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 those important life affairs and legal documents in order can give you peace of mind, and it can ensure your loved ones are taken care of if anything happens to you. Here are a few things 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 may leave a costly mess for your loved ones to sort out and could mean your assets are divided in ways you may not have wanted – as decided by the government.
You can get a Will written by a solicitor (costs range, but around $500), or you can get a Public Trustee in your state to do your Will, which may be free. If you decide to do it yourself using a Will kit or online platform, have it checked by a solicitor or Public Trustee to ensure it’s legally binding and valid. Don’t forget to update your Will if your life circumstances change, too.
Taking out life insurance
Insurance – whether it’s for your home or your ability to work – is generally is one of those things you hope you’ll never need. If the unexpected happens, it can be the safety net you’re glad you’ve got.
And while you may think home and contents insurance for your house is a no-brainer, many of us hesitate over getting life insurance. It’s important to consider, especially if you have a young family or loved ones relying on your income, so you can make sure they’re taken care of in any eventuality.
Life insurance is often bundled together with other insurances: death cover (which is a lump sum payment your beneficiaries receive if you die), total permanent disability insurance (or TPD), and income protection insurance (if you’re unable to work). These may be offered as an optional part of your super fund, but you can also take out insurance separately.
How much to get? Experts suggest around 10-12 times your annual income or you can use a calculator for an estimate.
Getting your super sorted
If you’ve been working for decades and have just left your superannuation to do its thing, you 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 your super needs some love, you might want to consider adding to it with concessional, pre-tax contributions (which are then taxed 15 percent in your super fund; a figure much less than your normal tax rate). You can contribute up to $25,000 to your super each year, including any superannuation guarantee contributions made by your employer, but it’s always worth checking with a financial adviser to check what suits your personal 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.
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.