The importance of a Will
Did you know more than 40% of people die without a Will?1
If you die 'intestate' (without a valid Will), how your assets will be distributed is decided by law, which varies according to the state you live in. Having a valid Will means your assets will be distributed in accordance with your wishes and that this distribution is likely to be more tax effective for your family.
While you will need professional advice to help you work through all the issues associated with making a Will, here are the steps to consider.
Step 1: Assess your assets
Make sure you cover all your assets - people have left Wills listing their entire record collections but forgetting their house, car and other assets! Many people bequeath assets that are not actually owned by them, such as joint assets, life insurance, family trusts, etc. So make sure any asset is yours to bequeath.
Step 2: Determine the likely beneficiaries
What do you want to leave and to who? It may be preferable to specify percentages of assets rather than dollar amounts where possible, as their value can change over time. You may want to itemise some special items such as collections or artworks. Where you think your choices may be controversial, consider including some explanation for your decision: this may help avoid disputes later.
Step 3: Get professional advice
Even if you are determined to use a Will kit, get some professional advice, even if it's only asking a lawyer to look over what you have done. Now is not the time to try and save some money - it could cost your family thousands of dollars in the future. There are lots of hidden traps, and you will need tax advice where there are implications concerning such matters as lump sum versus income, Capital Gains Tax and children. You need to ensure your Will is legally enforceable - that it covers all assets, and is properly executed, among other things.
Step 5: Review your Will regularly
Just like the rest of your financial plan, circumstances change - marriage, divorce, children, changes to your finances - all these events have the potential to impact your estate planning. One suggestion is to review your Will when a major life change occurs.
Step 6: Tell someone where your Will is
If you've done all the work, it would be a shame to leave your Will languishing in the bottom drawer of your desk when the time comes. Make sure someone knows where it is.
Telstra Super Financial Planning offers a referral service for the Wealth Transfer Planning services of Trust Company Limited ABN 59 004 027 749, AFSL 235148 (Trust Company). Trust Company can help you prepare a simple will or develop an entire protection strategy for your estate and beneficiaries.
All members referred to Trust Company will pay significantly lower rates, compared to approaching Trust Company directly.
Access to financial advice about your Telstra Super account including your contributions, investment, insurance and retirement planning options is available at no additional cost as part of your membership. Personal advice on a broader range of issues is available for a fee.
For more information, phone 1300 033 166 or make an appointment with Telstra Super Financial Planning.
1'Will power', Peter Weekes, 16 July 2003, The Sydney Morning Herald & The Age