At first, it may seem a complicated process but developing an estate plan is the only way to ensure assets are distributed appropriately among beneficiaries.
There are seven main ‘deadly sins’ of estate planning that can derail the efforts taken to ensure that wishes are fulfilled in the event of death or incapacity.
Wrath
Hell hath no fury like men and women scorned.
Divorce and separation, not to mention broken families, make for a complicated estate. Although marriage revokes all previous wills, divorce does not always. Marriage breakdown and remarriage should be triggers to review arrangements.
It is increasingly common for wills to be challenged in court whether by an ex-partner or another family member. In a number of cases, these challenges are upheld. While it is impossible to prevent a challenge, the best way to make it unlikely to succeed is to obtain expert assistance in developing the estate plan.
Greed
While 'DIY' will kits and cheap estate planning services can seem quick and easy, the reality is they are extremely basic and often do not always cover every eventuality.
Those who look for the cheapest way to write a will do so at the risk of compromising on quality. What may save money now, could end up costing later.
Just because a document is in the format of a will, it doesn’t mean it covers everything required – especially if the person completing the DIY will form doesn’t understand how to structure financial affairs or sort out ownership of assets. Estate planning is about advice – the will is just the end product of that.
Simple mistakes can make a will meaningless. For instance, a recent case dealt with a young man who had drafted a new will but not yet signed it. As a result, his estranged partner was still the beneficiary of his entire estate, while his parents and current partner at the time he died received nothing.
Sloth
For many, developing an estate plan is something to do another time. They may think they are too young or that they don’t have enough assets to justify making a will.
The fact is that anyone who has children, is a member of a superannuation fund or who owns their own home should have an estate plan. Choosing to do nothing is something that their families could end up regretting in the future.
Pride
One of the most valuable aspects of an estate plan is the capacity to establish a power of attorney, but it is easily overlooked or ignored.
It can be hard for people to accept that they might not have the mental capacity in the future to manage their affairs. With an ageing population, the number of people with issues such as dementia will only increase – statistics suggest that there will be around 400,000 people in Australia with dementia by 2020 and 900,000 by 2050.
Empowering someone with the ability to make appropriate decisions on your behalf, if required, is an important part of a comprehensive estate plan.
Lust
There have been a number of cases in recent years where children from extra-marital relationships have successfully made a claim on an estate. While it may not be an issue that most need to consider for themselves, there are still lessons to be learnt.
Court battles such as those over the estate of Richard Pratt or Michael Wright highlight the increasing role that courts are taking in awarding significant portions of estates to people who were originally not beneficiaries.
In the case of Mr Wright, a third daughter asked for $12 million from his estate of $800 million but the court decided to award her more than double that amount.
Keep in mind that it doesn’t need to be family members who can make – and win – a claim on an estate. There are examples of neighbours doing what most people would consider to be ‘neighbourly’ acts such as assisting with grocery shopping or simply visiting elderly neighbours being awarded a share in an estate.
Envy
It may seem like a cliché from an Agatha Christie novel, but it is a sad fact that reading out a will can bring out the worst in people.
Previously close-knit families end up in bitter dispute over the contents of a will. People should never assume that it couldn’t happen in their family.
It may be that the will-maker felt there were valid reasons for leaving more money to one child than to another – for example, they may have helped the other child set up a business. Unless this is explained clearly – preferably not just in the Estate Plan but before they die – it can cause significant resentment.
Gluttony
More a sin of omission, perhaps, than a deadly sin, but people shouldn't forget philanthropy when establishing an estate plan.
Many like the idea of leaving something to charity in their will as a bequest or even setting up a foundation to continue their philanthropic activities after their death. It’s something that is easy to forget. This is another area where getting expert advice can help ensure all their wishes are carried out after their death.
Someone asked the other day,
'What was your favourite fast food when you were growing up?'
'We didn't have fast food when I was growing up,' I informed him, 'All the food was slow.'
'C'mon, seriously. Where did you eat?'
'It was a place called 'at home,' I explained!
'Mom cooked every day and when Dad got home from work, We sat down together at the dining room table, & if I didn't like what she put on my plate, I was allowed to sit there until I did like it.'
By this time, the kid was laughing so hard I was afraid he was going to suffer serious internal damage, so I didn't tell him the part about how I had to have permission to leave the table.
Here are some other things I would have told him about my childhood if I figured his system could have handled it:
Some parents NEVER owned their own house, wore Levis , set foot on a golf course, traveled out of the country or had a credit card.
My parents never drove me to school. I had a bicycle that weighed probably 50 pounds, and only had one speed, (slow).
We didn't have a television in our house until I was 10. It was, of course, black and white, and the station went off the air at 11, after playing the national anthem and a poem about God. It came back on the air at about 6 a.m. and there was usually a locally produced news and farm show on, featuring local people.
I never had a telephone in my room. The only phone was on a party line. Before you could dial, you had to listen and make sure some people you didn't know weren't already using the line.
Pizzas were not delivered to our home, but milk was & so was bread.
All newspapers were delivered by boys and all boys delivered newspapers -- my brother delivered a newspaper, six days a week. He had to get up at 5 AM every morning.
Movie stars kissed with their mouths shut. At least, they did in the movies! There were no movie ratings because all movies were responsibly produced for everyone to enjoy viewing, without profanity or violence or most anything offensive.
If you grew up in a generation before there was fast food, you may want to share some of these memories with your children or grandchildren. Just don't blame me if they bust a gut laughing.
Growing up isn't what it used to be, is it?
MEMORIES:
My Dad is cleaning out my grandmother's house (she died in December) and he brought me an old Royal Crown Cola bottle. In the bottle top was a stopper with a bunch of holes in it. I knew immediately what it was, but my daughter had no idea. She thought they had tried to make it a salt shaker or something. I knew it as the bottle that sat on the end of the ironing board to 'sprinkle' clothes with because we didn't have steam irons. Man, I am old.
How many do you remember?
Head lights dimmer switches on the floor.
Ignition switches on the dashboard.
Pant leg clips for bicycles without chain guards.
Soldering irons you heat on a gas burner.
Using hand signals for cars without turn signals.
Older Than Dirt Quiz:
Count all the ones that you remember, NOT the ones you were told about.
Ratings at the bottom.
1. Candy cigarettes
2. Coffee shops with tableside juke boxes
3. Home milk delivery in glass bottles
4. Party lines on the telephones
5. Newsreels before the movie
6. TV test patterns that came on at night after the last show and were there until TV shows started again in the morning. (there were only 3 channels!! [ if you were fortunate])
7. Peashooters
8. Howdy Doody
9 . 45 RPM records
10. 78 rpm records
11. Hi-fi records 33 1/3 rpm
12. Metal ice trays with lever
13. Blue flashbulb
14. Cork popguns
15. Studebakers
16. Wash tub wringers
If you remembered 0-3 You're still young
If you remembered 3-6 You are getting older
If you remembered 7-10 Don't tell your age, &
If you remembered 11-16
You're Lucky
Those memories are some of the best parts of our lives….
Don't forget to pass this along!!
Especially to all your LUCKY friends😀