Not long ago we talked about the fact that only 42 percent of U.S. adults currently have estate planning documents such as a will or living trust.. The situation in Australia is quite similar with only 55% of adults having a will.
In this article we’d like to highlight some of the most important findings from a report prepared by Charles Sturt University and The University of Adelaide called “Estate Planning in Australia or: it will never happen to me”. You can find the full report here.
Do you have a current up-to-date will?
44.90% of the respondents do not have a will. Of the other 55% that do have one, only 24% have an up-to-date will. As discussed in one of our previous articles having an outdated will is one of the top estate planning mistakes.
Have you discussed your will?
It’s a positive sign that almost everyone has discussed their will with spouse, partner or family, considering the difficulty of this conversation.
Have you created a pre-paid funeral plan?
Only 13.70% have created a pre-paid funeral plan. This low number might be due to the fact people don’t realize that the funeral could cost to your family up to $20,000.
Do you have Life Insurance?
It’s interesting to note that, according to the report, “individuals in a relationship, with children, and a higher disposable income are more likely to have life insurance.” If you’re one of the 36% that have a life insurance or are planning to have one we recommend to make sure your family will be able to find your life insurance information. This advice is based on our previous research where we found that “millions of families (yes, millions!) have lost billions of dollars”.
Even though the table below shows that almost everyone possesses online assets, only 28% know what will happen to their online assets in the event of incapacitation or death. If you are among the other 72% we advise you to take care of your online assets. You can download our free “Digital Estate Planning Checklist” from here.
Have you prepared a Formal Succession plan?
As we have noted in one of our articles, estate planning is even more essential for business owners. In fact, your business insurance might even require that you have some sort of plan in place to ensure that your business can continue even if you are gone. And by putting your affairs in order you can best protect both your family and your business.
According to the research paper less than 26% of business owners have prepared a succession plan.
We hope this article was helpful!
And don`t forget that you can safely store all of your estate planning documents in AfterVault.com so your family can find them when they most need your vital information.
Disclaimer: We are not lawyers. Please talk to your lawyer if you have any questions or doubts about your situation.
Millions of families (yes, millions!) have lost billions of dollars
Life Insurance. It’s a no brainer right? You pay a small premium every month, and after you’re gone, the family gets a nice windfall to help with costs, be it the mortgage, college tuition, or a nest egg to pass on to the youngsters.
Well, that’s what happens in theory, but theory doesn’t always translate to practice, as shown by an exposé of the American life insurance industry by 60 minutes this year. The program found that billions of dollars in payouts don’t get delivered to grieving relatives after the policyholder dies, simply because they don’t know it exists.
How it works
When your loved one dies, you might think the life insurer will contact you and offer a swift payout, along with their condolences. Not so. There’s no legal obligation for them to make you aware of the policy you’re entitled to, nor to deposit it in your account if you don’t come calling.
Instead, they can hold the policy in stasis, making millions and billions in profit by investing the capital as they see fit. The system is rigged in favor of the company, because the onus is entirely on you do to the legwork of retrieving your money. But what if you didn’t know the policy existed? Tough luck; they can keep the cash.
The real kicker is yet to come; some of the larger insurers actively comb their retirement policy holder database, and immediately stop monthly payouts to the deceased. Because they have access to a master file of deaths across the nation, they can play both sides of the coin.
In fact, as Kevin McCarthy (Florida’s Insurance Commissioner) tells us in the 60 minutes piece, there are cases of the deceased holding both an annuity and a life policy, where the insurance company terminates the annuity, but keeps the life policy without notifying the surviving relatives.
What do they have to say for themselves? 25 of the nation’s largest life insurers have already agreed to pay more than $7.5 billion in “back-death benefits”, but only after being chased by concerned state and federal officials. They have no legal obligation to do so, and that’s the argument put forward by those companies who refuse to break ranks, unwilling to cede the more than $3 billion in unclaimed benefits without a fight. They argue that attempting to retroactively police the insurance companies is a slippery slope, and that they can’t afford to budget in these unexpected costs. Tell that to the folks struggling with car payments and rent after a death in the family.
The take away for everyone is that you must make sure your family knows you have a life insurance policy and they must be told exactly who holds that policy. It’s really that simple and there is a lot of money on the line for your family.
AfterVault is a great way to be sure this information is there for your family when they need it.