Noel Whittaker is one of Australia’s foremost financial minds, especially when it comes to matters affecting seniors. He joined us this week on the YourLifeChoices podcast to discuss the sometimes tricky time surrounding the death of a loved one, all laid out in his new book Wills, death and taxes made simple.
Author of more than 20 books on investment and retirement planning, Noel Whittaker is no stranger to dealing with some of the more uncomfortable financial aspects of getting older – like making a will.
“Everybody I know has a will story,” Mr Whittaker says.
Probably the biggest story when it comes to wills, is the fact that only around half of people even have a will in the first place.
“The average age of making will was about 47,” Mr Whittaker adds.
“People say ‘it’s one of those things I always mean to do, but I never get around to doing’.”
Even worse is the fact that even among people who have made a will, around 80 per cent never review it again.
Mr Whittaker says reviewing your will regularly as circumstances change is extremely important and can have large implications after your death.
“Your parents may be going to aged care possibly, your kids may now be married, there may be kids who may be going through divorces,” he says.
“People’s circumstances change. That’s why you need to not just make a will but review it continually, at least every two or three years.”
Making a will is just the beginning
Mr Whittaker says the two biggest problems people face in the immediate aftermath of a spouse’s death are potential family squabbles and a lack of – or a misunderstanding of – documentation.
“Hypothetically, let’s say you’ve got three kids and they’re great, or two may be great and one’s not, or three are great but the partner of one is not,” he says.
“And, of course, then there are people who are estranged. These people pop out of the woodwork.”
You might think your will covers everything, but Mr Whittaker says ‘no win, no fee’ offers from legal firms encourage even the most spurious claims to be tested in court, as the plaintiff effectively has nothing to lose.
“And boy, doesn’t that chew up a lot of money [for the respondent],” he says.
No rush to inform
Another challenge is people not quite understanding the meaning of legal terms such as ‘enduring power of attorney’ and consequently accounts and assets being frozen at the worst possible time.
An enduring power of attorney is a document that allows someone to make financial, medical and legal decisions on behalf of someone else in the event they become incapacitated due to illness or injury.
But despite the ‘enduring’ title, this power ends upon the person’s death, says Mr Whittaker.
“I heard so often, oh my partner died, we rushed and told the bank and they froze the accounts,” he says.
People, often widows and widowers, are left confused, and without access to money as they believed ‘enduring’ meant just that. But Mr Whittaker says there’s no need to inform the bank of the death straight away.
He says he hears many stories where a partner was living, at least partly, on their spouse’s account-based pension. Thinking they were doing the right thing, when the person died, their partner informed the super fund – who promptly cut off the pension. He says sometimes it can take months to restore these funds.
“You don’t need to rush in and spread the word,” Mr Whittaker says.
“I mean these were major issues. They couldn’t afford to pay the funeral because the bank had frozen the account. Well don’t tell them that.”
Mr Whittaker says everything you need to know to navigate this difficult time of life successfully is laid out in his latest book, Wills, death and taxes made simple, a step-by-step guide to effective estate planning.
Do you have a will? Do you have any stories of family members coming out of the woodwork after a death? Let us know in the comments section below.
Also read: Noel Whittaker on the move to a world without cash and cheques
