Nick Bruining: The essential bucket list for your personal finances before you die

While there are many occasions where kids will turn to their parents for advice, every now and again the gems of wisdom can flow the other way.

This is one of those occasions when you need to forward this article to your parents.

Financial planners are all too familiar with someone who dies unprepared, leaving a dog’s breakfast to be sorted out.

Identifying assets, debts and getting basic information about someone’s finances can sometimes take months. This delays the distribution of the estate to the deceased’s loved ones.

Your Money has compiled a list of some of the most important things that need to be in place, just in case.

With much of our lives now embedded in the digital universe, critical information can be locked away in cyberspace, inaccessible because no one can guess Dad’s password.

It’s a no-brainer, but if they’ve saved passwords on the computer, most internet browsers will allow you to export the websites and associated passwords. From there, you can dump them on a thumb-drive, or at least print them out to be stored with other critical documents. In any event, make sure they’re easily accessible.

The second no-brainer is that everyone over the age of 18 should complete a valid will and an enduring power of attorney. While a simple DIY will kit is easy and cheap, they’re really designed for very simple estates. In this day and age, it’s unusual to find a “simple estate”.

Most people will own investment structures like superannuation or family trusts and may have to consider complex relationships. That might involve Mum or Dad themselves, or among the kids. New partners, rocky relationships, or family feuds all tick the box for a not-so simple estate.

Regard the money spent on a competent solicitor to prepare your will as an investment in a type of insurance policy. A well-drafted will deals with the complexities of life and, in some cases, can pre-empt challenges and other expensive legal manoeuvres that some might try.

Enduring powers of attorney allow someone to act on your behalf if they’re incapacitated. These instruments are extremely powerful and, sadly, also the tool most used by those abusing elders.

EPAs can be used to open and close bank accounts, sell real estate, and make changes to super. Having two people acting on your behalf can provide a level of protection against abuse.

Enduring powers of guardianship and advanced health directives are both important lifestyle-type documents. These legal instruments provide instructions on how you want to be looked after and who can make the necessary decisions if you are unable to.

Blank EPA, EPG and AHD kits can all be downloaded for free via wa.gov.au. Simply type the document name into the search box. Of course, the competent solicitor drafting your will can also assist.

Next, ensure the details of all your investments are in one place, and clearly marked as such.

It might be a simple exercise book stored in a safe place, listing the investment details including BSB and account numbers, contact information like the website or contact person’s name, and the log-in details to access information online. Also include PIN numbers for phones and ATM cards.

One really important point to make here, even if you have a valid EPA in place — at the moment of death, the authority of the EPA ends.

Making any changes to any aspect of the deceased’s affairs is illegal, unless you are the executor of the estate and probate has been granted by the Supreme Court. There are a few exceptions, like accessing money to pay for funerals, but beyond that, you could find yourself in big trouble.

The exercise book should be put into a clearly marked envelope along with rarely accessed documents such as title deeds, birth certificates and the password list, if separate. If you’ve already planned your funeral or have special requests to include, let those who will be arranging your send-off know the details and where to find the book.

Speaking from experience, start the “chuck-out-the-junk” process now and set aside those family heirlooms and other things that need to be kept.

Arguably the No.1 grizzle of kids dealing with a parent’s estate is separating the junk from the family treasures. Doing that now might prove to be the greatest gift you can give them — an estate that’s simple to administer.

Lastly, if you have super funds either in accumulation or pension phase, make sure you have completed a non-lapsing binding death benefit nomination for each fund.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association.