Did you know that one in two Australians dies without a will in place? Estate planning is considered a very low priority by Australians.
If you want to be in control of your assets and where they go when you die, you need to have an estate plan in place. You need to be wary of these common mistakes that people make with their estate plans.
Leaving it until later
Many people think that estate planning is something to do when you are older. However, anyone over the age of 18 should seriously consider having an estate plan in place as you will likely have several assets that can be passed on to loved ones if you pass away suddenly. Estate plans are especially important for young families as children will be dramatically affected if parents pass away prematurely.
Leaving people out of the will
It is not unheard of for relatives to challenge a will if they do not feel that proper provisions have been made for them. Each state has different laws that outline who can contest a will, and in some cases, it is quite broad. It’s best to get the help of a qualified advisor to structure your estate plan in a way that will benefit the intended beneficiaries and ensure your wishes are met.
Being too specific
Many people make the mistake of being too specific in their estate plans. An example of this is listing relatives by name, such as grandchildren. If your will is not updated and more grandchildren are born, any grandchildren not specifically named will miss out on their inheritance.
Not making power of attorney arrangements
Your estate plan should include more than just your will. Many people forget to include arrangements such as a power of attorney, outlining who can make any financial decisions on your behalf if you are incapacitated at any point in your lifetime.
While Australia does not have an explicit death tax, there are many taxes that can have an impact on a deceased estate. For example, there could be taxes on any capital gains that occur when investment assets are sold to be distributed to beneficiaries. This needs to be taken into consideration when creating your estate plan.
Not updating an estate plan
When people do have their estate planned out, they often forget to update it as their circumstances change. Your will needs to be updated for any situation change, including births, deaths, and divorces, as well as any purchases or sales of assets.
The biggest mistake is not having an estate plan at all. Doing this will result in the state deciding where your assets will go, and it is likely they will have a different idea of who your beneficiaries should be. To organise your estate plan, get in touch with The Farm Protectors today.