SCAM Watch
(ACCC)

18 March 2020

Unfortunately, scammers are taking advantage of the spread of coronavirus to exploit and play on the fears of consumers across Australia.

Scammers are doing things such as falsely selling coronavirus-related products online, and using fake emails or text messages to try and obtain personal data.

Other scams include phishing emails and phone calls impersonating the World Health Organisation, government authorities, and legitimate businesses including travel agents and telecommunications companies.

If you think you have been scammed, you can make a report on the Scamwatch website, and find more information about where to get help.

Common types of coronavirus scams

We have received reports of:

• phishing emails and phone calls impersonating entities. These include the World Health Organisation, government authorities, people confirmed to have the coronavirus, and legitimate businesses such as travel agents and telecommunications companies
• people receiving misinformation about the coronavirus, being sent by text, social media and email
• products claiming to be a vaccine or cure for the coronavirus
• investment scams claiming coronavirus has created opportunities.

Protect yourself

• Be aware of fraudulent emails claiming to be from experts saying that they have information about the virus. For the most up-to-date information about the coronavirus, visit the Department of Health and the World Health Organization (WHO).
• Be careful of fake online shopping sites requesting unusual payment methods such as upfront payment via money order, wire transfer, international funds transfer, preloaded card or electronic currency, like Bitcoin. Information is available at: Online shopping scams.
• The best way to detect a fake trader or social media online shopping scam is to search for reviews before purchasing. No vaccine or cure presently exists for the coronavirus.
• Don't let anyone pressure you to make quick decisions. Take your time and consider who you are dealing with.
• Don't click on links from sources you don't know. They could download viruses onto your computer or device.
• Don't open attachments or click on links in emails, text messages or social media messages you've received from strangers just press delete.
• Never respond to unsolicited messages and calls that ask for personal or financial details just press delete or hang up.
• Always keep your computer security up to date with anti-virus and anti-spyware software, and a good firewall. Only buy computer and anti-virus software from a reputable source.
• If you are planning to donate, do your research. If you are donating to crowdfunding requests, check the terms and conditions of funding platforms and ensure you are dealing with official organisations.
• If you are donating to an established charity or not-for-profit organisation, ensure it is registered and that you are on its official website by searching the Australian Charities and Not-for-profits Commission Charity Register.
• Stay up to date with latest consumer advice relating to COVID-19 (coronavirus) on the ACCC website at: www.accc.gov.au/covid-19.

Money and Life
(Financial Planning Association of Australia)

Keeping busy with work and family year after year can make it tricky to decide how to spend time in retirement. Discover ways to feel your best and make the most of life after work.

1. Keeping active

According to research from Sydney University, people who have retired generally adopt a healthier lifestyle than their working peers. With more time on their hands, retired people are getting a better night's sleep and more exercise. The study of 25,000 older Australians shows that retired people sleep 11 minutes longer and spend 93 minutes more per week keeping physically active, compared with the same age group still in the workforce. These findings could be part of the reason why Australians are living longer. "We hope this information could translate to better health in older Australians, preventing cardiovascular disease and diabetes," says Dr. Melody Ding, lead researcher for the study.

So what could your healthy lifestyle in retirement look like? If you already like to run, hike or cycle, you'll have more time to enjoy these activities and won't need to budget for extra equipment. Joining a gym or sports team is another way to add exercise into your weekly routine, and make new friends too.

2. Staying social

Your social networks in retirement are just as important to your health and wellbeing as a regular commitment to exercise. In a 2013 research study, Oliver Huxhold from the German Centre of Gerontology found a significant difference in life satisfaction among older people who regularly take part in activities with friends. Not only does this social activity improve mental health and boost positive feelings, it can also protect people from the negative effects of ageing.

Work can often play a big part on our social life. In retirement, you can find yourself feeling isolated when you've been used to daily contact with colleagues and friends from work. So it's important to strengthen social ties with friends, new and old, who share your interests. There are all kinds of ways to reach out to like-minded people in your community, through volunteering, joining clubs or local interest groups.

3. Working and volunteering

Not everyone sees retirement as their chance to stop working altogether. Continuing to work in some capacity can be a very positive lifestyle choice, giving your days and weeks a welcome routine and purpose. Part-time work can also be a great way to supplement your income in retirement and help your savings last longer. Having more time on your hands can also allow you to set-up that business you've always wanted to try or start a hobby that could turn into an extra source of income.

After a lifetime of work, you're likely to have knowledge and skills to offer others through a mentoring or tutoring arrangement. This can be a very rewarding way to develop your social network and you can choose whether to accept payment or offer your time and skills as a volunteer. This is one of many types of volunteering that can give you the sense of purpose you enjoyed in your work and enable you to make a positive contribution to your community.

4. Spreading your wings

With fewer demands on your time, perhaps you can get around to ticking some destinations off the bucket list? Whether you're planning to head overseas or pack up a caravan and join the growing ranks of grey nomads, travel in retirement can be a very rewarding experience. According to Tourism Research Australia, the Grey Nomad trend - people age 55+ spending long periods travelling around Australia is growing, with a massive 90% increase in the number of 55 to 70-year-old domestic travellers since 2000.  Many people find they can live on a more modest budget as they travel. Others are just drawn to the lifestyle that comes with road tripping their way through retirement.

If you're heading overseas, many companies organise travel programs specifically for people who are retired. These trips can be ideal if you're looking to meet and travel with likeminded people and have all the hard work and planning taken care of. When travelling for extended periods, it's worth organising a Power of Attorney to make it easier to manage your personal and financial affairs from abroad.

5. Family commitments

Having more time to spend with family can be one of the greatest rewards of retirement. Many retirees love to be involved with caring for grandchildren. Having finished work, they have fewer responsibilities to juggle and may welcome the chance to focus attention on their newest family members.

However, taking on too much responsibility for the care of others - whether that's grandchildren and/or elderly parents - can limit the time you have to look after yourself and do other things you enjoy. And when it comes to helping family out with money, be sure you're not putting yourself in a vulnerable position with your own finances and be aware of any circumstances where a family member is taking advantage of your goodwill and generosity with money. Cases of elder financial abuse are most likely among family members and there is support and help available if you think you may be experiencing financial abuse.

6. Location, location

Where you live can often be one of the most important choices to make for your future wellbeing in retirement. It can have a big impact on what you'll do with your time and who you'll spend it with, as well as your retirement budget. Sometimes downsizing can make sense for practical reasons, as it can allow you to move somewhere that's easier to maintain and 'lock up and leave' if you're planning to travel. For others, it's a way to use the equity in their home to fund their retirement.

If you're planning to sell and make a sea change, this can bring more budget benefits if you're moving to a location where the property and lifestyle is more affordable. But it's also important to think about the possibility of starting from scratch with your social life in a new neighbourhood and having access to activities you enjoy and the transport and health facilities you might need as you grow older.

 

MoneySmart
(ASIC)

A sudden death can place financial stress on those who depend on you. If this happens, life cover can help them pay the bills and other living expenses.

What is life cover

Life cover is also called 'term life insurance' or 'death cover'. It pays a lump sum amount of money when you die. The money goes to the people you nominate as beneficiaries on the policy. If you haven't named a beneficiary, the super trustee or your estate decides where the money goes.

Life cover may also come with terminal illness cover. This pays a lump sum if you're diagnosed with a terminal illness with a limited life expectancy.

Accidental death insurance is different from life cover. It will only pay out if you die from an accident. It will not provide cover if you die from an illness, disease or suicide. This type of cover often has a lot of exclusions.

To understand what's covered under a policy and the exclusions, read the product disclosure statement (PDS).

Decide if you need life cover

If you have a partner or dependents, life insurance can help repay debt and cover living costs if you die.

If you don't have a partner, or people who depend on you financially, you may not need life cover. But consider getting trauma insurance, income protection insurance or total and permanent disability (TPD) insurance in case you get sick or injured.

How much life cover you might need

To decide how much life cover to get, consider how much money you or your family would:

• need - to pay the mortgage, credit cards and any other debts, child care, school fees and ongoing living expenses
• receive - from super, savings, the sale of any investments, your paid leave balance, and support from your extended family

The difference between these is the amount of cover you should get.

Use our Life insurance calculator

Work out if you need life insurance and how much cover you might need.

If you need help deciding if you need life cover, and how much, speak to a financial adviser.

How to buy life cover

Check if you already hold life insurance through super. Most super funds offer default life cover that's cheaper than buying it directly. You can increase your level of cover through your super fund if you need to.

You can also buy life cover from:

• a financial adviser
• an insurance broker
• an insurance company

Life cover can be bought on its own or packaged with trauma, TPD or income protection insurance. If it's packaged, your life cover may be reduced by any amount paid on other claims in the package. Check the PDS or ask your insurer.

Life cover premiums

You can generally choose to pay for life cover with either:

• stepped premiums - premiums that increase over time
• level premiums - premiums that do not change over time

Your choice of stepped or level premiums has a large impact on how much your premiums will cost now and in the future.

Compare life cover

Once you know how much life cover you need, shop around and compare:

• benefits and policy features
• exclusions
• waiting periods before you can claim
• limits on cover
• the cost of the premiums now and in the future

A cheaper policy may have more exclusions, or it may become more expensive in the future. You can find information about the policy on the insurer's website or in the product disclosure statement (PDS).

Use our Life insurance claims comparison tool

Compare how long it takes different insurers to pay a life cover claim and the percentage of claims they pay out.

What you need to tell your insurer

You need to tell your insurer anything that could affect their decision to insure you. You need to give them this information when you apply, renew or change your level of cover.

Insurers usually ask for information about your:

• age
• job
• medical history
• family history, such as a history of disease
• lifestyle (for example, if you're a smoker)
• high risk sports or hobbies (such as skydiving)

If an insurer doesn't ask for your medical history, it may mean that the policy has more exclusions.

The information you provide will help the insurer to decide:

• if they should insure you
• how much your premiums will be
• terms and conditions for your policy

It is important that you answer the questions honestly. Providing misleading answers could lead an insurer to deny a claim you make.

Making a life cover claim

If someone close to you dies and you need to make a claim, or if you need to make a terminal illness claim, see how to make a life insurance claim.

(Feedsy Exclusive)

Family Trusts: What Are They and When Should You Have One?

A family trust simply refers to a trust set up by a family group who wish to safeguard their collective assets. Such trusts can be used to provide tax benefits to the group in question, to protect assets from individual liability, or to ring-fence them for inheritance or investment purposes.

Read on to discover more and to decide if this type of trust is right for you;

Key Terms

Before getting down to the benefits of a family trust, it is important to establish a few key terms;

Trust Deed

The trust deed is a document which outlines the provisions of the trust, and the terms and conditions it is bound by. This document will be signed by the settlor and trustee(s) before it becomes valid.

Trustee

The trustee is basically the manager of the fund, the person who is trusted with certain executive powers and responsibilities as outlined in the trust deed.

Settlor

The settlor is a third party, not otherwise involved in the activities of the trust. They are responsible for handing over assets to the trustee on behalf of the beneficiary.

Beneficiary

A beneficiary is anyone named in the trust deed who can benefit from the assets and wealth held in the trust.

Family Trust Benefits, Explained

Family trusts enable beneficiaries to enjoy the following benefits;

• Family assets are protected from any liabilities or actions brought against individual trustees or beneficiaries
• The assets are also protected within the trust by family control tests, which control the management of the fund
• Family trusts are exempt from all but one of the trust loss tests, limiting the tax which can be drawn from the trust
• No tax is payable on distribution of funds between nominated members of the family group (although Family Trust Distribution Tax is applied when money is paid to other parties)
• Funds are secured and can easily be passed on to future generations

When Is a Family Trust Useful?

Any family which has assets worth protecting or comes into a substantial amount of money is recommended to set up a family trust. Remember that there can be more than one trustee just as there will usually be more than one beneficiary so creating a family trust does not just sign over the family's assets to the control of one member.

It is difficult to predict when someone might get into financial trouble or when an inheritance may need to be paid to a family member in the next generation. As such, it is better to set up a trust when times are good. This will then act as a financial shield on rainier days.

If you think a Family Trust might work for your family's assets, first talk to your lawyer, accountant or financial adviser for more specific advice.

MoneySmart
(ASIC)

A good estate plan will help make sure your wishes are carried out when you die. It can also help if you become unable to make your own decisions.

Estate plans

An estate plan records what you want done with your assets after your death. It can include documents such as:

• your will
• a testamentary trust (as part of your will)
• superannuation binding nominations
• an advance healthcare directive (what you'd like done with your body)

It also covers how you want to be cared for medically and financially if you can no longer make your own decisions. This part of your estate plan may be in documents such as:

• any powers of attorney
• a power of guardianship (giving someone the right to choose where you live and to make decisions about your medical care)
• an anticipatory direction (stating your wishes about your future medical treatment)

The documents you choose will depend on your situation and what you're comfortable to trust others with. Get legal advice if you're not sure.

You must be over 18 and mentally competent when you draw up your estate plan.

Your will

A will is a legal document stating what you want to happen to your assets when you die. It is part (but not all) of your estate plan.

Your will can cover things like:

• how you want your assets shared
• who will look after your children if they're still young
• any trusts you want to set up
• how much money you'd like to give to charities
• plans for your funeral

It's important to have an up to date will. If you die without one, the law decides who will get your assets and this may not be who you wanted.

Making your will

You can get your will written by a solicitor (for a fee) or by a Public Trustee. A Public Trustee may not charge if you:

• are a pensioner or aged over 60, or
• nominate them to carry out the instructions in your will (that is, to be your executor)

The rules vary, so visit the Public Trustee office website for your state.

• Australian Capital Territory public trustee and guardian
• New South Wales trustee and guardian
• Northern Territory public trustee
• Queensland public trustee
• South Australia public trustee
• Tasmania public trustee
• Victoria state trustee
• Western Australia public trustee

If you use an online will kit, get it checked by a solicitor or Public Trustee. They can make sure it's been done properly. If your will isn't done properly, it will be invalid.

Make sure you put your will in a safe place and tell someone close to you where it is.

Updating your will

It's important to update your will as your situation changes for example, if you:

• get married
• divorce or separate
• have children or grandchildren
• have a significant financial change
• lose your spouse (or someone else who is named in your will) through death

Super and your will

A binding nomination directs who your super fund trustee gives your super benefit to when you die. If you don't nominate someone, the super fund trustee will decide who your money goes to.

Family trusts and your will

If you have a family trust, it continues after your death. The trust determines who gets your assets, even if your will says something different.

Testamentary trusts

A testamentary trust is a trust that is written in your will. It takes effect when you die, and it's administered by a trustee, who you usually name in your will.

The trustee looks after your assets until your beneficiaries can get them. This is set out in your will, and is either when:

• a child reaches a certain age, or
• a beneficiary achieves a specific goal (for example, they get married or earn a particular qualification)

You may want to consider setting up a trust if your beneficiaries:

• are minors (under 18), or
• have diminished mental capacity, or
• may not use their inheritance well

Another reason to consider a trust is to avoid family assets being:

• split as part of a divorce settlement, or
• part of bankruptcy proceedings

Powers of attorney

A power of attorney is a document where you give someone else the legal right to look after your affairs for you.

It's important to nominate someone that is trustworthy, financially responsible, and likely to be around when you need them.

There are different types of powers of attorney:

General power of attorney

This allows someone to make financial and legal decisions for you. It's usually for a specified time for example, if you're overseas and can't manage your affairs at home.

If you become unable to make decisions yourself, a general power of attorney becomes invalid.

Enduring power of attorney

An enduring power of attorney (or EPA) allows someone to make financial and legal decisions for you. If you become unable to make decisions yourself, an enduring power of attorney will still be valid.

Medical power of attorney

This allows someone to make medical decisions for you if you ever become unable to do so yourself. It doesn't allow them to make other kinds of decisions.

Legal and financial housekeeping

It will help your family and your executor if you list all the documents you have and where they're kept.

As well as the documents talked about above, other key documents to keep handy are:

• birth certificate
• marriage certificate
• life insurance
• medical insurance
• Medicare card
• pensioner concession card
• house deeds
• home and contents insurance
• deeds and insurance policies for any other real estate you own
• bank account details
• superannuation papers
• investment documents (securities, share certificates, bonds)
• prepaid funeral plans