By Zac Masters | February 22, 2023
Usually, as advisors, we discuss how we can help you to live your best life. Ways in which we can help you hit your significant goals such as purchasing your first home, funding dream holidays and experiences, helping you to hit your retirement goals and so on. All of these things are important and benefits of financial advice, but one part we don’t discuss too often is the help we can give at the end of life. It’s not a topic we humans like to think about or discuss, but as Benjamin Franklin once said, “in this world, nothing can be certain except death and taxes”.
Last year I was in the unfortunate position of losing a few people close to me, all at various ages and life stages. One of these was my Aunty, who was 62 and whose life was cut short due to cancer. I was appointed the executor of her estate, a role I understood but never had hands-on experience with. However, throughout this experience, some lessons were learnt about how financial advisors can ease the burden of this challenging time.
My thoughts on this were further spurred on by an article a client of mine sent me, stating the difficulty that this lady went through when dealing with the administrative effects of losing her husband and just how she had to deal with the administrative side and the challenges of that whilst still mourning the loss of her husband. Read the news post here .
Throughout the last year and dealing with loved ones who were at the end of their life, along with those who had lost their life partners and were trying to deal with the estate and the next steps, I learned some lessons.
However, when someone may be reaching the end of their life due to illness or other purposes, those around them tend to feel like finances are a taboo subject. Something that they want to avoid talking about. Fair enough. These might be some of the last conversations you have with one another, and you don’t want them to be consumed with talking about money.
From my experience, my Aunty wanted to discuss money. She wanted to ensure that her funds passed to those she wanted to in the most effective and efficient way possible. She had worked hard throughout her life to accumulate her wealth, and when she knew that, unfortunately, she was diagnosed as terminal, she wanted to ensure that her loved ones would receive these in the best way possible.
If you are in this situation but are uncomfortable or want to avoid bringing up money, an adviser can be a great starting point. A good adviser can have these difficult conversations at a hard time in a person’s life. In my Aunty’s case, she sat with another adviser, someone slightly removed but whom she still trusted and was able to have discussions around her wishes for where her funds were to go, whether or not her estate plan was up to date and appropriate and some different strategies to make sure that various taxes were minimised where they legally could be. These conversations provide a financial benefit and a considerable peace of mind benefit.
A good estate plan is vital. Not just for the peace of mind that it leaves the person nearing the end of their life but for those loved ones who are left behind to administer their estate. Who you choose as executor is also essential, as that person will help administer the estate. It can be a good idea to discuss your wishes and what is within your will with your executor as a heads up as well as they will be the ones ultimately fulfilling your desires in the future.
The clearer you are about your wishes, the better they can be carried out. It’s always a good idea to have a proper estate plan with a lawyer specialising in wills and estates. They can also help the executor put the estate in place in the event of your passing. As discussed in many of our blogs, having a good team around you is always essential.
Everyone has had a bad experience at one stage or another; trying to deal with admin teams of big businesses and banks, and superannuation companies can often yield similar results. So it pays to be organised. Throughout this process, it will save you and the person left to deal with your estate time and unnecessary stress. A relationship with an adviser should ensure they have many financial details, such as superannuation and insurance policy numbers and a good understanding of most of your assets.
A lot of time can be spent searching for these if they aren’t readily available. Advisers may also have the authority to discuss your account with the superannuation fund if you have granted them this, allowing them to check on questions you may have and meaning you don’t have to spend time waiting on hold during what will be a difficult time.
Other things that can be important to organise are pre-organising funeral expenses. Again, it sounds sombre, and much of what we are discussing here is, but it will make things easier for those left behind. We could do this with my Aunty, and as sad as it can be, it was nice to plan out what she wanted (and laugh about how terrible her song choices were, way too much Barbara Streisand). Once a person has passed away, the assets will likely become frozen and unable to be used until you have reached probate. You can see how this can be beneficial, especially if you leave behind someone financially dependent.
It’s also beneficial to know where important documents are located. Documents include passports, driver’s licences and certificates of title for properties. Having these will save a lot of time and other details, such as Tax File Numbers, which can often be forgotten.
Through the most challenging times, a good adviser can help remove a small amount of the stress that may be felt. As a result, they can make a harrowing experience easier for those in this challenging position and those left behind. As always, if you have any questions or are going through something like this and would like some help, please email me at [email protected].
Zac is a qualified financial planner at Pekada and host of the Wealth Collective Podcast. Living in Melbourne, Zac has six years of experience in advice and specialises in wealth accumulation and protection strategies. He loves to keep his finger on the pulse for the best strategies for wealth accumulators looking to build and protect their wealth tax effectively. Zac has been featured as an expert in Money Magazine.