it out after your death. Unfortunately, there’s little consistency within the financial-services industry. If the insurance plan administrator or superannuation trustee doesn’t know how to handle it, your family will be the ones paying to sort it out.

Wills and Estate Planning Adelaide : The Disinheritance Debate

Wills and Estate Planning Adelaide : The Disinheritance Debate

60 years ago, a baby girl was given up for foster care by her birth mother due to shame about her illegitimate birth.  They did not live together after the first year of the baby’s life, and after the first 7 years shared no relationship at all other than biological.

Now the birth mother has died and left only $100 in her Will to that baby girl (now aged 60). The bulk of the estate was left to two other daughters. The disinherited daughter successfully sued for a third of the estate.

People always say it’s not about the money. But when someone is left out of an estate, they feel hurt, and their emotions take them on a roller-coaster ride.  Money and love get mixed-up.  Heart and head collide.  Grief can very quickly turn to anger, and people can easily relive childhood slights.

Highly charged issues of hurt, shame, pride, greed, love, unfairness, resentment, anger, prejudice and entitlement take over from logical thought.

In my legal practice I have heard hundreds of reasons for excluding family from inheritance.  Older generations were brought up to have different degrees of tolerance for unwed mothers, couples living-together and same-sex relationships.  The rising numbers of step-children provide real challenges to family harmony, and in many cultures it is considered acceptable to leave the bulk of the estate to male children.

Death Duties May Be On The Way Back

Death Duties May Be On The Way Back

On 15 October 2009 the most senior tax-policy advisor to the Australian Federal Government, Dr Ken Henry (Chair – Australia’s Future Tax System Review Panel and Secretary to the Treasury) gave an Address to the Committee for Economic Development of Australia.

In that address he identified 6 areas of future opportunities and challenges governments will need to address in respect to taxation.  At the very top of his list was:

“the ageing of the population, posing challenges for the financing of retirement incomes and of increasing health and aged care needs”.

Dr Henry said that taxes levied on broader bases would be more efficient policy tools, probably more equitable and certainly more transparent ways of raising revenue. Without such tools, governments would otherwise be compelled to continue to rely on bad taxes to achieve their spending objectives.

What does this mean, and why should you care?

A number of senior political commentators have recently speculated in mainstream Australian newspapers, that Death Duties, Estate Taxes or Inheritance Levies might well be one of the options likely to be seriously explored, as part of the current tax-reform inquiry.

The re-introduction of death duties could have a severe impact on most deceased estates, unless great care has been exercised to create an effective estate-plan. This is just one example of how a change in the law could drastically affect you & your family.  Make sure that you have a valid, effective & integrated estate plan.  And keep it up to date.

Wills and Estate Planning Adelaide: DIY Superannuation

Wills and Estate Planning Adelaide: DIY Superannuation

Have you been watching the news recently?  It has been a challenge trying to make sense of all the current news reports on this financial crisis.

A lot of Australians choose to remain blinkered about the impact that the current crisis will continue to have in our local markets as well as globally.  If you are sitting in your home in suburban Australia thinking that all these financial crisis events don’t relate to you, you might be in for a nasty surprise.

For most people, their primary concern is the cost of petrol, rising food prices, health care and housing affordability.  Those concerns don’t magically disappear when you retire…in fact they tend to get magnified through the lense of “fixed income”.

Chances are that you have some form of superannuation and in most cases it is probably a managed super fund.

At the moment, almost all of the big managed super funds in Australia are announcing huge (20% to 30%) reductions (losses) of capital of value.  Some funds have lost more than 30%. They might try to “spin” this as no big deal, and encourage you to take a “long-term” view of the market performance.  They’ll show a graph of managed-funds values over 20 years or so, and say that you have to expect some “swings and roundabouts”.  Of course the fund managers get paid whether the fund values go up or down …

Maybe this isn’t too alarming for some people. However, if you’re in your 60’s and looking to retire the next couple of years, how do you recover from a pretty big dent in your retirement fund?

You might be forgiven for wondering just what you’ve been paying-for with those managers’ fees all these years, and whether there might be a better solution?

Death Benefits … Who Benefits? Do you know who will receive the benefits from your life insurance policy and superannuation fund?

Death Benefits … Who Benefits? Do you know who will receive the benefits from your life insurance policy and superannuation fund?

You need to decide who should benefit from your assets or for whom you wish to provide financially.

You should be clear on how you want your beneficiaries to benefit – do you want them to inherit an asset, an income or cash?

Your Will cannot dictate who inherits the benefits from your life assurance policy.  You might think you can revoke the beneficiaries you have nominated on a life insurance policy by simply nominating other beneficiaries in your Will. But your loved ones might be in for a nasty surprise, when they find out (after your death) that you were wrong.

The life insurer has a contractual relationship with you as the policyholder, and they will only pay out the benefits to the beneficiaries nominated in your insurance contract, regardless of whether your Will states otherwise.

If you want to change your life insurance policy beneficiaries, you need to do this directly with your life insurance company.  You can’t do it in your Will.

Similarly, when it comes to your superannuation fund benefit, the discretion to distribute your death benefit lies with the trustees of the super fund, and they might not necessarily follow your wishes as stated on your beneficiary nomination form.  It is a complex area of the law, which may well have changed since you started with your super fund.

Death & taxes, illness & share-market corrections may be unavoidable … but they don’t have to ruin your family or your business.  Make the effort to protect the people you really care about.  Call Genders & Partners to create an integrated estate plan and avoid questions regarding death benefits in Adelaide and other areas in South Australia. And do it NOW … before it is too late.

Wills and Estate Planning Adelaide: Bequests to Caregivers

Bequests to Caregivers

As we age, advances in medical science continue to improve our life-expectancy, so we are living longer and longer on average.

But as we age, we are more likely to require care towards the end of our lives. Some of this care is provided by voluntary caregivers and friends & family, in addition to paid carers. Sometimes we want to provide for those caregivers or friends in our Will. Such bequests however can be suspected, resented and possibly challenged by family members and other beneficiaries after we die.

Imagine an elderly man changes his Will three months before he dies to leave all of his assets to an individual who had recently befriended him and “taken care of him” in recent times.  To many people the word “gold-digger” might spring to mind.

As people age, their mental abilities age as well. Their judgment, wisdom and discernment in making decisions may no longer be as acute, and they may be more willing to trust strangers.

Sadly, some people take advantage of such elderly people, causing them to sign over assets and benefits or even whole estates to people they hardly know.

Wills and Estate Planning Adelaide: The Right to Choose – Live or Die

The Right to Choose – Live or Die

Do you have strong feelings about what should happen at the end of your life?

You are not alone.

Around Australia in the last 15 years there have been several legislative attempts to create a framework for assisted suicide and voluntary euthanasia, and there have recently been Bills before the parliaments in both South Australia and Western Australia upon this issue.

In 1995, the Northern Territory of Australia became the first place in the world to pass right to die legislation. The Rights of the Terminally Ill Act lasted 9 months before being overturned by the Australian Federal Parliament. At present, voluntary euthanasia and assisted suicide are illegal in all states and territories of Australia; however the pressure is growing for change.

There are already places in Europe and in the USA where the laws permit degrees of voluntary euthanasia.

Of course this is a sensitive and controversial topic, provoking extreme reactions among people.  It touches upon some of the same issues as Capital Punishment and Abortion.

For some, the sanctity of human life is paramount, and for them religious beliefs prevent any suggestion of termination of life.  This group might be called the “Right to Life” group.