Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Five reasons to review your will before Christmas
Estate planning is among the least talked-about parts of any financial plan yet given the growing level of wealth in Australia it is likely to be one of the most important.
This is particularly so in an age where blended families are more common than ever, and we are about to see the biggest redistribution of wealth from one generation to the next in history.
It is around this time of year that we tend to be inundated with request to arrange for reviews of wills, powers of attorney and the like, as family gatherings draw attention to what matters.
In my experience, wills and estate plans more generally should be reviewed at least every three years, if not before, when significant events occurs. Here are the five key reasons why you should review your will today:
Divorce or marriage
Major life events can actually render your will invalid, or at worst result in your estate being paid to someone other than whom you wish to receive it. In this case, your will likely be awarded based on the advice of a court of tribunal, attracting the associated legal costs. Therefore, the first trigger for reviewing your will is if you have divorced, married or remarried since your previous one was drafted.
Children growing up
While this wouldn’t necessarily trigger a review, as your children grow up and have families of their own their circumstances, and your views, may change towards their inheritance. That is, you may wish to provide ongoing specific support to education expenses of grandchildren, detail a number of bequests or something similar.
Don’t include testamentary trusts
Testamentary trusts remain one of the most misunderstood parts of any estate planning package, yet they are among the most tax-effective. They are by no means forced on beneficiaries but rather allow them to receive their inheritance in the most tax-effective way possible. At best, these trusts allow your beneficiaries to distribute to children at adult marginal tax rates. Unless your will is 10 to 12 pages long, you don’t have a testamentary trust, as the deed acts as your ‘trust deed’.
Assets have changed
The world is moving so fast these days that our financial circumstances can change in any given year. If your asset base changes significantly enough, whether through a business or investment windfall, or bankruptcy, you should pull out a blank piece of paper and reconsider your intentions. This also includes superannuation which is a non-estate asset.
Too specific/not specific enough
Similar to above, when drafting a will our views may be different to what they are today. When it comes to estate planning, you can be as prescriptive or flexible as you like, controlling income and capital distributions or allowing a ‘free for all’. If your will is overly prescriptive, you have a spendthrift child or your views have simply changed, now is the time to review it.
