Documents that can provide peace of mind.
Life admin is one of those things many of us tend to dismiss – whether it’s organising a will, putting life insurance in place or establishing a power of attorney.
Having these essential arrangements and documents in order can provide peace of mind and help ensure your loved ones are looked after if something unexpected happens. Here are a few key areas to consider.
Organising a will
A legal will is arguably the most important document in your ‘life admin’ folder – and a non-negotiable if you have specific wishes for your estate after you pass on.
If you don’t have a will in place when you pass away, it can create additional stress and complexity for your loved ones. Without clear instructions, your assets may be distributed according to government rules, which may not reflect your wishes.
You can get a will written by a solicitor, with costs varying. A Public Trustee may also be able to help you prepare a will, sometimes at little or no upfront cost. If you choose to create a will yourself using a will kit or an online platform, it’s a good idea to have it reviewed by a solicitor or Public Trustee to make sure it’s legally valid and reflects your intentions. It’s also important to review and update your will as your circumstances change – for example, if you get married, have children, or your financial situation changes.
Taking out life insurance
Insurance – whether it’s protecting your home or your ability to earn an income – is generally one of those things you hope you’ll never need. But if the unexpected happens, having the right cover in place can provide valuable financial support and peace of mind.
While people often see home and contents insurance as essential, many become more hesitant when it comes to life insurance. It’s something worth considering, particularly if you have a young family or loved ones who rely on your income, as it can help ensure they’re financially supported if something happens to you.
Life insurance is often grouped with other types of cover, such as death cover (a lump sum paid to your beneficiaries), total and permanent disability (TPD) insurance, and income protection insurance, which can provide ongoing payments if you’re unable to work. These covers may be available through your super fund, or you can choose to take them out separately.
The amount of cover you need will depend on your personal circumstances, including your income, debts and family situation. As a general guide, some people aim for cover equivalent to several years of income, but using a calculator or seeking professional advice can help you estimate what’s right for you.
Getting your super sorted
If you’ve been working for decades and have just left your superannuation to do its thing, you’ll hopefully have a nice little nest egg to take you through your post-retirement years.
At 10-15 years from retirement, you may wish to opt for a growth or balanced strategy, which can net you greater returns. You’ll also need to check your beneficiaries or nominate them, if you haven’t already done so. This is called a binding nomination and if you don’t do it, your super fund trustee will decide who the money goes to after you die.
If you’re self-employed and haven’t been contributing regularly, you may want to explore adding to your super through concessional (pre-tax) contributions. These contributions are generally taxed at a lower rate within super than many people’s personal income tax rate. Contribution limits apply and can change over time, so it’s worth checking the current caps and considering professional advice to ensure your approach suits your circumstances.
Your Power of Attorney and Guardianship
Part of your estate planning should be to establish a Power of Attorney and a Power of Guardianship.
A Power of Attorney is a document giving someone else the legal right to look after your affairs for you and make financial and legal decisions on your behalf. There are several different types, so you may want to explore what’s right for your circumstances and choose a person you trust and likely to be in your life when you need to call on them.
A Power of Guardianship gives someone else the right to choose where you live and to make decisions about your medical care, if you’re not able to make those yourself. You can also put an advanced care directive in place that outlines your needs and preferences for future care, so it’s taken into account if you fall ill or are incapacitated.
Each state differs with how you can nominate a Power of Attorney and Guardianship.
Where to keep your life admin documents
When you have all your documents in hand, keep them stored in a safe place and ensure that someone you trust knows how to access them.
You may want to keep them with other documents in your life admin folder, such as certificates and policies.
A fireproof safe could be a good way to store your documents, or you may prefer to leave them with your solicitor.