DEATH is what ends the most marriages, not divorce. Older couples would therefore be well-advised to prepare for the administrative side of one of them passing. The emotional side is hard enough. At least the administrative side is something for which you can prepare, and this may make the emotional side a little bit easier, too.
The basics of preparation
Most people know about the importance of wills, enduring powers of attorney and guardianship arrangements as they enter old age. Many will also have made very practical provisions by holding bank and utility accounts jointly, so that these accounts can continue to operate upon the death of a partner.
One type of account which can’t be held jointly, though, is a superannuation account. Superannuation accounts are always held individually by members of the fund. The problem is that a fund’s trustee decides who will become beneficiaries upon the death of a member. This authority is usually exercised in accordance with the wishes of the deceased fund member.
Those wishes would typically be expressed in a will. Also, the superannuation system features what is known as a ‘binding death nomination’. This is a document that says who should receive a deceased member’s superannuation savings. It will also be taken into consideration by a fund’s trustee. It’s a good idea for couples to both sign a binding death nomination.
For reasons unknown, many utilities these days don’t offer joint accounts any longer. This is especially true of telecommunications companies, but energy companies similarly don’t offer joint accounts. For couples this means that one partner will be the account holder.
To complicate things further, you can nominate an ‘authorised contact’, who has the same authority as the account holder. The catch is that this is usually for a limited period. Telstra, for example, requires you to renew your authorised contact every two years. Utilities claim it is a security measure to make sure your contacts are up to date, because you can authorise anyone, including people who may not be in your life permanently, like care workers, for example.
You don’t necessarily have to keep track of your authorisations, because utilities send out reminders before the term expires.
The administrative process
But after all that, there is still a hurdle to take for the surviving partner. It’s best described as: going through the process. A will and a binding death nomination, no matter how legally compliant, straightforward and clear in their intention to leave the deceased’s estate to their surviving partner will take time and will require the surviving partner to produce many documents so that the deceased’s estate may be released to them.
If, as is increasingly common, a couple’s income is mainly sourced from superannuation savings, it is important to realise that these may not be accessible for months after a partner’s death.
You can have a joint bank account, but if the balance is not topped up through the usual superannuation pension payments, it will soon run dry. Because those superannuation pension payments will simply stop without notification until the fund’s trustee has made up their mind.
So, one of the most important things couples can do to prepare is to make sure that there is an account holding enough money to see the surviving party through to the completion of the formal distribution of their partner’s estate. This could be done by using a couple of bank accounts, a joint bank account or by making sure that there is enough money in both partners’ superannuation accounts if there are two accounts and contributions can be made into them.
Be prepared for Centrelink
Finally, the surviving partner needs to be ready to deal with Centrelink if they are on a pension. Both the income test and the assets test are different once you cease to be in a partnered relationship. It may pay to seek some advice on what would happen to your Centrelink payment after the death of your partner.