One of the most important things you can do for your loved ones — and your own peace of mind — is make sure your affairs are in order before you pass away. But there’s a lot more to the estate planning process than getting your Will sorted. Here are a few additional items that, depending on your situation, you might need to check off the list.
1. Make an inventory of your assets
One of the first steps when planning your estate should be to itemise all your belongings.
This means compiling a list of not just your physical assets (such as your property, car and jewellery) but non-physical assets (such as bank accounts, investments and superannuation) too.
2. Talk to your executor
An executor is the person you appoint to manage your estate in accordance with your wishes once you pass away. Think carefully about who you choose, as an executor’s job can be quite taxing. If you don’t believe anyone you know is up to the task, you can opt to go with a professional (such as a solicitor, accountant or specialist trustee company).
3. Make a list of your debts
End-of-life planning is about more than distributing your assets — any debts you have will need to be settled too. When you pass away, it falls to your executor to pay down your debts using the funds from your estate. If the available funds fall short, they might resort to selling assets that were intended for your heirs.1
4. Make sure you have a death benefit nomination for your super
To have a say in how your super death benefit is distributed, you’ll need to nominate a beneficiary via your fund.2 Keep in mind that your super can generally only be paid out to a dependent, which means a spouse, child, financial dependent, or someone with whom you have an interdependency relationship.
If you’d prefer your death benefit goes to someone else, there’s also the option to nominate your legal personal representative. This way your super benefit can be paid into your estate and distributed to your preferred recipients as specified in your Will.
5. Check your life insurance
Like super, life insurance policies aren’t typically covered by your Will. That means your insurer will pay the proceeds of the policy to your nominated beneficiary when you pass away. Make sure to review your nomination, especially after any major life events (such as getting married, having kids, getting divorced, or the passing of your nominated beneficiary).
6. Review any co-owned assets
If you co-own property with another person, it might be a good idea to review the ownership arrangement that’s in place. If you are joint tenants, then right of survivorship means that your share of the asset will automatically pass to the remaining tenant when you die. If you are tenants in common, however, your share will form part of your estate and can be bequeathed to whoever you wish.3
7. Make a list of contacts and memberships
Your death won’t just be felt by your friends and loved ones — chances are people outside your circle will be impacted too. To help those who are managing your affairs after you’re gone, consider compiling a list of all the people and organisations who should be notified in the event of your passing.
8. Set up an Advance Care Directive
If you fall seriously ill or are injured, an Advance Care Directive will let doctors and your family know what type of care or treatment you’d prefer if you’re no longer able to communicate or make the decision yourself.
So long as an Advance Care Directive is valid (meaning you had capacity when you wrote it, it clearly specifies which treatments you would accept or refuse, and it’s relevant to the situation at hand), it must be followed by health professionals.4 Make sure to review it each year in case your preferences change.
9. Set up Enduring Power of Attorney
An Enduring Power of Attorney authorises someone to manage your financial and legal affairs on your behalf, and continues to operate in the event you lose the capacity to do so yourself. This might involve handling your finances, signing legal documents, and even selling your home so you can move into an aged care facility.
10. Set up Enduring Guardianship
Similar to Enduring Power of Attorney, Enduring Guardianship authorises someone to make lifestyle, health and medical decisions on your behalf (which can include where you live and which medical treatment you receive), and it continues should your decision-making ability become impaired due to illness, injury or advanced age.
11. Think about setting up a trust
If your heirs are minors, intellectually impaired, or you suspect they might misuse the money you intend to give them, think about whether a testamentary trust would be beneficial. This comes into effect when you die and gives your assets to a nominated trustee to hold on behalf of your beneficiaries. They will then be distributed according to the rules laid out in the trust deed.
12. Consider your digital legacy
Have you given much thought to what will happen to your social media accounts once you die? Many social media platforms let you memorialise your profile, which locks access but preserves your memory by allowing loved ones to continue to view your posts and photos. You might also be able to nominate a ‘legacy contact,’ who can elect to delete your account when you pass away.
13. Keep your family in the loop
Broaching the topic might be uncomfortable, but it can be a good idea to involve your family in the estate planning process so they understand what you’re leaving behind and what’s expected of them. This is especially important if you’ve appointed a family member as executor. Think about keeping a master document with a list of all your assets, accounts and the whereabouts of important documents to help make things easier for them.
14. Review your plan annually
Finally, make a point to review your estate plan at least once a year, or every time you undergo a major life change. This can be a good idea even if your personal circumstances haven’t changed, since there’s always a chance that tax laws and other regulations might.
Estate planning can be complicated and there are consequences to not setting things up correctly. For advice on writing a Will and everything else that goes into settling your affairs before you pass away, consider speaking to an estate planning lawyer.
1 Victoria Legal Aid
2 Australian Tax Office
3 Australian Tax Office
4 Health NSW