Roll up your sleeves ladies sh!t is going to get real in this post because we are going to talk about estate planning. I know you’ve got this, hang in there. I’m going to keep this as painless as possible but like the title of this post: 'Estate planning is fun, said no one, ever, in the history of the universe.'
I’m not going to lie; I may have been procrastinating on getting this post out.
Estate planning is not something that gets me all gooey and excited, but it was something that kept me up a little at night so I knew I had to take care of it.
For the mamas and the pappas out there, I know I’m not telling you anything you don’t already know but for those of you who don’t have kids, I will tell you that having kids compels you to do things you never thought you would. Things that weren’t on your radar pre children suddenly become a compelling reason to take action.
A few stories come to mind but I will just share one with you quickly. When I was pregnant with my first daughter I went into full-blown nesting mode.... I mean we bought a house. Everything had to be ready and prepared for when I had the baby. I will never forget one incident when we had just moved into the house and Louis, my partner was doing some pruning in the front garden. Well, a little bit of pruning turned into him basically chopping down a couple of trees. I can laugh about it now but I was absolutely devastated that he did this; I mean sitting in the shower, ugly crying devastated. Oh man! The hormones when you are pregnant are no joke!
Poor Louis, I don’t think he had ever seen me so upset. And I don’t think I have ever seen him so proactive in solving a problem. He was straight down to the nursery to buy new plants to put in the front garden and restore some peace and sanity to our house.
The point was, I needed everything to be in order for the arrival of our daughter.
So after having our baby I started to think about needing a will. Now, I’m a bit embarrassed to say this but I know many of you are probably in the same boat, so I’m sure you won't judge me too harshly for saying; it was only this year that we finalised our estate planning.
After having our second baby, we had to move back to Melbourne for Louis’s work. Moving house with a newborn is not fun. I don’t recommend it! Once we were back in town, I finally bit the bullet and started to take action towards getting our wills done.
We had engaged a new accountant and they had a law firm they partnered with, so we made an appointment to see them and discuss our options. This cost us about four or five hundred dollars for a one-hour appointment! Lawyers know how to charge for the value they offer!
They explained the difference between getting a standard will or getting a testamentary trust set up. A testamentary trust is a trust that comes into effect when you die. There are some tax benefits to do this, especially when you have a large estate, but this is something I suggest you get the experts to explain.
They also went through why we might consider having a power of attorney and a medical power of attorney. They are two separate roles.
A power of attorney has the power to act on your behalf if you lose the capacity to. For example, if you are in a critical condition, they can make decisions on your behalf or access your bank accounts and other such things. The reason you might want to appoint someone to do that is because once you have lost the capacity to act on your own behalf it is much harder to set up for someone else to do that for you. A medical power of attorney is someone who can make medical decisions on your behalf. Again if you were in a critical condition in hospital, no one can make decision on your behalf until they organise the medical power of attorney and this isn’t something you can just phone up and get. In medical situation you want to be able to act fast.
When you set up your will, you also have to specify who will be the executor of the will. This means the person who will manage the affairs of your estate when you pass. In addition to this you need guardians for your children and back up people for all the rolls I just mentioned. Not only this, you also need to nominate an alternative person/s who you will pass your estate on to, in the event that the people you already have left it to die before you or at the same time.
Oh dear, thinking about this and working out 'who I want to look after my children?', 'who do I trust to distribute my estate?', 'who do I trust to act on my behalf if I am incapable?' are not fun topics to ponder!
When we had the first appointment with the lawyers they informed us what information they need to proceed and made a joke about how we would be surprised how many people take years to finalise their estate documents. We laughed and thought why would you take that long? Well, a bit over a year after we had that first appointment we finally got back to the lawyers with the information they needed. We were those people! And now I understand why.
Listen, I did not find making our will a fun affair. In fact I avoided preparing it and it took us a long time to make decisions about who we would nominate to fulfil the various roles; as you actually have to put yourself in the position of thinking, 'if I died next week, what do I want to happen?' I can tell you now, I am so glad we have it all done and finished.
I’m curious who is going to read this post. I don’t think there are a tonne of people thinking 'yay! Estate planning, I love it. I really want to learn about it'; but this is the cycle of life, right? People die. There is no deigning it. I hope it’s not going to be me but I sure as heck know if it is me, I want to do everything in my power now to make sure my babies, well they are not babies anymore but nevertheless, as uncomfortable as the process was for me I want to know that I have everything set up in place for them. Like I said at the start of this post, I have a compelling reason to feel this discomfort. My compelling reason is my daughters.
Here are my suggestions. Look up estate lawyers in your local area or city. There are lawyers who specialise in this. Let them guide you through what is required. They are professionals and they will advise you of all the points you didn’t even realise were points you needed to attend too!
Scott Pape in his book The barefoot investor for families has a whole section on getting your affairs in order. He has a great suggestion which, I haven’t done yet but intend to and that is to create a folder with your will and important documents in it. Including all your passwords for your email, social media, bills and banking in it too so your love one has access to this straight away if you pass. It’s one way to make life easier for them when they are trying to get through a challenging time. He also suggests a fire and waterproof safe to store these documents in. However, the one he recommends from Bunnings, an Australian hardware store is too small in my opinion as it is slightly smaller than A4 which makes it a bit hard to store you paper documents in. I’m yet to find a suitable one as the next size up is a bit too big to be able to pick up quickly in the event you needed to get out of the house in a hurry during a bush fire or something of that effect. The point of storing them in a safe is to protect the documents from perishing rather than protecting the documents from theft. Hence, why it is good to have one with a handle that you can pick up.
Oh my gosh today has been a bit heavy I know. If you are still with me, good on you! It goes to show you care about getting your sh!t together. I feel like making a will is the ultimate adult behaviour. There is no turning back now, I have kids, I have my estate in order, I am officially adulting! Okay so I realise that is not the correct use of that word but can we make it a verb please?
Thanks for hanging in with me for this one. It’s a tough one but you can do it. Get your financial affairs in order. Organise your will and powers of attorney.
You’ve got this!
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