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Nothing left unsaid – why you should review your Will at each life stage

Your will is the full stop at the end of your life. It’s the document that expresses your wishes, acknowledges key relationships and can demonstrate a life of purpose and commitment to important causes.

Having a Will and an Enduring Power of Attorney in place is essential for everyone, however particular issues should be taken into consideration at the following key stages in one’s life:

Twenties (when should you draw up a will)
While your twenties are probably more about partying than planning, as soon as you start acquiring assets, whether it is property or your first car, you should have a Will to ensure that your assets pass to your intended beneficiaries.

Death seems like an unlikely event when you are young and healthy, but young people are over-represented in injury statistics. In NSW alone unintentional injury accounts for more than 150 deaths of young people each year .

Even if you don’t have substantial assets, if you work full time and have superannuation, you are likely to have a considerable sized insurance policy as part of your super. If you’re living with a de-facto spouse and don’t have a Will, under intestacy law (the law which determines how assets pass if you don’t have a Will), your girlfriend or boyfriend may automatically receive benefits from your estate and this may not be your intention.

Thirties (kids come along)
Your thirties can be a bit like the children’s verse – ‘first comes love, then comes marriage, then comes baby in the baby carriage’. Your Will needs to be updated to reflect your changing family circumstances.

Even if you did a Will in your twenties, what most people don’t realise is that marriage actually revokes a Will. Marriage can also bring more than two people together. Where partners have children from previous marriages, whole families are combined and it’s important to decide whether you will favour your biological children in your Will or whether all children will be treated equally.

If you have children, you should also consider who will look after them and act as their guardian should something happen to you. You need to ensure that you leave your estate in a manner that will protect vulnerable children from third parties and from themselves. This may mean ensuring that 18 year-old children do not have unfettered access to their inheritance, but instead, their inheritance can be used for productive purposes and managed on their behalf until they reach a particular age. A testamentary trust can achieve this.

You should also consider what would happen if the bread winner in the family died. Would the surviving parent have to work? Could they stay at home and continue to look after the children? What are the existing debts and would there be sufficient assets and funds to cover these? If you have young children, a testamentary trust can offer your children both tax effectiveness and asset protection benefits.

Forties (sandwich generation – caring for kids and elderly parents)
This is the time in your life where you start accumulating substantial assets (including super). It’s important to update your Will when there are any significant changes to the value of your estate.

Unfortunately, according to the Australian Bureau of Statistics, your forties are also more likely to be the age at which you divorce . Divorce is another important event to review your estate planning. Divorce invalidates any gift to your ex-spouse which, depending on your circumstances may or may not align with your intentions. For example if you had young children that were going to live with your ex-spouse, you may intend to maintain provision for them in your Will.

You also need to consider any particular issues relating to your beneficiaries that need to be taken into consideration such as children with disabilities or the care for elderly parents. What about your own circumstances, do you have adequate funds to pay down debt if your partner died?

The ‘sandwich generation’ refers to people who care for their ageing parents while supporting their own children. Have you spoken to your parents about what would happen if they died or became incapacitated? Do they have a Will and have you discussed their wishes around health care; where they live; who should make financial and legal decisions for them and what kind of life-saving measures they desire – these are all topics that should be gently raised.

Fifties (needs of grown children)
While your children may be grown, you may still be supporting them financially (university, weddings, first homes). You may also be taking on more care of elderly parents. Estate planning becomes very important at this stage as you manage your current responsibilities but also prepare for the future.

Your Will also needs to be updated if the executor named in your Will has become ill, died or can no longer handle the responsibility.

You may need to update your Will if there’s been a death of a family member or beneficiary. You also need to ensure that you have left your estate to your children in a manner that will provide them with ongoing tax benefits as well as protect their inheritance from relationship breakdown and bankruptcy. Have you adequately provided for grandchildren?

Sixties (health concerns, end of life decisions)
Is your Will up to date and appropriate for the circumstances of your beneficiaries? Have your children remarried, divorced or do they have blended families? Legacies also change over time and some may have devalued, you may have bought or sold assets. Are the details in your estate still up-to-date?

Do you have a valid Enduring Power of Attorney to cover you if you lost capacity? Have you reviewed your superannuation arrangements and determined how much tax would be levied on your super if you died and it passed to your adult children. 16.5% in death benefit taxes are levied on the taxable component of superannuation passing to adult children. There are strategies that can be implemented after the age of sixty to reduce these.

Have you considered who should make decisions on your behalf if you lost capacity? Do you want to be kept alive on life support or authorise someone to refuse medical treatment or turn off life support?

You should review your Will regularly, every five years or whenever there are significant changes to your circumstances.

If you would like your estate documents reviewed or need to seek advice about your affairs, contact our Private Wealth team

P 02 6215 9100 or E chamberlains@chamberlains.com.au

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