In This Issue
Helping your family move on financially (after you have)
There is something about lying outside an operating theatre which gives rise to reflection on one’s mortality. This was the situation in which I found myself last year when, as many of you may be aware, I underwent some emergency gall bladder surgery.
Religious affiliations aside, had I not made it out of the operating theatre, there was some comfort in knowing that our business is protected by a process which would enable it to function fully, and to continue to provide support to you, our clients. In addition, there is significant personal life insurance in place, an up-to-date estate plan and an ‘In Case of Fire Break Glass’ file for my family.
It did occur to me that what I hadn’t considered were the processes my family would have to go through to move on in the event of my premature death – not just emotionally, but financially.
It was this exercise of running a ruler over my own ‘big picture’ planning to identify any gaps which might exist, which prompted me to have a discussion with you, our eGrow readers, about some of the practical considerations which can (at the very least) help to smooth this financial transition for our loved ones.
For example, consider your family’s immediate cash flow needs. In my case, I expect that my family, in traditional Greek style, would go into a full-on emotional shut down, and 40 days of mourning would commence. Given that I normally manage our cash flow reasonably tightly, there might only be a month of cash immediately available. The harsh reality is that the sooner they claim on my life insurance policy, the better off they will be.
As part of this cash flow consideration, therefore, you should have a least one jointly owned bank account as a provision for your spouse to have access to sufficient interim cash flow while probate and other estate matters (including life insurance if applicable) are being finalised. In South Australia, probate (the process of legally proving a Will) can currently take at least 6 weeks; other jurisdictions can be slower.
And if you haven’t done so already, ensure that the title on your family home is in joint names with your spouse, so that ownership vests automatically, which will avoid this important asset forming part of your estate and being subject to probate.
Make sure that all utility accounts i.e., electricity, water supply, telephone, internet etc. are able to be dealt with jointly – a small detail now, but one which will avoid a spouse having to make additional arrangements for the continuity of every day services during a time of grief.
Start an ‘In Case of Fire Break Glass’ file for your family and maintain a dialogue so that they know what it contains, what it is designed to do, and where and how to access it. It should contain, for example, copies of Powers of Attorney, Advance Care Directives, the location of your Wills and details of any insurance policies. It should also contain contact details for your lawyer, accountant and financial adviser, as well as any personal wishes for your final arrangements.
Should those final arrangements also involve specific burial or interment instructions, make it possible for your loved ones to know how to fulfil your wishes by providing them with the related details – for example if an existing burial plot exists, make sure your file contains the relevant title documents.
Your ‘In Case of Fire Break Glass’ file should also include the following:
- original birth and marriage certificates
- certified copies of identity documents, passport, driver's licence
- certified copy of current Wills and all superannuation details
Having these documents on hand to meet the verification requirements of the various agencies and institutions will help to ease the administrative burden and inherent settlement delays for your family; bear in mind too that some organisations can be more bureaucratic than others.
As a Marinis client, however, you will also have the security of knowing that the transfer of superannuation to your nominated beneficiaries, your reversionary income stream arrangements, insurance claims and Centrelink notifications will be managed by us on your behalf. That, after all, is our job – to take away the financial stress so that you can get on with what is important in life, during the good and the sad times. After these and other related processes have been managed, we will, if necessary, draw up a new family financial plan.
My own ‘pre-op’ ponderings made me comfortable that I have planned for my premature demise, but it really did make me realise that even with a great team around me, such an unwelcome outcome will cost emotionally, financially and a lot of other people’s time. I can only recommend planning as much as you can while you are on two feet – because right before going into surgery is probably the last time you want to discover any gaps.
It is my hope that these considerations, which can be uncomfortable to think about when everything is running well, will also be helpful in your future planning.
If you would also like to read a (timely) related article by Melbourne-based journalist and author Dr Muriel Porter, please click here.
And one more thing
Whilst I share with you my contingency planning considerations both from a personal and business perspective, you can be assured that we have plans in place for our clients at Marinis to ensure it is always business as usual.
For now, in the words attributed to Samuel Clemens, more commonly known by his pen name, Mark Twain: “Reports of my death have been greatly exaggerated.”
If you would like to see my recent media contributions, please click here.
As always, if I or any of the team can be of assistance, please don’t hesitate to contact us either via email@example.com or (08) 8130 5130.
Theo Marinis B.A., B.Ec., CPA., FPA®