This is one of the most challenging articles I have had to write, as it is a very sensitive topic. However, it is very important one, because it can be very costly, if these things aren’t done.
It may not happen to you for a long time. However, it may happen to your parents, to a relative or perhaps a friend. It is always best to know the potential problems to solve, so you can make educated decisions, rather than find out later, that there was a better way.
The challenge
When a person passes away, the surviving family members and beneficiaries, can be faced with several problems:
- A couple’s Age Pension may reduce for the surviving spouse if their partner passes away.
- There may be potential ‘death tax’ on the superannuation balance who is unwell, if they pass away before this is resolved.
- An individual’s bank and investment accounts are frozen when someone passes away, which creates an issue if the surviving partner, children, or friends, need to access money for expenses and funeral costs.
- It can take a long time with less certainty if there isn’t a Will or superannuation beneficiary in place.
Next steps
- Friends and family need our contact details – I impress on all my clients, to contact me if a doctor mentions to you, or a loved one, that you have a limited time to live. If you are single or a widow, it is important that your children or friends have our team’s contact details and have been briefed to contact us.
- Time is of the essence. As an advisor there is often lots to do, so the more time we have the better. Especially, if someone is in ill health. Many of the tasks can completed while the person is in good health so it’s not just about contacting us at the last minute. With life, we never know when our time is up.
- Even if people’s financial affairs are well organised, it is always best to speak to contact our team.
- What happens if they are too unwell to act? It is best if there is a strategy in case you, or loved ones cannot act on their affairs. We may not be able to assist if the person is too unwell, or perhaps in a coma or suffering from Alzheimer’s. There are documents such as an ‘Enduring Power of Attorney’ which does allows us to provide advice and implement strategies if a person is too unwell to make contact.
- Lastly, there can be large savings. I once saved adult children over $90,000 in tax, because my client called me when she had a week to live. I have written other articles on superannuation’s ‘death tax’ if you are interested to know more.
If you or a loved one ever received this news, please reach out so we can assist.
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Disclaimer
This information is general advice. We have not considered your objectives, personal or financial circumstances. You should consider the appropriateness of the advice for your circumstances before making any decision. You should obtain and consider the relevant Product Disclosure Statement and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.
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This presentation has been prepared and presented by Roger Perrett, Freshwater Wealth Management Pty Ltd CAR no.1307016, Alliance Wealth Pty Ltd AFSL No.449221. This information cannot be used or copied in whole or part without our express written consent.
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