It’s time get serious about estate planning. Why? Because none of us are getting any younger. The ‘fountain of youth’ is still a distant dream, but it’s something that many of us still pursue in the hopes of slowing down our inevitable demise. Because we think that death is not in our immediate future we find it hard to get serious about estate planning.
According to he American Society for Aesthetic Plastic Surgery‘s most recent report, we now have cold, hard stats behind the plastic surgery boom. The number of cosmetic procedures performed on women has increased by 538% since 1997. The number of procedures for men has increased by a whopping 325% since the same year. All up, Americans spent a grand total of US$13.5 billion on combined surgical and nonsurgical procedures in 2015 (that’s US$1.5 billion up from 2014). Liposuction is by far the most popular procedure for both genders, followed by breast augmentation for women and nose surgery for men.
While we may be quite adept at changing the outside, our insides are aging beyond what medicine can cope with. It’s not just our hearts that are getting tired or our livers trying to function after years of ‘extra’ dry martinis, our mental capacity and accuity slowly (or sometimes rapidly) regresses as our brains lose their plasticity and neurons do not rapid fire like they once did.
As leading demographer and columnist for The Australian Bernard Salt has recognised, the average Australian now lives to 82, up from 63 in the mid-1930s. The centenarian demographic — those aged 100-plus — is one of the fastest growing. What these statistics mean, Salt argues, is that pensions and superannuation must now last on average at least 15 years in retirement for men and 20 years or more women. The codicil to this is that not just retirement planning but estate planning is more important than you might think.
So why do we put it off? We are serious about life but we seem to find it hard to be serious about our own deaths. We cannot live forever and yet we seem to be terribly good at procrastinating about estate planning. Thinking about our death and what happens to our worldy possessions and our family when we’re gone does not bring about death more quickly – usually. It is a very small group who are killed by trusted loved ones greedy for an inheritance!
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Putting off estate planning is not a wise thing to do. We do not know when we will die or become incapacitated and unable to do our own estate planning. Having incomplete or no estate planning at all spells disaster for the loved ones we leave behind. The emotional distress and potential conflict that happens for families because of lack of planning is completely avoidable, but almost guaranteed.
A 2015 study from Everplans (a place to digitally store estate planning documents) reveals that 69% of Americans say they have seriously considered writing a will, yet only 34% follow through on that process. Another 95% say they don’t plan well for the handling of their estates due to lack of knowledge and lack of good financial tools.
In another study by caring.com, they found that among those with children under the age of 18, only 36 percent of parents have some sort of estate planning document set in stone, while 42 percent of adults ages 19-29 have a healthcare power of attorney. Not surprisingly, the top reason for not having a will or living trust, cited by 47 percent of respondents, is delaying getting around to it. The second-highest reason, cited by 29 percent of respondents, was not having enough assets to leave anyone.
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These are just excuses for not getting serious about estate planning. All of these are surmountable issues and most of us have more to pass on to our loved ones than we realise.
Get Serious About Estate Planning & Start
But where do I start? Seeing a professional is a good place to start. Estate planning can sometimes be a bit tricky, so having someone on your team to assist you will not only help you to get started, but to finish it well, too! A specialist in estate planning will guide you through the process and help you to see that it’s more than just a will.
Getting Serious About Estate Planning – All of It
There are some must have estate planning elements which your estate planning professional can help you with, including being organised with:
A will functions to designate who will receive your assets when you die. It is a document that can and should be revised according to changing circumstances and assets. It is also the document in which you specify who will be guardian for your minor children.
An enduring power of attorney document appoints someone to make financial and/or personal decisions on your behalf. They become your attorney at a time previously nominated by you – usually when you are incapacitated to make financial and personal decisions yourself. It may be that you choose one person to make financial decisions on your behalf and someone else to make personal decisions, or it might be one person who does both. They do not have to be someone in your family and sometimes it is very wise to choose from outside of your family – or a completely objective professional, like a lawyer.
Testamentary discretionary trusts are great estate planning tools because they can offer tax minimisation, asset protection and flexibility. A testamentary discretionary trust is a type of trust created under a will, comes into existence only upon the administration of the deceased estate. It can offer protection against a myriad of ‘what-if’ scenarios, including divorce, bankruptcy and lawsuits.
Because superannuation is not a personal asset and so is not covered under your will, you need to instruct your superannuation fund specifically with a binding death benefit nomination. This is especially important because of the life insurance often held inside super. Another option to consider here is a self-managed superannuation fund.
An advance health directive (or advance care directive) is a legal document that gives instructions about your future healthcare, usually when you are incapacitated and cannot make decisions yourself. The document may also nominate a family member or trusted friend to make those decisions when you can’t. They are not just for ‘old people’ as to when to turn off the life support machine, but may also be useful for younger people who have an accident or are victims of a disease.
It’s time to get serious about estate planning. For help with getting serious about all your estate planning needs please contact us today at Estate Battles. Our experienced estate lawyers offer a free, 10-minute phone consultation.