When it comes to estate planning, everyone’s circumstances are unique – which, incidentally, is why it is so important to get an experienced lawyer to draft your Will and not just buy an online Will pack (which basically provides the same level of security as writing your will on a napkin). However, there are certain life milestones that fundamentally change what happens to your ‘things’ when you die.
In the coming weeks, we will be releasing articles under the theme of Estate Planning Milestones – at every age! Today, we talk about what is relevant for 18 to 29 year olds.
Generation Z, we’re looking at you.
Didn’t think you needed a Will yet did you? Wrong. And for the parents reading this, read on, this affects you too!
It's Time to 'Adult'
(Yes, we just used the word adult as a verb).
Let’s face it, unless fortune has smiled on you (or you have received an inheritance or gift from a family member), you will probably still be living at home with the folks until at least your mid-20s.
You might not think so, but if you are in this age bracket you almost certainly have some ‘stuff’ to protect, and I’m talking about more than your car.
So much happens in these early ‘adulting’ years. One of the biggest things – you get a job.
And in this beautiful land we call Australia, that means you will also have….superannuation!
And if you have superannuation, it’s quite possible that you also have a default level of life insurance held with that superannuation, that will be paid out should you pass away.
“Sure. Sounds great, but who cares, I’ll be dead anyway by the sound of it!”
Yessum. But, here’s the kicker, under superannuation law, there is only a small category people who can receive ‘superannuation death benefit’ (i.e. that chunky payout) after someone dies. Most commonly, those categories are confined to a husband/wife/defacto spouse or your children.
“But I’m only 26 – I’m not married or have children!”
We hear you.
But, in most cases for young adults, when they fill out their superannuation death benefit nomination (read: the boring paperwork you have to fill out when you first get a job), they write the name of their Mum, Dad, sister, brother etc. All of whom, are invalid nominations (meaning they can’t get that money if you die).
“Not me, my fund would have told me if my nominees were invalid!”
Nope! The superannuation fund probably won’t tell you if it is invalid…until you have died and your family look to them for the payout. Then your family are left with the monumental hassle of dealing with it, and in some cases, the money is paid to the person or people that you would not want to receive it!
“So how do I make sure my mum and dad or my siblings get my superannuation payout if I die?!”
Easy. Do a Will. You will also need to do a valid Death Benefit Nomination to your legal personal representative (i.e. the executor of your Will).
“Won’t that cost me money?”
Um, yes… But, do you pay car insurance? Think of the money spent on a Will as a form of insurance – insuring (get it… ensuring) that your wishes are fulfilled in the (hopefully unlikely) event of your death.
Let’s put it this way, you’ll need a Will one day, so you may as well get it done now and gloat about how sophisticated you are at life admin.