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We all have our bucket lists, but who among us has given any thought to creating an ‘after you kick the bucket’ bucket list? Yes, climbing the Eiffel Tower is something a lot of us aspire to do in life, but where’s the fun in contemplating your final tax return?
LifeInsuranceFinder.com.au have done the deadly dull calculations and come up with a pre-emptive way to manage the remnants of your life on earth with an infographic (see below) and the bucket list to end all bucket lists.
LifeInsuranceFinder.com.au’s ‘after you kick the bucket’ bucket list:
Your funeral. This cost is obvious. What is less obvious is why the first three letters spell fun. There are lots of options for preparing for the event in advance, from prepaid funerals, funeral bonds and funeral insurance. A basic cremation will cost you upwards of $4000, while a more elaborate casket, burial and flowers will be around $14,000. There are plenty of variables to change the cost equation, such as a funeral directors service fee, transportation, cemetery plot, celebrant or clergy, flowers, obituary, a headstone and, afterwards, a wake.
Your will. It’s estimated about half of us leave this world without a valid will, which is surprising considering it can be inexpensive to get one made. Not realising how important it is until it’s too late. There are DIY kits from retailers for less than $100, but you could be wasting time and money if it is not done correctly and later deemed invalid during probate. You can use State-based public trustees, which do not charge for creating a will, but do charge to be your executor. A suburban solicitor may charge from $300 for drawing up a simple will. It will cost more if it is not straightforward, or if you engage a larger legal practice.
Your executor. If you value your beneficiaries, you’ll place high value on the executor of your will. While this person can be a private trustee or a solicitor it is generally a good idea if it’s someone you know well and trust. Even if the executor is a beneficiary, it’s a good idea to remunerate them for their time, especially if they are required to take time off work to close your business, sell property, or deal with bad debts. They may even have to defend your will. Professional rates vary as does the work involved in sorting out an individual’s estate. A contingency fund of $10,000 to $15,000 is deemed prudent. State-based public trustees offer a sliding fee scale – for example in NSW it starts at 4.4 per cent for modest estates, to 1.1 per cent for amounts greater than $300,000, with a minimum charge of $200. Not all States and Territories operate this way – it is best to check. Laws covering deceased estates are well established. In NSW, again as an example, solicitors acting as executors are governed by a law that stipulates their fees be between $500 and $13,900.
Defending your will. In the absence of a will, your assets may get eaten up in a lawyers’ picnic if probate is contested. Getting the right professional advice could save your estate big time if it prevents your will from being contested – which could cost tens of thousands to defend.
Your online assets. Our online identity might be the last thing we think about, but did you know three Facebook account users die every minute? Identify your digital assets – devices and stored data such as photos, videos, music, texts, diaries/blogs, social media accounts, email, licences, file-sharing accounts, financial management accounts, domain registrations, websites and online businesses. You can leave your passwords with your executor, a trusted person or engage a digital estate planner, which may cost you a couple of hundred dollars.
Your power of attorney. Privacy laws make it difficult or impossible for a third party to act on a person’s behalf if they do not have a power of attorney. This could be a trusted person you appoint, or your solicitor or a State-based public trustee, each of which have varying rates. Having one will make it easier for someone else to pay outstanding medical bills, cancel direct debits, subscriptions and memberships, close bank accounts, phone accounts, utility services, or insurance policies.
Your final tax return: This is where life’s only two certainties – death and taxes – come together. Make sure your taxes are as up to date as possible, and that your power of attorney or executor will organise your tax return for your final year. Leaving your last return until after you die is likely to cost upwards of two hours in management fees or between $300 to $1,000 to finalise.
Your personal items. Cleaning up household items after you have gone can be emotional for those left to do it. A skip bin can cost anywhere from $200 to $800 (if you are a serious hoarder). If your loved ones are equally dedicated hoarders as you, there is storage to consider. A self-storage space the size of a bedroom (3x3x2.4m) will cost $245 a month in an inner-metropolitan area. That adds up quick – accruing about $3,000 a year. Outer-urban storage is about $100 a month, less expensive, but still chews through $1700 a year.
For further information visit LifeInsuranceFinder.com.au
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