5 effective ways to ensure your loved ones can manage when you pass away

Category: Australia & News

It’s perfectly understandable for you not to like to think about dying. Mortality is fragile, so being forced to confront it can be uncomfortable and unsettling.

It makes good sense that when you have worked hard for your success, and provided support for those who may well be dependant on you, to make sure you have planned your affairs effectively. Good planning will ensure that when you die, your assets can go to the people or places that you desire.

The aftermath of your death will be a stressful and emotional time for your loved ones. But it will be easier for them to cope with if they know that you’ve taken steps to look after them – even if you aren’t there to personally provide protection and care.

Read on to discover five straightforward and effective ways you can ensure your family can manage when you die.

1. Make sure you have a will, and keep it up to date

Making a will is one of the most straightforward financial steps, yet an ABC report in 2021 suggested that up to 70% of Australians don’t have a legally binding will in place.

By setting one up, you can ensure your assets pass to the people you want them to after your death. Once it’s in place you need to keep it up to date, especially in the event of any major life changes, such as marriage of a child, or the birth of grandchildren.

It also avoids any long-term legal wrangling and potentially acrimonious family disputes and means your assets can be distributed in a timely manner.

If you have assets in the UK or other countries, we strongly recommend you have separate wills for each jurisdiction. This can help expedite the distribution of your assets, and probate in each country can run concurrently.

2. Give some thought to who you want to act as your executor

When making your will, you should also give some thought to who you want to act as your executor. They will be the person who is responsible for ensuring the terms of the will are carried out in accordance with your wishes.

Clearly, you may want to nominate your spouse or partner to be your executor. However, given that the responsibilities could prove arduous, you may want to consider appointing someone you trust for the role, especially as your partner may well be stressed and pre-occupied in the period immediately after your death.

You may also think about appointing more than one executor.

In each case, you should ensure your choice or choices are comfortable with the responsibility that will fall on them.

3. Keep a record of all your assets

Having taken steps to ensure your assets are distributed in accordance with your wishes after your death, a good next step is to ensure your family have a good idea of what assets you actually hold.

You should put together a schedule of all your assets and update it regularly so that it’s an accurate reflection of your holdings.

Your schedule should include:

  • Details of all your super funds
  • A note of the property you own
  • A schedule of your savings and investments.

Again, you should make sure that you include any assets you hold the UK and elsewhere.

Such a record will also be of help to your chosen executors, as it’s possible that your will could just refer to proportions of your total assets, rather than itemising each asset individually.

4. Set up an ICE file

Once you have listed all your assets, this list will then help you set up an “in case of emergency” or ICE file.

This will be a file – digital or hard copy – your family can access in the event of your death. It provides them with all the details of your financial arrangements.

As well as your assets, it should also include:

  • Details of all insurance policies you hold including account numbers, contact details, and renewal dates
  • Information about any loans you have outstanding
  • Contact details for key individuals who help you manage your financial affairs such as your accountant and financial planner.

If you aren’t comfortable sharing details of your ICE file while you’re still alive, you should lodge the details with your solicitor, or another trusted individual, with instructions as to how you want it handled when you die.

5. Make sure you insure your life

As well as ensuring your assets are distributed in accordance with your wishes, you should also take the necessary steps to make sure your loved ones are financially comfortable in the event of your death.

One very straightforward way to do this is by taking out life insurance that will pay a lump sum or a regular income to your spouse or partner on your death. This can help make sure they don’t have financial worries and can live comfortably.

The amount of life insurance you should have will be dependent on your financial circumstances. At the very least, it should cover your mortgage, and ideally should provide enough to be able to live free from stress.

Moneysmart have a handy calculator that can help you work out how much life cover you should have.

Get in touch

If you have any queries regarding anything you’ve read here, or would like to discuss your own arrangements, please get in touch with us.

Please note

The information in this article is general in nature. It does not take into account your specific circumstances and should not be acted on without full understanding of your current financial situation, future goals and objectives by a fully qualified financial adviser. In doing so, you risk making commitment to a product and / or strategy that may not be suitable to your needs.

The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.