Tag Archives: Estate Planning

Who’ll inherit your family heirlooms, if not your kids?

By Robert Wright /November 23,2017/

If you’re a baby boomer, you may be considering passing down some of your treasured possessions to your children or grandchildren—especially if downsizing your home is on the horizon.  If you’ve already made the assumption that they’ll be willing recipients, you could be in for a surprise.

Increasingly, younger generations aren’t interested in inheriting such items. In fact, possessing lots of ‘stuff’ is out of fashion, leaving many parents to think about where their heirlooms might end up.

 People, priorities and tastes are changing

Just a generation or two ago, younger family members were grateful to receive the solid oak dining table and silver gravy boat—seeing such possessions as an extension of themselves and their family’s past.  However, with the rise of the internet, younger people today more often identify with their social profile than they do family objects from a bygone era.

The Australian dream of owning a house is also less achievable, as prices rise, leading an increasing number of people toward apartment living and leaving less room for family collectibles.  Being tied down by boxes filled with historical items is also not practical for people who are opting to work and travel abroad, but it isn’t all just about the inconvenience.  Over time, tastes and fashions change. Minimalism is in and clutter is out—and shelves that were once filled with ornaments and trinkets have been replaced by clean white walls.

 How to part with your prized possessions

It can be a struggle to accept that your children don’t want to hold on to items that have sentimental value to you. It’s not that they don’t love you—they just may not love your stuff.  So, how can you do a clean out without your past being lost?

• Ask your children to pick one or two items—no matter how small—that they want to keep.
• Consider donating big items, like furniture, to local shelters, hospitals or charities. There’s always someone in need who can benefit.
• Scan photo albums onto the computer to create a digital photo book which can be stored online. This way it can be shared with all your family without taking up physical space.
• Consider selling those items that you no longer want, need or have room for. Popular selling sites such as eBay or Gumtree can make it very easy.
• Finally, if you are going to sell any items, make sure you research their value first as you may be selling something of great value.

Looking beyond just your heirlooms

Finding a good home for your prized possessions is important and something you want to think about. What you do with your wealth and other assets down the track will also require thought. Addressing such things early on can give you peace of mind and discussing things with your family could avoid any possible controversy down the track should people not agree on things.

 

Source: AMP

Should you lend money to family?

By Robert Wright /June 26,2017/

You’re probably fairly used to helping your family out with a little extra cash here and there. Whether it’s pocket money for doing chores, or money to pay phone bills, go see a movie or buy clothes, for example.

But what happens when they put their hands out for help to buy the big ticket items? They might want some money to buy a car, pay for a holiday or even get a deposit together to buy their first home.

The question is, even if you can afford to help your family financially, should you? It could provide them with a helping hand that’ll really make a difference, but you also must ensure your needs are looked after and you’re not leaving yourself short.

Here are some things to think about:

• Discuss how the money is going to be used. Is it something they could save up for or do they genuinely need your help?
• Decide if you want the money back. Even if you can afford it now, think about whether you might need the money for other expenses or commitments later.
• Agree on the terms of when and how the money will be repaid. If you decide on a loan, discuss how and when the loan could be repaid by, plus whether you will impose any sort of penalty (such as interest), if it’s not repaid on time.
• Write it down. This might sound overly formal, but it sets the ground rules for making a true commitment to repay the loan.
• Talk early and often to identify potential issues as they come up. Don’t wait until minor issues, such as late payments, become more serious.
• Give them a refresher on managing money. This is a good way to really embed the principles of needs versus wants. Ask your family to work out how much they could put aside by using a savings calculator or budget calculator.
• Ask for advice. If you’re lending a significant amount of money, you might want to check with your solicitor if there could be legal repercussions, including what happens to the loan if your child gets married or is in a de facto relationship.

Providing financial support in other ways

Gifting

It’s great, tax-free way of helping your family when they need financial help.

Just make sure you think carefully about whether your gift will put a dent in your retirement savings and if you’ll have enough for the lifestyle you want to lead when you wind down from work.

Also consider the impact on your Centrelink entitlements. If you’re receiving benefits, such as the Age Pension for example, a loan or gift to your child may impact on your payments and your financial security. You must tell Centrelink about any gifts or transfers within 14 days of when they have occurred.

Going guarantor

This is one way to help your family own their tomorrow ─ whether it’s buying a car or first home, but be careful not to put your own home or lifestyle at risk in the process. Make sure you only go guarantor for an amount that you can comfortably afford to pay if your family defaults on payments.

What else to consider

Whatever option you choose to help support your family:

• Make sure the loan or gift is within your budget and won’t affect your everyday lifestyle or retirement.
• Consider taking out insurance to cover you, or your family member, in the event of unforeseen circumstances.
• It’s a good idea to get in contact with your financial adviser. Contact our office for more information

Source: AMP.

Why insurance is important – real benefits for you and your family

By Robert Wright /March 02,2017/

Insurance is all about protecting what you have now and what you need to have in the event of the unexpected.

As you travel through life, the protection you need is likely to change.  The key to selecting the right insurance is understanding your present needs and making sure you have both the right sort and level of cover.

Being over-insured is a waste of money, but it is also a financial risk to have too little insurance in place. With this in mind, let’s look at the types of insurance that may be particularly relevant to each life stage.

Just starting out

If you’re just starting out in your career, you probably recognise that it is important to insure valuable assets such as your car. Your most valuable asset however, is your ability to earn an income over your lifetime. As your income starts to rise, or you take on more debt, such as a home loan, it becomes more critical to have the right levels of income protection insurance and possibly life cover in place.

The family years

Once you have a partner, and potentially begin a family, life and TPD insurance becomes especially important. It is essential for your family to be able to survive financially if you were to pass away unexpectedly, or become permanently disabled. Even if only one of you is working, it’s important for both parents to have appropriate life and TPD cover in place – not just the major bread winner.

While raising a family, our financial commitments are often at their highest. This makes income protection insurance particularly important.

As you age, the likelihood of experiencing medical conditions such as heart attack increases, making living insurance worthwhile. Living insurance will provide an additional lump sum to assist with medical and other costs in the event of serious illness or injury.

Empty nest

More Australians are choosing to work until much later in life, and if that sounds like you, income protection insurance remains relevant until you hang up your work boots.  While your children may have grown up and be establishing lives of their own, life insurance can continue to play an important role.

Five reasons why insurance matters

Why is insurance important? Let’s look at five key reasons.

1. Protection for you and your family

Your family depend on your financial support to enjoy a decent standard of living, which is why insurance is especially important once you start a family. It means the people who matter most in your life may be protected from financial hardship if the unexpected happens.

2. Reduce stress during difficult times

None of us know what lies around the corner. Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave you and your family facing tremendous emotional stress, and even grief. With insurance in place, you or your family’s financial stress will be reduced, and you can focus on recovery and rebuilding your lives.

3. To enjoy financial security

No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance offers a payout so that if there is an unforeseen event you and your family can hopefully continue to move forward.

4. Peace of mind

No amount of money can replace your health and wellbeing – or the role you play in your family. But you can at least have peace of mind knowing that if anything happened to you, your family’s financial security is assisted by insurance.

5. A legacy to leave behind

A lump sum death benefit can secure the financial future for your children and protect their standard of living.

Insurance is important for your financial wellbeing so it’s worth speaking to an expert who can recommend the insurance solutions that are right for you and your family.  To explore your options, please contact us.

 

 

Source: BT

How to cope with losing independence

By Robert Wright /March 02,2017/

If you or a loved one is experiencing a loss of independence, you may be able to maintain a sense of control.

Few, if any of us, look forward to losing independence. In fact, research reveals that 75% of older people feared losing independence while only 29% feared dying[1]. It also revealed that 44% were worried about moving into an aged care facility.

Whether a physical, social or emotional reason prevents complete independence, it generally brings a sense of loss.

Understanding the cycle of loss

As people age, the loss of independence can stem from physical and mental changes, and social and emotional effects that dramatically alter day-to-day life.

For example, physical changes like diminishing vision or a loss of hearing can interfere with the performance of simple tasks like driving, walking long distances or communicating in general. Mental impairment can cause people to lose the ability to perform everyday tasks and become forgetful.

Such changes increase the need for help from others and add to feelings of dependence and inadequacy, while lowering confidence and stopping some people from participating in enjoyable activities. The overall impact can increase feelings of frustration, anger, guilt and isolation.

Adding to the burden may be well-intentioned loved ones who place restrictions on the person losing independence out of concern for their wellbeing. And the need to accept help often reinforces feelings of helplessness.

Increasing a sense of control

We all have a common need to retain some sense of independence and dignity while feeling we are making a valid contribution.

Some people facing a loss of independence may have previously been quite dependent on others—perhaps never holding a driver’s licence and relying on friends and relatives to drive them around.

But for many, a newfound dependence on others can be very difficult. The more capable and independent a person was in the past, the greater the loss experienced.

There are things you and your loved ones can do to increase the sense of control:

1. It’s your life, keep control

If you are experiencing a loss of independence yourself, make sure your loved ones know how you feel and what you need to live a life that continues to have meaning for you.  For example, if you feel loved ones are micromanaging your every move, let them know how they can help you feel more independent and how they can support you to exert your right to make choices.

If the loss of independence is getting you down there are also support services available like Beyond Blue (P: 1300 224 636) or My Aged Care (P: 1800 200 422).

2. Loved ones, be reactive not too proactive

If your loved one is experiencing a loss of independence, it’s understandable for you to be concerned about them. It can be tempting to take the initiative and provide help, but it may be more effective in the long run to first speak with them, if possible.

The two most important questions you can ask are whether they need help and how it would be best for you or others to provide it. Letting your loved ones have a say in the help they receive can ease the emotional impact.

3. Facilitate

However you end up helping—and you may feel that you’re walking on eggshells sometimes—take care with how you go about it. If you’re able to facilitate a conversation so your loved one comes up with their own solutions and ideas, it’d be a better outcome for them, and possibly the most generous thing you can do.

4. Encourage

If possible, encourage your loved one to keep pursuing their passions or find new hobbies. Help them maintain their relationships with family and friends too. Perhaps you can help by finding activities they may be interested in.

Seeking knowledge and assistance

If you or a loved one is experiencing a loss of independence, you may benefit from further information about aged care. Please contact us for further information.

 

Source: AMP

[1] http://www.dlf.org.uk/blog/losing-independence-bigger-ageing-worry-dying