Where there’s a will, there’s a relative… and a way to fight over it. That’s the unfortunate story of so many estates these days, where families fall out and even end up trading legal blows to settle the finances of a parent who has passed away.
It’s not just the rich families squabbling either. However with a bit of planning and clear communication, you can distribute your assets the way you want without causing friction or potentially splitting the family.
Here are our golden tips for stopping heirs arguing over your estate.
Play by the rules
The most valuable tool for a quick and effective transition of an estate is clear and legally binding paperwork. An up-to-date will, trusted power of attorney and superannuation and insurance death nominations will provide firm direction for settling your estate.
A will takes effect when you die and generally covers off how your assets will be distributed, funeral directions and any other last wishes. If you pass away without a will, the State Government distributes your estate according to pre-defined rules, so it pays to put it all down in writing with the help of a solicitor.
Get your files in order
Gather your banking, superannuation, insurance and investment details together, along with the contact details of anyone you use to manage your personal affairs. These should be clearly marked and stored in a secure place that your partner and power of attorney can access when you go.
If your partner isn’t actively involved in the financial side of your relationship, now is an important time to get them across your estate, introduce them to any professionals you use and provide access to important accounts. Trying to do this without your help is a headache they really don’t need at an emotional time when they’re coping with your death.
Start the conversation early
Let loved ones know what’s in store and how you plan to divide your estate before you go. This will help to manage expectations and identify any potential areas of conflict that need to be addressed before you pass away.
Nobody wants to believe their passing will cause conflict, but the unfortunate reality is it often does, so communicate your intentions early to reduce the chance of conflict. After all, there’s a good chance you’re the most experienced mediator in the family.
It is a big mistake to use an estate as a bargaining chip to maintain some sort of power over the family.
“Be nice or I won’t leave you anything,” threats are really destructive. It’s way better to be open about everything.
Provide clear instructions
Wills tend to be quite general in language, so try to be specific in your directions, and even provide some background or explanation if you think it will help people come to terms with your decisions.
The key is to avoid confusion or conflict about what you would have wanted by clearly communicating your instructions. A simple letter to the executor explaining your wishes in detail can be a huge help and allow you to say everything you might not have been able to articulate in your will.
Avoid playing favourites
Try to make your estate as fair as possible for everyone involved. If you really want to provide more to one particular person, consider doing this while you’re alive to avoid disputes over the will when you’re gone.
One of the most important legacies of your estate should be to maintain a cohesive and loving family, so make a special effort to find a place for everyone in your estate. This doesn’t necessarily mean money or assets. Instead, think about the sentimental items that provide treasured inheritances to the people who they mean most.
Spending the time to get your affairs in order and communicate your final wishes with loved ones is one of the greatest parting gifts you can give to your family. And helping your parents go through this process might be one of the most important gifts you give to them.
HIGH COST OF HOME LOAN LETHARGY
With so much competition in the home loan market it appears most Australians are not taking advantage of it to get a better deal.
We’re stunned at the new survey from www.finder.com.au which found just 6 per cent of Australians are currently considering switching providers while just 21 per cent have switched in the last 5 years.
By not switching home loans or asking for a discount with their current lender, finder.com.au has calculated these households are potentially wasting a combined $27.4 million per month, $328.2 million per year or a staggering $9.9 billion over 30 years. Based on receiving just 0.10 per cent off the national average mortgage size of $379,400 with the current average variable home loan rate of 5.20 per cent.
And that’s a very conservative figure as we found some people negotiating a 0.8 per cent cut to their home loan rate.
A lot of people are caught between simply being lethargic or believing it is just too complicated to change financiers
But for the average home loan, borrowers could be potentially wasting $23 per month, $280 per year or $8,415 over a 30-year loan term.
Those sorts of savings mean the effort of doing some homework and negotiating a better deal is absolutely worth it.