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The importance of insurance and a properly drafted will

by Rolf Howard7 minute read

Every broker owes it to their client to ensure they have in place insurance and a relevant and properly drafted will.


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Every adult with a spouse or young children should have insurance and a properly drafted will. Unfortunately, many people don’t.

In fact, according to the Australian Securities and Investments Commission, half of all Australians die without a will, passing the decision to the law to allocate their assets and determine legal custody of their children.


Whilst it’s relatively commonplace for people over 60 to begin planning for the future should they pass away, it’s a different story for younger adults. In this day and age we’re fitter, we’re healthier and we do indeed live longer lives. But in the 16,000 recorded deaths in Australia in 2012, approximately 4000 of those people were aged between 30 and 44. Even more disturbingly, many of the deceased left their assets and young families in a state of limbo.

For the younger generation, the consequences of not having an estate plan in place can have drastic consequences for family members and dependants, especially in the case of young families. Estates deemed ‘intestate’ lead to long-standing family disputes and financial instability for the loved ones of the deceased, creating more pain and anguish than necessary. With adequate insurance, and a carefully planned will in place, young parents with dependants can put in place controls and plans in advance, benefitting the children and extended family if tragedy strikes.

Unfortunately, death is a sad fact of life and it’s a possibility that faces every living being. A mortgage broker is often in a uniquely independent position to advise clients to seek proper estate planning advice. It is very much in the interests of the lender that borrowers are insured for income protection to ensure a mortgage is paid out in the case of a tragedy. A well-thought out estate plan that documents specific processes and procedures relating to various possibilities can enhance survivors' abilities to maintain control of assets in the face of tragedy and potential disaster.

To help your client understand the importance of preparing documentation and procedures in case of the untimely event of their death, impress upon them the following points:

1. A will sets out clear instructions as to how your client’s estate should be distributed, ensuring it doesn’t go to people the deceased would not have elected if they had planned ahead.

2. A will allows your client to appoint a guardian to look after children under the age of 18 until they are old enough to look after themselves, and distribute funds for their care. If forced to make the choice, many young parent parents would entrust the care of their children to friends with children of the same age. However, in the event of tragedy, friends are often overlooked by family members and the court system.

3. The will should be created also with appropriate and sufficient insurance to fund requirements.

4. Your clients can bequest items of value and monetary amounts to specific individuals.

5. A will ensures unmarried spouses to receive a share of the estate and prevents assets deferring to a partner of a passed relationship.

6. For clients in second or third marriages, a current will and estate plan can ensure their estate is divided fairly between children from previous relationships.

7. There is a potential benefit in proper planning for grandparents who would otherwise become carers and bear the burden of raising grandchildren in the face of tragedy. With this in mind some grandparents are happy to assist financially with estate planning and insurance.

The few hours spent planning your client’s estate, allocating guardians for their children and electing a power of attorney could save their partners, dependents and other beneficiaries a significant amount of time, effort and money – not to mention unnecessary pain and anguish.


Rolf Howard SmallerRolf Howard, managing partner Owen Hodge Lawyers 

Rolf is managing partner of Owen Hodge Lawyers. He has been in the legal practice since 1986 and a partner of Owen Hodge Lawyers since 1992. Rolf focuses on assisting clients to proactively manage legal responsibilities and opportunities to achieve competitive advantage. 
Rolf concentrates on business planning and formation, directors’ duties, corporate governance, fund raising and business succession. His major interest is to assist business owners and their financial advisers plan and implement strategies to build and exit from successful businesses.

Through www.familyfuture.com.au Owen Hodge Lawyers provides clients the piece of mind that their partner and young children will be cared for if tragedy strikes. With 50 years of industry experience, Owen Hodge Lawyers tailor a unique solution for every family, providing legal advice and recommendations to establish and a will, testamentary trusts and enduring power of attorney.

The importance of insurance and a properly drafted will
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