“It was my fear of failure that first kept me from attempting the master work. Now, I’m beginning what I could have started ten years ago. But I’m happy at least that I didn’t wait twenty years.”
- Paulo Coelho
Preparing your estate planning and considering what would happen to your family and loved ones if you were to pass is typically not an exciting topic for most, and very rarely is it high on the list of priorities. This is very clearly evidenced by the sheer volume of people that pass away without a valid Will, and can become even more problematic and complex for Australian expats living and working abroad with assets in multiple countries.
This week I explore the 8 most common estate planning mistakes that I see Australian expats making that could often easily be avoided with some prior planning and simply taking action.
1. Only having a Will back home in Australia
If you’re an Australian expat living and working in Singapore, and you only have a Will in Australia, then chances are this may cover your assets here given that both countries operate under the same system of law. However, it’s important to recognise that if you hold assets in both countries, then your Executor would need to receive a grant of probate in Australia, execute your wishes on your assets back at home, then proceed to fly to Singapore and after paying the relevant fees to have your Will validated here which can often be in the thousands, if not tens of thousands, proceed to carry out your wishes stated in your Will on your Singapore assets. As you can imagine, this process can be both very expensive and time-consuming, which may create an unnecessary burden on your surviving family members.
If you do hold assets in multiple countries, then it would be wise to consider your options and decide whether you should in fact have multiple Wills in multiple jurisdictions. It’s also important to consider whether any trusts such as a Testamentary Trust or Special Disability Trust that you may have included in your Australian Will would be valid for your global assets.
2. Not arranging your Power of Attorney
If you become incapacitated during your lifetime, you can generally nominate a power of attorney to make financial, health or a broader range of decisions on your behalf should you be unable to do so. This is an important document to have in place to ensure that someone you trust will be in a position to make decisions on your behalf. In Australia, this is typically referred to as an Enduring Power of Attorney.
It’s also important to recognise here that an Australian Power of Attorney document would often not be valid overseas and this is typically the case for those in Singapore. You would need to have a separate Power of Attorney document in Singapore to nominate someone here to make these decisions on your behalf.
3. Putting it off to another day
A simple but all too common occurrence is that many will simply put off their estate planning to another day, assuming that nothing is going to happen in the short-term so there is plenty of time to think about it. It’s often the case that something that can be done at any time, will often never get done at all. When it comes to your estate planning, start early and ensure that you and your loved ones have the right documentation in place.
4. Ignoring the tax implications of your wishes
While there may not be any inheritance tax or death duty in Australia, it’s important that you don’t simply ignore tax implications of your estate planning altogether. For Australian residents, this could include tax on any superannuation or insurance benefits that are received by someone who is not a dependant, or any capital gains tax on assets that are to be sold as part of your estate planning for benefits to be paid out.
When it comes to Australian expats with assets globally, particularly if your partner or other beneficiaries are not Australian this can often become far more complex. Your beneficiary’s nationality and country of residence could have a significant impact on the potential tax liability, so it’s important to seek appropriate advice when it comes to this area.
5. Assuming that superannuation is covered by your Will
When it comes to your superannuation, it’s important to have a separate nomination of beneficiary in place. You could nominate to have your superannuation to be paid to your Estate upon your death, or to a superannuation dependant as a binding or non-binding nomination. It’s important to ensure that your superannuation nomination is up to have and that you have the right instructions in place for your wishes to be carried out.
6. Forgetting to update Wills
A reality of life is that change is often the only constant. Whether it be divorce, separations, changing business arrangements or otherwise, it’s important to regularly review your Will and other estate planning documents and ensure that the instructions are reflective of your current wishes. It’s also important to be aware of any implications of a change such as marriage or having a child could have on your current set of instructions.
7. Specific or broad
When it comes to outlining your beneficiaries in your Will, many make the mistake of being far too specific which often results in certain people being left of the inheritance. For example, an instruction such as listing grandchildren by name as opposed to stating “any grandchildren that survive or outlive me” could mean the difference of all grandchildren being included in the inheritance or some being excluded unnecessarily. Of course, if you would prefer to leave some grandchildren out, then this is entirely possible by naming only those you want to be included.
8. Not keeping a list of assets and their locations
It’s important to keep a list of your assets and at least an indication of where they are located to make the task much simpler and more seamless for your Executor. One of the most common and costly mistakes, particularly for Australian expats with assets all over the globe, is that they don’t list their assets such as which banks they hold cash with, and it’s therefore up to the Executor to work this out. What this often means is that a lawyer will be engaged to track down the bank accounts, involving a letter sent to each financial institution which can cost tens of thousands in legal fees to pay for their time and expertise to carry out this task.
By keeping a list of these items, and even social media accounts for example, this can save your surviving family members a great deal of heartache and expense at an already difficult time.
Remember, it’s never too early to start considering your estate planning.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.