The most certain thing about life is that we don’t know what’s around the corner, so it’s important to make sure our financial affairs are in order. Here are our top tips to staying organised.
- Take stock
From estate plans to trusts, what seems like a hoard of legally binding documents will follow us throughout our lives like a bad smell. Some will need to be reassessed more frequently than others. How often you update items like wills, superannuation and insurance policies should be based less on dates (i.e. the start of the financial year) and more on significant life events.
If you’ve just got married, recently had children, are getting divorced or even just bought a house, make an appointment to see your financial adviser and make any necessary changes to these documents.
- Review nominees
At 18, you were probably just excited to be able to buy alcohol. We’ll bet no one told you that you should be organising a will! if you didn’t then, arrange one now. And then update it regularly.
It’s not unusual for people to forget about their will until they get divorced or remarry, and then realise that their first partner is still their main beneficiary. The same thing can happen in binding death nominations for superannuation. You don’t want any of your loved ones to be in trouble in case anything happens to you, take the time to review your nominees here and there.
- Doublecheck coverage
Insurance isn’t a one-size-fits-all situation. Life insurance is critical early on in life when you’re working and have a young family, but once you’re approaching retirement, you can start to tick off cover that’s no longer appropriate for you.
Over time, you might start considering how death cover, total and permanent disablement (TPD) and income protection policies applies to you. It’s also interesting to know you can be covered privately or through superannuation. Most funds will offer basic life cover, as well as extra add-ons like TPD and income protection. Seeking insurance through superannuation can be cheaper than private cover and may even have tax benefits, but the coverage may not always meet your needs.
- Have the difficult conversation
You don’t need to make a Facebook status about your life plans, but the people you nominate to be power of attorney, power of medical attorney and guardianships need to know.
Your nominees need to be in no doubt what their obligations are in the event they’re called upon to make important – and often tough – decisions on your behalf, whether they’re friends, family or a legal representative.
- Be organised
No, it’s not smart hiding your important documents so well your loved ones would need a treasure map to find them if you become mentally impaired or incapacitated.
Documents like a will should be lodged with your solicitor, but less vital papers can be stored at home in a filing cabinet. Make sure the people you trust know where these documents are, and if they need a password to access anything stored in a safe or digitally.
Where possible, include contact details and names for your bank manager, accountant, financial planner and solicitor, as this will make it easier for grieving loved ones.
If you need help making changes to existing documents or don’t know where to start when organising your financial affairs, a financial adviser can help. Contact Green Associates today to find out how we can help.