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Wills and Estate Planning Adelaide: The Dangers of DIY Wills and Estate Planning

The Dangers of DIY Wills and Estate Planning

Some people resist or resent spending money on estate planning, because they think (wrongly) they won’t gain the benefits themselves.

In difficult financial times like these, some folks may be tempted to postpone or minimise what might seem like a non-essential expenditure.

Every week, thousands of television advertisements from insurance companies encourage people to bypass lawyers and create their own Wills, using cheap or free “Will kits”.

The big ugly truth about these kits is that people make a lot of mistakes when they try to create their own Wills and estate planning documents. They have been lulled into a false sense of security. But answering just one question incorrectly or overlooking something such as appointing a guardian for children can lead to major problems down the road.

There are lots of traps for the unwary, and this whole area of law regarding deceased estates contains a hidden minefield which you absolutely want to avoid. And with a bit of education & planning, they can. Otherwise they won’t know the questions to ask, or what to do with the answers.

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Wills and Estate Planning Adelaide: Planning an Enduring Legacy

Planning an Enduring Legacy

What do you want to be remembered for, after you’re gone?

Traditional Wills describe the worldly possessions you want your loved ones to have. This sort of document is the oldest and best known component in estate planning.

In addition to the Will there are additional types of documents that are now widely recommended as part of modern integrated estate planning. These include Advance Medical Directives which may be used to express your wishes with regard to medical preferences in case you subsequently find yourself in a situation where you can’t make your own decisions. This sort of “Living Will” can address issues relating to end-of-life decisions such as life support and to define the extent of use of artificial means to keep you alive if there is no hope of recovery.  There are also all sorts of other documents which allow you to delegate control and decision-making, such as various categories of Powers-of-Attorney.

Wills and Estate Planning Adelaide Baby Boomers - Are You Bequeathing Disaster to Your Family

Wills and Estate Planning Adelaide: Baby Boomers – Are You Bequeathing Disaster to Your Family

Baby Boomers were born between 1945 and 1965.  As a segment of Australian society we represent a BIG chunk of our national population, and account for a massive percentage of the nation’s private net-worth.

According to the Australian Bureau of Statistics people aged 65 years and over made up 13% of Australia’s population at 30 June 2007. This proportion is projected to increase to 25% in 2056 and to 28% in 2101.

As we prepare to transition into retirement & beyond, we are about to witness the greatest transfer of wealth ever in Australia’s history.

However 2010 Australian research commissioned by the Salvation Army from Roy Morgan Research reveals that nearly two thirds of the adult Australian population does not have a Will. The research also shows 40% of Australians aged 25+ have experienced or know someone who has experienced family conflict as a result of a family member not leaving a Will.

Dying without any Will is called intestacy.  When that happens, the government of the State where you die will determine what will happen to your assets.  This can lead to unintended people (or even the government) gaining ownership of your hard-earned assets.

Many Australians have no idea what happens to their assets after they die, and sadly many rely on the misguided notion that a Do it Yourself Will is sufficient to protect their family and assets.

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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.

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Wills and Estate Planning Adelaide: Estate Planning for Blended Families – More Important Than Ever

Estate Planning for Blended Families - More Important Than Ever

If you are in a second or subsequent marriage that involves different sets of children, then you have a blended family.

If you are planning to start a new life, and maybe buy a home with your present spouse, then this time around you really need to develop an integrate plan to ensure that all the important people in your life receive their fair share of your assets after you die.  That’s what modern integrated estate planning does.

In most Australian jurisdictions, divorce will invalidate all gifts to an ex-spouse under a Will.  However re-marriage will automatically revoke the entire earlier Will (with only rare exceptions).

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Wills and Estate Planning Adelaide: Complications in Estate Planning Following Remarriage

Complications in Estate Planning Following Remarriage

Estate planning following remarriage after being widowed or divorced is complicated by a number of factors, including differences in asset-ownership between the parties, one or both of them having children by an earlier relationship requiring provision/protection, disparity in ages, and concerns about the financial effects of a relationship breakdown (once bitten, twice shy).

Joint ownership of assets, and Family Law considerations of “Community Property” can give a surviving spouse certain property rights which can cause problems for the children from prior marriages.

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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.

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Wills and Estate Planning Adelaide: SKI and Estate Planning

Are you familiar with the term SKI ? It stands for Spending Kids’ Inheritance.

A wealthy & successful businessman of my acquaintance claims that his estate plan consists of spending everything to such effect that his final cheque (to the funeral director) bounces.

Here are some reasons why you may receive a smaller than expected inheritance:

1. Your parents are spending it all. Not intentionally maybe, but with the high cost of living, medical care, and long term care, their nest eggs may not be what they used to be. Nursing home costs can run as high as $80,000 a year or higher in some facilities and long term health care may be too expensive.

2. We are living longer than ever, and as we live longer, we consume more of our wealth.  Australians now enjoy nearly the highest life expectancies (on average) in the world – significantly higher than even the UK and USA.  However this means that the duration of our elder care is longer; the amount of care required is greater; and the costs of such care grow ever higher.

3. Medical science continues to uncover treatments for once-fatal illnesses.  When coronary artery disease or cancer strikes, our survival rates today are many times higher than they were just 20 years ago.  However the cost & complexities of many new treatments & medications can erode even the largest savings.

4. Baby boomers come from families that were larger than today’s families. Parents of children born between 1946 – 1964 had an average of 3.5 children, thus leaving a smaller piece of the pie to be inherited by each child.

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Wills and Estate Planning Adelaide: Glass Ceilings, Black Holes, Budget Deficits & Estate Plans

Glass Ceilings, Black Holes, Budget Deficits & Estate Plans

Australia now has its first female Prime Minister.  The glass ceiling has at last been shattered.  But what does this mean for the federal budget, and how might this affect your estate planning?

Bear with me for a minute, as we explore some of the possibilities.

That the new PM is female is largely irrelevant to these considerations.  But the change of Prime Minister allows the government to distance itself from some of the more unpopular policies of the outgoing PM Kevin Rudd, notably the Mining Tax.

The 40 per cent resource super profits tax – known as the Mining Tax – was the single biggest tax impost since the introduction of the GST.

This new tax on mining profits was supposed to be worth up to $12 billion a year, and was the government’s funding mechanism to boost the retirement savings of workers, lower business taxes and build infrastructure – while still leaving room for the other $2.6 billion in election promises.