In recent years, many estate challenges like have made media headlines and we have also seen stories about studies containing statistics revealing how many of us don’t prepare for one of life’s main events, death.
The upshot is only about half of Australians have a valid will when they die.
Perhaps more disturbing is that those of us who do have a will often don’t have the relevant estate planning documents required to go along with the will to ensure our wishes will be carried out.
Or, we opt for a basic will when a more sophisticated will is needed to provide asset protection and legal tax minimisation for our beneficiaries after we die.
In our experience when someone fails to plan and prepare adequately, it causes family disruption. It can launch an emotional and financial hand grenade into any family no matter how harmonious.
The result is those left behind, often feel let down, frustrated and exhausted by the will-maker’s inaction or inability to plan effectively. This is not the type of legacy most people want to leave.
We know from years in practice when people fail to plan adequately it is because they tend to procrastinate not because they don’t care for their families.
Most people genuinely DON’T WANT to cause their loved ones’ grief or trouble after they die. But, sadly when they fail to plan their estate adequately, they often do.
We all know that we die eventually but cannot predict our time of death or when we might lose the capacity to make decisions. We simply don’t like to think about what would happen when that day comes.
Planning our estate, for after we die is an admission of our mortality and slips to the bottom of our priorities even though we love those we are providing for.
So how do we shift our minds to give estate planning the importance it deserves?
Identifying the triggers of our procrastination is a great place to start. If you are procrastinating
- Is it awareness or miseducation, e.g. Not sure where to start?
- Do you think your estate may be too modest to warrant a plan?
- Is it a fear of the time required to prepare the documents?
- Is it concern about the expense involved?
- Is it because you think you haven’t accumulated enough assets yet?
- Do you believe the Government will sort it out?
Is it discomfort with acknowledging your mortality?
If you are procrastinating, it may be just one or a combination of these concerns at fault. Regardless they all raise the same question.
Is the concern significant enough for you to put your loved ones at risk through lack of planning and inaction?
Of course, most of us care more about our families than avoiding some temporary emotional discomfort, or relatively small allocation of time or expense.
In our estate planning practice, we find most people are prompted to get their affairs in order by upcoming travel, a health crisis, a change in family arrangements such as a divorce or marriage, setting up a self-managed super fund, or starting a new business or investment.
When they approach us, it is because of a life event or a push from another advisor. Timing wouldn’t be an issue if we could predict our date of incapacity or death.
The good news is that when people finally do engage in their estate planning, they enjoy thinking of those they love and want to show them how much. They enjoy the process and often extend beyond the financial aspects and provide a legacy letter as well.
When we dig deeper, we learn that most people, even those who procrastinated for years, do care a lot. They are concerned about protecting assets they pass from claims and shielding their beneficiaries from unnecessary taxes.
When they find out how small the investment is (from $395 for a standard will) to plan their estate in comparison to the benefits, they enthusiastically get on with it.
When they discover the Government’s formula to distribute one’s assets is not aligned with their wishes, or the best interests of the beneficiaries, regarding challenges or taxes they get on with it.
So next time your mortality comes to mind, don’t shy away from it but shift your thoughts to those you love and how to be remembered.
Prepare things so that when your time comes, your estate plan and documentation will carry your wishes and provide ongoing comfort and happiness to those you leave behind.