Robert Holmes a Court was one of Australia's most respected and feared businessmen who with intellect, daring and hard work built a $2 billion empire in the 1980s.
When he died suddenly aged 53, the world was stunned to find that he had not left a valid will. Legend has it that he carried a draft will around in his briefcase for years but never actually signed it. The resulting legal wrangling took nearly 20 years to resolve, seriously straining family relations.
Why would a man who was known for his ability to think strategically and act boldly, who was surrounded by lawyers, fail to compete a will? He is not alone; it is estimated that about half of all Australians die without a valid will.
Legend has it Robert Holmes a Court carried around a draft will in his briefcase.
Most people cite lack of time, knowledge or inadequate assets as the reason for not attending to their estate planning. But the real reason is that very few of us like to think or talk about death and medical advances have been so successful that we fool ourselves into thinking that death is always a long way off.
This self-delusion can be devastating — a mother of three young sons who recently lost her husband to cancer concedes that the period after her husband's death was even more traumatic when she realised that she lacked the legal authority to deal with his assets and spent time negotiating with government departments and financial institutions rather than being able to grieve and support her children while at their most vulnerable.
While her late husband had been seriously ill for some time, he never drafted a will, feeling it would be an admission of defeat, mentally weakening his fight against disease, but he failed to take into account the impact this would have on his family.
Getting your testamentary affairs in order does not need to be hard or costly — there are do-it-yourself will kits and lawyers offering quality wills online in addition to specialist estate planning solicitors and financial planners.
A good estate plan
Here are the five component parts of a good estate plan.
1. A will
This is the legal document which appoints someone to deal with your assets (executor) and distribute them in accordance with your wishes to your chosen beneficiaries. Importantly it can also nominate someone to care for your children while under 18 (guardian).
2. Testamentary trust
While this will not be necessary for everyone, this is a trust which arises upon your death and can provide powerful protection and tax advantages for your beneficiaries.
3. Letter of wishes
This is a non-legal document which allows you to provide context for the decisions you have made in your will and additional information for your executors to make administration easier, like account numbers and computer passwords. It can be really helpful to keep your will itself very straightforward so it can be relevant for as long as possible and regularly update your letter of wishes as things change.
4. Superannuation death benefit nomination
Super, like company and trust assets, are not covered by your will. As such you need to instruct your superannuation trustee specifically with a death benefit nomination, which can be very important considering the level of life insurance often also held inside super.
5. Enduring power of attorney
This provides the authority to make financial and sometimes medical and lifestyle decisions on your behalf if you are still alive but have lost the ability to make decisions for yourself.
Rather than fall into the trap of Robert Holmes a Court, assuming estate planning is something that can be put off until tomorrow, it's best to think about your will and other estate documents as a powerful gift to those closest to you. It is your ability to best preserve relationships between family and friends and avoid conflict and angst caused by uncertainty.
Valid testamentary documents can also be a sort of memento mori, a reminder of how precious and fleeting life is and to relish every day. Originally used by the ancient Romans, memento mori have been used over the centuries to quell the fear of dying to allow the joy of living. Thinking in these terms means that regularly reflecting on your estate planning is not something to be avoided but as a positive process in your life.
November 21, 2015
The Sydney Morning Herald