According to recent reports of the New South Wales Trustee and Guardian, approximately 45% of Australians don’t have a valid will. It’s an astonishing figure, but why is something so important not taken seriously? In this podcast, Leanne Matthewson, an Estate Planning Expert from Murdoch Lawyers explains why you need to be future-planning regularly.
Dan: Leanne, why is future planning not on the radar to the extent that it should be?
Leanne: It’s an interesting question, Dan. I think it’s part of human nature that we like to procrastinate generally, and also, I don’t think people like talking about dying and losing capacity, which is understandable, and also, interestingly enough, most people seem to have some sense that they will know when they’re going to die and that they’re not ready to do it just yet, so it’s a bit of an anomaly in the way our brains function I think.
Dan: Leanne, is it the case also that estate planning isn’t as simple as it used to be. I mean, we’ve all got more assets, more accumulated wealth and it can be a little bit more complex than perhaps it once was.
Leanne: I would agree with that completely, Dan. I mean, in the good old days people had a house and a car and some money in the bank, but the introduction of compulsory superannuation some years ago has changed that significantly because now most people have at least some wealth and often a significant amount of wealth sitting inside their superannuation fund, either that they’re aware of or not aware of, and there may even be some, effectively some life insurance money sitting within that so that of itself complicates things.
Leanne: Then of course, we have more complicated relationships now. People are having multiple relationships, different partners, more children than they used to have, so our lifestyle seems to make our affairs a bit more complicated as well.
Dan: What’s the starting point for somebody trying to get their head around this sort of future planning generally?
Leanne: I really think that the starting point is having some clarity about what your life plan is for the next three to five years and if you understand what it is that you’re hoping to achieve in your business or in your personal life in the next three to five years, then your estate plan simply supports that. We put documents in place to ensure that the right people are stepping up to the plate to fulfil what was your plan if you should unexpectedly die or lose capacity before you’ve completed your goals.
Dan: It makes a lot of sense because we tend to departmentalise these things in a way, like I’ve got to get my will in order because I’m now 70 years of age, when it’s just an odd way to think.
Leanne: It should really be revisited regularly… Ideally, it’s a living document and it’s a process that you go through and renew and refresh every five years or so. Sometimes the review is as simple as we sit down with clients and read their documents and be satisfied that that still meets their wishes and would do the job. Other times a lot of things can happen in the past five years and the documents might need to be changed, so if we approach it in that way then we have a plan that works and looks after the people that are special in our lives, rather than sitting there thinking well, I’m not going to die until I’m 70 so I’ll write a will now that looks very different to what it should look like in 50 year’s time.
Dan: Are there sort of trigger points along the way in a person’s life that does necessitate revisiting a will or in fact, for some that haven’t got a will, getting a will?
Leanne: Definitely. I mean, things like buying your first house, having a child, entering into a significant relationship, marriage. I mean, legally the act of marriage cancels any prior will or enduring power of attorney that you have in place, so that’s a significant event. Often we find that a death of another family member can prompt people to try to get their affairs in order and the most often thing that we have is people ringing and saying I’m jumping on a plane, I’m off overseas, the end of the week I need to do something, but they’re the typical sort of things.
Dan: Leanne, I’m assuming that business owners particularly should also be looking at this.
Leanne: Absolutely, I mean, you’ve put a lot of energy into your business… Most business owners that I know or all business owners that I know have put a lot of blood, sweat, and tears into their business and it makes no sense at all to not have a plan about who is going to be able to run the business, sell the business, manage the business, if you’re not around. Sometimes that will be a person’s spouse, but sometimes it won’t be, it’ll be someone quite different and it’s relatively simple to put some documents in place to ensure that the right person is managing that process for the business owner.