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LONDON: A boomer has decided to write a book on both taxes and death for his generation.

Almost 40 years since Making Money Made Simple helped a generation of baby boomers to achieve financial riches, Noel Whittaker is back to advise them on the final phase of their life. Wills, Death & Taxes Made Simple aims to direct the readers of Whittaker’s original book, most of whom are in their late 70s or early 80s, on the best way to secure assets, reduce legal and tax bills and maintain family harmony after they die. Mr Whittaker said Making Money, Made Simple published in 1987 went onto sell two million copies with simple advice, including the benefits of paying your mortgage every fortnight rather than every month.

“One in six households has a copy and it was named one of the 100 most influential books of the 20th century,” said Mr Whittaker over coffee and home-made cookies at his Brisbane riverfront home. “I still get emails every day from people saying it changed my life. And if I give a speech, people always turn up with the book asking me to sign it.”

He said the people who bought the original book in their 30s or 40s were now dealing with the financial challenges of super, retirement, adult children and deteriorating health.

“All the people who now are wealthy from the first book, want to know what to do with their money,” he said. Mr Whittaker said one of the key messages of the book, which is packed with real life anecdotes from readers, is to plan well ahead around issues such as funerals, overseas assets, super, wills and health directives.

“A lot of people don’t realise an enduring power of attorney ends at the death of the person,” he said. “So often we hear dad died and when the relatives ran down to the bank the accounts had been frozen and they couldn’t pay for the funeral.

“Then there are people living on an account-based pension and when the husband dies, it takes 12 months to revive the pension for the widow, and by that time she is starving.”

Mr Whittaker said communication to adult children about matters such as funeral plans were essential. “A lot of the funeral firms are pushing prepaid funerals, which are fine but for God’s sake tell somebody if you have one,” he said. “You don’t want to be going down the aisle with the coffin and find another funeral director has the money.”

He said the fact that 50 per cent of Australians or their parents were born overseas also created complications if they hold overseas assets. “In some cases, you’re better to sell the asset in the country and remit the proceeds,” he says. “In other cases, you’re better off to transfer the asset to the Australian resident.” Mr Whittaker said a key message was to update your will if personal circumstances change, such as a remarriage, to prevent family disputes.

“Lawyers are now advertising no win, no fee and are encouraging people to sue over wills,” he said. “That is why we say in the book that the best defence is a very well-drawn will. People are living longer so you’ve got older couples getting married again.

“If an older couple marry, and one of them pays for the other one’s half a million dollars in the nursing home, it could end up going to the surviving partner, not the estate of the person who paid for it unless appropriate adjustments were not made.”

He said new taxes on super, which some have likened to a death tax by stealth, also needed to be taken into account in estate planning. “Your super has a non-taxable component, which is the component you put in from after-tax dollars,” he said “If that’s left to your spouse, it is fine but if it’s left to a non-dependent such as non-dependent kids, it’s taxable. This particularly affects widows and widowers or single parents. It’s a 17 per cent tax so on half a million in super its $35,000.”

Mr Whittaker said he was now going into bat for older Australians, who are increasingly being ignored by banks, including preventing them from obtaining simple things like a credit card. “I know of one guy who is 71 who couldn’t get a credit card even though he has a $4 million house in Sydney, $2 million in super, and $300,000 cash in the bank,” he said. “In other cases if the husband dies and the wife is the supplementary holder of the credit card, the card is cancelled> She cannot get a credit card irrespective of assets or income.” He had spoken to Australian Banking Association boss Anna Bligh, senior bank executives and ASIC but “they all blame the other one “These people have assets, they can obviously repay but it’s the 17-year-old kid next door who gets a credit card on the strength of three pay slips.”

He said that while medical expertise was extending life, advanced care directives should be considered if quality of life deteriorated. “Everyone I know wants to live as long as they’re healthy and then die. Nobody wants to be chained to a bed for five years and hooked up to an oxygen tube,” he said. “An advanced health directive is the instruction to everybody that you do not want any of that sort of help. I’ve told my family, if they lock me in a room I will haunt them. I have a mate who was seven years on a bed at New Farm. Would you like to spend seven years of your life in a bed? It’s terrible.”

Noel’s top estate planning tips

1. Review your will at least once a year or when there is a significant change of circumstances such as death or divorce.
2. Seek advice about tax. Death does not trigger capital gains tax – in most cases the liability is passed to the beneficiary who will pay the CGT if and when they dispose of the asset.
3. Consider an advanced care directive to give yourself control over your medical treatment when you are in the final stages of life.
4. Understand the difference between a superannuation member benefit and a superannuation death benefit. A member benefit is paid during a person’s lifetime – a death benefit is paid after death and can be subject to a tax of 17 per cent. However, it is easily avoided if you know what to do.
5. Contest a will. If you think you have a claim on an estate, seek expert advice as soon as possible. Not everyone is eligible to contest a will and there are strict time limits.
6. If prepaid funerals and funeral bonds are part of your plans make sure details are included with your estate planning documents. It’s too late to find out about a prepaid funeral when the service is over.
7. When appointing an executor make sure the person you appoint is happy to take on the job and that they are competent to do so. Remember they are standing in the place of the deceased and must be able to handle the running of the estate efficiently and promptly.