How to Keep Your Family Informed of Your Financial Details
March 13, 2015

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Keeping Your Family Informed in Case of Emergency

A lot of people say family and finances don’t mix well. And in a lot of cases, this is true. We’ve all heard the horror stories of the relative who never repays loans or of children bickering about their entitlements after a parent passes away without a will.

These arguments are never pretty, which is why many choose not to disclose their personal finance details to their family. But it could be doing more harm than good, particularly when it comes to your insurance.

While it’s hard to think of your own mortality, you need prepare for the worst.  That’s why you invest in financial measure such as Life Insurance to ensure you and your family are protected. And that’s why telling the right people your plans and financial details is important. Here are our tips for keeping your family informed.

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Choose your beneficiaries carefully

Our first tip is to make sure you’ve chosen the beneficiaries on your Life Insurance policy carefully.  They should be trustworthy people within your family you want to receive your pay out. If you’re married, divorced, have children or grandchildren, or a beneficiary dies after your policy has been written you need to contact your insurance company as soon as possible to make the relevant updates.

Even if you’ve written a will, the beneficiaries in your insurance policy or trust deed may override those named in your will. So it’s important to ensure your beneficiaries are consistent across all your legal documents.

What do I need to disclose?

You don’t need to disclose all your personal financial details, nor do you need to tell your entire family of them. But we recommend you inform at least a partner, sibling, adult child, next of kin, or even trusted friend of your financial details and documents.

This information should be as simple as which company your insurance policy is with and where your will is stored. If you write your will with a state body, they will generally store it for you in a fireproof safe, so all you need do is tell your family which body it’s stored with. If you prefer, you can keep quiet about the remaining details, including monetary amounts and chosen beneficiaries.

Keep all your key legal documents in the same place, which at least one family member or your solicitor knows about. These documents should include your birth certificate, copies of your insurance policies, house deeds, and superannuation papers.

Should I appoint an executor?

In short, yes, it’s highly recommended you appoint an executor to your will. An executor will be the person responsible for gathering your details, liaising with the courts and distributing funds to your beneficiaries. If you do appoint an executor, this is the only person who needs to know about any of your financial details.

Many people choose to appoint a friend or family member as an executor, but the NSW Trustee and Guardian recommends you appoint a professional and independent executor to save your family and friends any hassles and stresses in a time of grief. If you appoint a third party executor, it’s important your family knows their contact details.

Why is this all so important?

If nobody knows your life insurer or your super details, nobody can access your funds, including your beneficiaries.

This is particularly important if you hold your Life Insurance through your super fund – everything could be locked away where your family cannot access it.

Having properly nominated beneficiaries, an executor, a well-written will and good records of your insurance and super details is also important in reducing the likelihood of long, drawn-out legal proceedings after your death to determine appropriate beneficiaries.

If you need assistance nominating or updating your beneficiaries, or planning your legacy, contact a Wealth Smart adviser who will guide you through the process, from setting up an insurance policy to helping with the claim when the time comes.

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