Planning for my future wellbeing

What will your family and loved ones do if you suddenly lose capacity? More importantly, what do you want them to do and how do you want to be treated?

These are serious questions, which for many Australians are often not given enough consideration and left to chance.

In part three of Talking Financial Wellbeing with Australian Unity, Esther Kerr, Australian Unity’s CEO of Wealth & Capital Markets, encourages people to move beyond the fear that may be holding them back and to have an important conversation with their family about their wishes should they lose capacity, this includes drafting and appointing a power of attorney.

Investing for my circumstances

Transcript

Esther Kerr:

Estate planning kind of can be complex, especially with new family structures and, you know, multiple generations of families coming together and needing to be navigated.

But it doesn't have to be. So I think fear of even taking the first step, if we can get people through that many times, it won't be complicated.

Victoria Devine:

And I've said so many times, I would love that the energy and the time and the effort that you put into setting up your power of attorney, setting up all of these structures is a waste of time.

Esther Kerr:

I get superstitious and I think if you if you do it, then hopefully you will never need it.

Victoria Devine:

I want it to be the biggest waste of time, and I want all the premiums that you pay on insurance to be the biggest waste of money, because that means that you have lived a full, healthy, rich life that has put you in a good position. But you were always protected. There's so much conversation we can have around that, but we'll leave the insurance and the power of attorney stuff here.

Esther Kerr:

I've also been very proactive with both my parents in the last few years, first with both of them getting financial advice, which they could afford but they weren't getting, and then and then wills, estate planning and just knowing they had a plan and knowing they had an advisor and knowing their wills were in order straight away the stress reduced and then my mum got sick and passed away, and so my father's had to do the same again.

Now he's thinking about re-partnering and he said, ‘What do you think?’ And on a personal level, great, he's found a lovely partner. What does that do to his will?

Victoria Devine:

And there's so many things in it. It's not just where does my money go when I pass away. There's so many things in it.

And I feel like when we talk about estate planning, especially in my community, I think a lot of people push it to the side because they go estate planning is for the wealthy, it is for people who have heaps of assets.

Yes. When from my perspective, it's really about leaving a legacy. It's really about making sure that the money that you worked so hard for still values what you're putting forth once you pass away.

So it's about actually creating that legacy, whether you have $50 or $500 million, it's really about going, well, who do I want this to benefit? Who would I want to talk to when I don't have a voice anymore?  And I think that that's where estate planning is to me so important, and obviously not leaving a will is actually a burden on your family. From my perspective, you don't write a will for you.

You write a will for your family, for your friends, so that that process can be easy and kind and gentle, and I feel like so many times we just get a will so that you can put all of your money to work.

What is what's your thought process on that?

Esther Kerr:

I think the benefits I've experience...My mum's will was in order and I'm fairly financially literate and fairly tenacious when it comes to tackling systems.

But I was devastated when she died, so was Dad.

So at that time, the additional burden of, of complex probate and estate management, you just don't need it. You just don't need it.

I also think that having a will benefits you in your life. It's not just for when you've passed away, and the reason it does is because we know that we've got a bunch of Australians whose super balances are worryingly low, often women, for supporting themselves in retirement and old age.

But we also have a bunch of Australians who have plenty in super and who take it to the grave while drawing on the pension, while drawing on other government services that they don't need.

If their affairs were in order, if they had a plan, if the estate was laid out and clear, if they were able to work with their super funds or any anyone that's advising them on how they can draw down on their savings without running out, they having to live a long time, more of them would do so.

So a plan helps you. Who do you want controlling your life? As you get really old, you lose control of so many things potentially where you live even. So if you've put the time into your will, into your estate, into your financial plan, let's not call it advice, early, you get to live the way you want in your last few years.

If I die, having a will is kind of important so that my estate is distributed according to my wishes. But way worse if I don't die, but I'm incapacitated. Because then I'm alive, and I can't express my wishes, and if I haven't given power of attorney to someone I trust, there is no certainty over the care that I will receive, and it is awful for all of my family and dependents who might otherwise need to draw on the resources that I've saved up.

The very permanent disability insurance that I take out with my life insurance becomes administratively awful for them if I'm still alive, but I can't express my wishes and I don't have capacity. So it's a pigeon pair. When you do your will and you get your permanent disability insurance, whatever the phrase is, for three things that go together, you need your power of attorneys. It's a no brainer.

And I hadn't thought of it. If I hadn't thought of it, probably others hadn't.

Victoria Devine:

I think it's so important as well. And, you know, there's so many layers to this conversation that I'm sure lots of us haven't had before, and I think it's also really important to point out that you can have a power of attorney and then you can have a differently appointed power of attorney for the financial side.

You can actually break it up like you might have somebody that you love and trust and care about, but you don't want them to have anything to do with your money and vice versa, and you actually have that power to make those decisions. But you don't know what you don't know, right?

Like, and you can't make those decisions if someone like you hasn't sat down and been like, this is so important, you might have an ‘a-ha’ moment where you go, ‘Oh, actually you're right.’ It would be way worse if I didn't pass away. And it's awful because so many times we just think these things happen to other people and these things aren't ever going to be my reality.

And I've said so many times, I would love that the energy and the time and the effort that you put into setting up your power of attorney, setting up all of these structures is a waste of time.

That would be brilliant.

It has been beautiful talking financial wellbeing with you today. Unfortunately, that is all we have time for today, so we'll see you next time on the next episode of Talking Financial Wellbeing with Australian Unity.