Getting your affairs in order

Getting your affairs in order

Buying a new home or investing in real estate is a big deal – financially and emotionally. For most Australians, the process is likely to involve taking on significant debt.

According to research published by comparison site Finder, the average loan for owner–occupier home loans taken out in March 2018 was $388,100. For first home buyers, the average figure was $335,400.

Purchasing property – or indeed any significant change in your circumstances – is the ideal occasion to ensure your personal affairs are in good order. Here are a few items to include on your checklist.

Making a will

Around half the population of Australia doesn’t have a will, according to ASIC MoneySmart’s estimate. Pondering your demise is a less-than-cheerful business, but dying intestate – the legal term for dying without a valid will – can result in significant hassle and hardship for dependents and loved ones. In the absence of a valid will, your state’s Supreme Court will appoint an administrator to finalise your affairs and distribute your assets, according to established formulas.

Making a will ensures your assets are left according to your wishes and can be accessed by your dependents without lengthy delays or incurring unnecessary administrative costs.

Expect to pay at least $200 to have a solicitor draft your will, providing your affairs are simple. Alternatively, the public trustee in your state may provide a free service.

Appointing a power of attorney

In conjunction with writing your will, you may wish to consider providing a power of attorney (POA) to a trusted relative or friend. A POA is a legal document that enables an individual of your choosing to take charge of your affairs should illness, injury, absence or loss of capacity mean you’re unable to do so. An enduring POA covers your assets and financial affairs, while a medical POA allows someone to make health-related decisions on your behalf.

Assessing your insurance cover

Insuring your property is a no-brainer, but ensuring your income and lifestyle – and that of your family – are adequately protected should misfortune strike, is arguably even more important. Research suggests many Australians are under-insured and they and their families would face financial hardship – and, in many instances, long term poverty – were they to have a major accident, fall seriously ill, or pass away. Life, income protection and Total and Permanent Disability (TPD) insurance can be vital safety nets to protect you and your loved ones financially during life’s most challenging times. Reviewing your policies regularly will ensure your cover is appropriate for you and your family’s circumstances, including your stage of life and level of financial exposure.

Keeping it tidy

If you’re unable to lay your hands quickly on your mortgage and bank details, insurance policies and other important documents, then it’s unlikely a third party would fare any better if called upon unexpectedly to assist with your affairs.

Collating and storing your important papers in one spot can make it easier for a relative or friend to step into the breach without notice, should they be required to do so.

Share

DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.