Here’s what may happen to your savings, super, etc. if you die?

Few people like to think about their own death, especially if they’re young and without any health problems. So you may ask, why young adults should consider creating a Will?

Think about it this. If you die without leaving a will, a precarious situation arises where government agencies are open to claim your assets and there can be disputes between family members.

Let’s have a closer look at all of this.

What is a Will?

A Will is a binding legal document that includes your wishes on what will happen to your assets (and liabilities) after you die.

An asset is anything of value that you own, including property, cars, and possessions such as jewellery and money in a bank account.

A Will can also include instructions on who will take guardianship of any children, and instructions on funeral plans.

 

When should I start writing a Will?

As soon as you turn 18. Generally speaking, when you start developing some assets it’s a good time to start thinking about your Will.

Preparing a Will can be daunting, but an easy first step is figuring out what you have to give.

For example, some young people have superannuation behind them, but a lot of people don’t know that superannuation is not an asset that’s controlled by your Will.

It’s also vital for us all to know where the original copy of our Will is located.

 

What happens to your debts if you don’t have a Will?

Any debts that are owing at the date of your death will need to be paid from the assets of your estate, this is regardless of whether you have a Will.

The executor or administrator of your estate will need to identify all the assets and liabilities of your estate and determine if there are sufficient assets to repay the debts before making any distributions to the beneficiaries.

Without a Will, there’s no nominated executor or administrator to undertake these tasks, drawing out the process considerably.

It’s why it’s so important to have a Will because otherwise it goes down a long legislative list of people that could apply to take control of your estate.

 

What about my university loans or HECS debts?

As for those of you with outstanding HELP (HECS) debt from studying, payments assessed as payable up until the date of death are still required to be paid by the executor or administrator of your estate, but the remaining debt is cancelled after this date.

 

What happens to my superannuation?

If you’ve been working for at least a couple of years, chances are you’ll have a bit of superannuation.

Unlike direct assets that can be accounted for in your Will, in order for the right person to receive your superannuation death benefits, a binding death benefit nomination needs to be organised through your super fund.

The way superannuation works is that in the event that someone does not have a binding death benefit nomination, in most cases you leave it up to the sole discretion of the trustee of your super fund to decide who receives that benefit.

Once you have obtained a binding death benefit nomination from your super fund, they legally are bound to follow the nomination.

 

What are the biggest mistakes people make when organising their Wills?

According to the experts, the biggest problem is people not engaging professional advice when putting together their Wills.

During the pandemic, we saw an increase in DIY or at-home Wills or these Will kits which create all sorts of issues, primarily around the construction of the documents themselves.

There are issues with people in the family witnessing the Will when they shouldn’t have, as well as problems with failing to give everything away with their estate.

At the end of the day, the best practice is to go see a lawyer.

 

What’s the first step with getting a Will in order?

The first things to figure out are as follows:

      • What assets you have to your name
      • What assets you might share with another person
      • Who you want to nominate as your beneficiaries
      • Who you want to nominate as your executor

After you have all this information, the next step is to talk it over with a solicitor.

A solicitor knows all the intricacies for how all these things are formed, they know the list that they need to check off, how to go through the list in terms of what you need, and they will guide you through that.

 

OK, I have a Will now — how often should I update it?

Every three to five years is recommended — but that’s only if you haven’t had any relationship changes.

You think you might have something in place, but if your relationships start to change or if there’s discussion over whether a party is considered a de facto, any new relationship changes between children, it could affect your Will.

 

What is a beneficiary?

Beneficiaries are the people who are named in your Will who will benefit from the assets of your estate.

 

What is an executor?

An executor is the person you appoint to carry out the instructions in your Will. The responsibilities of an executor may include:

      • Locating the Will
      • Making funeral arrangements
      • Notifying the appropriate government and business institutions of the death
      • Distributing the estate assets

Your Will needs updating or don’t have one, act now. Speak to your solicitor today to get it all sorted. Let’s be honest, if you die, others will make decisions on your behalf. To get what you truly want, it’s best to plan it out early. Hopefully we have covered why young adults should consider creating a will. If you like to talk further, contact us today. 

 

We’d love to hear from you.

enquiries@financiallysorted.com.au

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Moonee Ponds VIC 3039
P: 03 9370 4800

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Wheelers Hill VIC 3150
P: 03 9888 3175

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