How Can I Protect My Family?

It’s something that can easily slip from our ever-growing to-do lists but protecting your family’s future in the event of an accident or untimely death is crucial. We caught up with Louise Arminak, CEO of Life Manager, a Sydney-based business providing professional and personal service packages for every life and business stage, and asked her the most pressing questions about family finances and protection from parents and parents-to-be.

Q: We’ve just had a baby and I can barely manage to get dressed let along manage my finances! What are the top things I need to get organised now that we are responsible for a little one?

Louise: As a minimum, parents should consider organising both a will and life insurance. A will can deal with the appointment of guardians and trustees to look after your children and their inheritance if you die before they are adults. You may also need to obtain life insurance or update any existing life insurance policy to ensure that there is enough money to support your family if you cannot work or you die.

Q: Ok, so why exactly do I need a Will?

Louise: A will is an important legal document that provides how your estate will be distributed. If you die without a will (intestate) your assets will be distributed to your relatives according to a legislative formula. A will also give you the opportunity to appoint an executor who will manage your estate after you die, appoint guardians and trustees for minors, give specific gifts and donations such as to charities and to leave any other instructions you may have about your funeral arrangements. A will can also help avoid a lengthy estate process and minimise estate taxes.

Q: I don’t really have time to research. Can you tell me how to get a Will organised?

Louise: We recommend that you see a solicitor to get your will organised. The Public Trustee can also arrange a will but you should carefully research any ongoing fees and charges that may be payable, particularly if you appoint the Public Trustee as your executor. Do-it-yourself will kits are also available but people often make errors in completing the document, for example, a failure to include an executor, describe gifts or give executors necessary powers. Rectification of errors can result in unnecessary costs for estates and executors may have difficulties in obtaining probate. Solicitors can also provide valuable estate planning advice and draft other useful documents such as powers of attorneys and guardianship instruments.

Q: How much does a Will cost?

Louise: The cost of a Will can vary greatly as it depends on the complexity of the Will and if the Will includes a testamentary trust.

Q: What is a guardian and how do I appoint my child’s guardian?

Louise: A guardian is responsible for making lifestyle decisions on behalf of your children and must ensure that your child is adequately cared for and is responsible for the welfare of your child. Guardians are appointed in your will and it can avoid disputes between family members by making your intentions clear.  The Family Court, however, can remove a guardian or appoint a guardian where it considers such appointment to be in the best interests of the child. It is an important decision and we suggest that you discuss the appointment with your intended guardian to confirm they are prepared to accept the appointment and understand your views and wishes on how your children wish to be raised. As it is sometimes a long term appointment, it is also recommended that the guardian is of a similar age or appoint a substitute guardian in the event your nominated guardian is unwilling or unable to act.  It should be noted that the guardian does not control the assets of the estate that may be held on trust for your beneficiaries, this is the role of the trustee.

Q: What about life insurance? Do I really need it?

Louise: If there are people who depend on you financially, you may need life and income protection insurance, to protect your family in the event of your death or an injury, illness, disablement that means you are no longer able to work. The level of insurance should cover any existing debts such as mortgages, credit card debts and personal loans. You should also consider the other financial needs of your dependents after your death such as education, food, housing, health care and insurance.

Q: I really want to make sure my kids are protected if something should happen to me. Is there anything else I need to know?

Louise: You should check and update any binding nominations made in respect of your superannuation or insurance policies. You should also make sure that any assets are held in a way that can be left to your children. For example, if you hold real property with another person, you should hold your interest as tenants in common rather than as joint tenants if you want your share of the property to be left to another person.

Q: It all sounds a bit daunting. Can you help manage all these things for me?

Louise: Lifemanager has developed a ‘parents package’ as a one-stop shop for parents. Lifemanager has the professional services you may need as a parent to ensure that your affairs are in order and your children are properly looked after in the event of a tragedy. Once you purchase the package and nominate the services you require, Lifemanager’s professionals will contact you to arrange the appointments to avoid any further delays.

Q: What is included in the Parents Package?

Louise: The cost of the package starts from $99 and the total cost will be subject to the number and type of services you require. Lifemanager can organise wills, powers of attorney, guardianship instruments, advice from a financial planner or accountant and even a counsellor to help you deal with post-natal depression and anxiety for new parents.

 

 

This article provides general information only. Nothing in this article constitutes legal or financial advice. You should obtain advice from legal, accounting and financial professionals about your specific needs and circumstances.