The Age newspaper chats to Nicholas Parker, Senior Counsel at Coote Family Lawyers about the record keeping habits you should be practicing to best manage your estate and inheritance.
Money editor, Dominic Powell writes:
There’s a good chance that somewhere in your house you have, like me, the document hole. Now I don’t mean a literal hole, but more of a metaphorical one. This could be a drawer, or a corner of a cupboard, or – if you’re really organised – a filing cabinet where all of your “important” documents get shoved on the off chance you might need them someday.
That receipt for a client lunch you forgot to claim on tax four years ago? It’s in the hole. The mechanic’s report and receipt from your most recent car service? In the hole. The letter from your bank telling you your interest rate has increased? Oh, you better believe it’s in the hole.
It’s a sin we’re pretty much universally guilty of; keeping an important-looking document just because you might need it one day, or it could be important for your tax return next year.
What’s the problem?
Let me be clear, I’m not getting stuck into responsible record-keeping. Not keeping receipts is a real issue for many workers and business owners, with a study from 2024 showing lost or damaged receipts caused Australians to miss out on a potential $7 billion in unclaimed deductions.
But good record-keeping isn’t just keeping everything even slightly finance-related locked up in the hole because, as a reader emailed me about this week, it can cause all sorts of issues when you or one of your loved ones has to work out what’s actually important to keep, say in the case of your death or an estate dispute.
What you can do about it
As you get older, it’s wise to start thinking about documents that might be relevant to the management of your estate when you pass away.
Nicholas Parker, special counsel at Coote Family Lawyers says getting all your documents in one place can be extremely helpful for any of your dependants who might be trying to locate something important after you’re gone. These include copies of your will, recent tax returns, any records for depreciating assets, certificates of title, marriage/birth/death certificates, trust deeds, loan documents and any instructions on your burial or cremation.
“Always keep executors informed about where original documents are stored – in a safe, with your lawyer, etc,” Parker says. “Keeping important information for family and executors in one spot (even if that is a computer file or a physical file) can be very valuable.”
Almost all of these records are or can be stored online, so the most important things to record are any relevant logins and passwords for your online services, including any two-factor authentication methods. Also keep an eye out for any documents that establish the cost base of assets, such as contracts of sale or renovation records, as they can make a significant difference when beneficiaries eventually sell inherited assets and need to calculate capital gains tax.
You can read the full article in The Age here:
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