Estate Planning is more than simply writing a will, or ticking the organ donation box on your driver’s licence form.
Of course, estate planning is partly about who gets your various valuables when you die. However, it’s also about who will make important financial or medical decisions for you if you’re no longer able to.
We recommend that you consult a professional in this area before you make decisions or take any action.
There are a few things to think about in the area of estate planning, which come under 2 main categories:
- Life insurance
4. Power of Attorney
5. Advance Care Directive
It’s a matter of a few logical steps. Let’s go!
Since we’re a super fund, let’s start there…
Your super isn’t automatically paid to your estate when you die. Super’s sole purpose is to help support you in retirement (and your beneficiaries if you die). Because of that, rules are in place to stop super automatically being lumped in with the rest of your property where it could be swallowed up in paying debts or other commitments.
If you’re an ElectricSuper member, and you haven’t nominated who will receive your super if you die, what happens to your super will depend on the scheme you’re in.
However, you have the option to nominate a beneficiary. Your beneficiary is someone who will receive some or all of your super if you die (depending on your scheme). It means that you have the power to let us know who should receive your super. We’ll talk more later on about how you nominate a beneficiary.
For now, let’s cover what happens if you don’t let us know your nominated beneficiary or beneficiaries.
The ElectricSuper Rules outline how your super will be paid if you die:
|Division 5 Accumulation||The ElectricSuper Trustees will decide where your super goes.
It could be to your spouse and/or to your children. Or it could be to other family members, your estate or other dependants. It will depend on the information about you that the Trustees have when they review your situation.
|Division 2 Lump Sum||If you have a spouse when you die, your spouse will receive a benefit. Where you have more than one spouse (for example, a spouse you have separated from but not divorced yet and a new de facto spouse), the benefit is shared between them in the ratio the Trustees decide.
If you die with eligible children, the child or children will receive a pension. It’s automatically calculated, whether you also have a spouse or not.
When you have no spouse or eligible children when you die, your estate receives your super benefit as a lump sum.
|Division 3 Pension Scheme||If you have a spouse and/or eligible children when you die, your spouse and/or children will receive your benefit, typically as an ongoing pension payment.
In the event that you have more than one spouse (for example, a spouse you have separated from but not divorced yet and a new de facto spouse), the pension will be shared between them in the ratio the Trustees decide.
No spouse or children – your estate receives your super benefit in a lump sum.
|Division 4 RG||The Trustees will decide how your super benefit will be paid, whether to your spouse, children, other dependants or your estate.|
If you want to nominate who will receive your benefit
If you want to tell us who should get your super, complete a Binding Death Benefit Nomination form. When you die with a current, valid nomination in place, it’s binding on the Trustees of ElectricSuper. It means they are legally bound to pay your super benefit to those you nominate. You choose who gets your super money.
A valid nomination lasts 3 years, but you can change or cancel your nomination any time. We’ll remind you every 3 years to remind you to complete a new nomination.
Along with nominating specific people, such as your spouse or children, you can also nominate your “legal personal representative”. Typically, your legal personal representative is the executor of your will. Nominating them means the payment will be made to your estate for them to distribute as they deal with distributing the rest of your estate. If you die without a will and you have nominated your legal personal representative, your property, including your super, is distributed in line with the rules of intestacy.
2. Your will
Writing a will is a cornerstone of estate planning. It’s usually the thing people think of first when they hear about estate planning. A will is a legal document which includes your instructions for your possessions and responsibilities after you die.
Depending on how complicated your situation is, you may or may not need a lawyer’s help with writing a will.
Council of the Ageing South Australia (COTA SA) and Legal Service Commission can provide free advice on general legal matters, including simple wills. There are also do-it-yourself will kits available online.
For a simple will, employing a lawyer should cost somewhere around $250, according to the Legal Services Commission of South Australia. The Public Trustee can prepare wills at no upfront cost for eligible people (but will take a fee to then act as your executor).
If your situation is more complicated, the Law Society of South Australia provides a referral service for solicitors who can prepare wills and do home visits, if you need this.
You will need to nominate an executor (or executors) to carry out the instructions in your will, including financial matters such as paying funeral expenses, distributing your assets and finalising your debts. They may also need to look after the admin related to your death, such as making the funeral arrangements, and applying for the death certificate and for probate.
3. Life insurance (outside of super)
Not everyone has insurance outside of super, but it can be an important part of estate planning. If you die, the life insurance company may need to do some due diligence and will need to receive all the required documentation before they can make payment to your beneficiary.
If you have life insurance but can’t remember who you nominated as your beneficiary or beneficiaries with them, you should contact the insurance company for that information. Alternatively, if your situation has changed (such as new children in your life, or a change of spouse) you should contact them to ensure your policy reflects this.
Typically, life insurance companies won’t automatically contact beneficiaries on your death. It is up to the beneficiary or beneficiaries to contact the insurance company after your death. It’s important to make sure you have discussed any insurance with your beneficiaries so they know that the policy exists.
That looks after your possessions – but who’s going to look after you if you can no longer do it?
4. Power of Attorney (POA)
Before you die, there may be situations where you are incapable of acting for yourself and need assistance. It can include losing your ongoing capacity through a medical event such as a stroke or dementia, or temporarily, perhaps through a short hospitalisation or while travelling or similar.
A POA gives someone the power to financially act on behalf of the person who gives the authority.
If you appoint a POA, that person has the power to deal with your finances. So, they could buy and sell items on your behalf and could access and transact on your bank, for example. Before appointing a POA, you need to be sure that the person you are appointing is very trustworthy. They will have access to literally all of your finances and property.
While your POA acts for you, you can still transact and do all those same things yourself, too.
There are 2 different types of POA:
General power of attorney
You can put a general POA in place for a specified time period. For example, you could appoint a general POA while you travel overseas, or while you are recovering from surgery.
A general POA ends when you become legally incapacitated (such as when you are no longer of sound mind, or if you can no longer communicate (for example after a severe stroke)). It also ends when you die.
Enduring power of attorney
An enduring POA differs from a general POA because it does not end if you become legally incapacitated. This enduring POA allows the person you appoint to continue to financially act for you even if you become legally incapacitated.
You can cancel an enduring POA as long as you still have legal capacity.
Otherwise, an enduring POA will end when you die.
Appoint a POA through a solicitor, the Public Trustee (if eligible) or purchase an Enduring Power Of Attorney Kit from Service SA. https://www.sa.gov.au/topics/family-and-community/planning-ahead/power-of-attorney-and-advance-directives
Find out more about POAs as part of estate planning on the Legal Services Commission South Australia website: https://lawhandbook.sa.gov.au/ch02s01.php
5. Advance Care Directives
You can no longer nominate someone as your medical power of attorney. It’s a term you might have heard, but it’s no longer something you can put in place in South Australia.
Instead, if you want to provide directions regarding future medical care when you are no longer in a position to make these directions yourself, you can do so by making an Advance Care Directive.
You can only make an Advance Care Directive while you have legal capacity, or are competent. Part of the definition of ‘competent’ means you must understand what an Advance Care Directive is. It also means you must understand the consequences of putting one in place.
In your Advance Care Directive, you can include your wishes and values about your own health care, residential and accommodation arrangements and other personal affairs. Also you can include information about refusing a particular health care treatment and include your wishes about organ donation. Note: you could already have registered as a donor as part of your Drivers Licence application in South Australia.
You can use an Advance Care Directive to nominate someone as your substitute decision maker. Your substitute decision maker can make decisions around your health care, residential and accommodation arrangements and personal affairs.
In the same way it’s only possible for you to put an Advance Care Directive in place if you fully understand what it can do, anyone you appoint as your substitute decision maker must also fully understand what an Advance Care Directive is. This includes understanding what it does and the obligations on them before they sign the document.
If your Advance Care Directive includes a refusal of a particular health care, this is binding.
However, there are lots of different conditions which can mean your Advance Care Directive isn’t enacted as you wish. A health practitioner, for example, cannot be compelled to provide a particular form of health care or to take an action against their ethics. Your Advance Care Directive can also not override a requirement that you undergo a “mandatory” treatment (such as court-ordered medical treatment, for example).
Read the information on the Legal Services Commission South Australia’s website or speak to a legal professional before you take out an Advance Care Directive as part of your estate planning.