Dear Heather,

The past few years have been rather tumultuous as I have been through a divorce.

I am beginning to see the light at the end of the tunnel, but I am aware that I should be getting my affairs in order.

I am 55 and I have three children. What do you recommend I should have in place?

Divorced mother

Dear Divorced mother,

I understand that you have been through a difficult time for you and your family, placing demands on your emotions and your finances.

However, now is a very good time to check that your affairs are in order, both in regards to real estate and other areas. I have outlined a few key items to help you:

n Will

If you die without a will in Bermuda, upon your demise your estate will be transferred to your next of kin, such as your wife or husband.

Your wife or husband, if you remarry, may not necessarily be the mother or father of your children. Therefore, to ensure that your estate goes to whom you wish, it is essential to have a will.

n Executor

In your will you need to name the executor of your estate. A member of your family is not always the best choice as often their personalities are prohibitive to making neutral decisions.

If no one in your family is knowledgeable enough, responsible enough, fair enough or objective enough to be your estate representative, then this responsibility is best given to a neutral party such as a lawyer.

n Power of attorney

In the event you are incapacitated during your lifetime, your loved ones will be spared a lot of unnecessary anguish if you have made an “enduring power of attorney”.

If you have not, it may result in your loved ones having to hire a lawyer to make an application to the courts for something called a “receiving order”, which enables them to look after your affairs.

However, this takes time. A word of warning here, power of attorney can be abused by greedy family members. Choose someone trustworthy and responsible.

n Registered primary dwelling

Your main residence could be exempt from stamp duties (death tax) if you have it registered as a primary family homestead.

Application forms are available from the Office of the Tax Commissioner and there is no charge. Failure to do this may result in the property being subject to the prevailing rates of death duties, which in a property worth $1.5 million could be as much as $162,500.

This is something you will want to organise now, particularly if you have many properties.

If you do have multiple properties and have not registered the primary homestead, the government may choose one for you, and it probably will not be the most valuable.

So you can save yourself some money here. You do not actually have to be living in it at the time of death.

n Mortgage insurance

This is actually the same thing as term life insurance.

This will cover a lump-sum payment of your mortgage should you die before it is paid off.

This is a tremendous help for your surviving or loved ones.

n Taxes

If you have dual citizenship or you are the alien spouse of a Bermudian, you will need to investigate any tax repercussions of property ownership in Bermuda with a good tax advisory specialist.

Tax policies can vary tremendously from country to country.

This may be expensive but it will save you money in the long run.

n Joint accounts

If you hold a joint bank account with someone, at the time of your death the assets in that account will automatically go to the joint holder.

Do not keep large amounts of money in a joint account as these monies are beyond the control of the instructions in your will.

n Real estate

If you own real estate it can sometimes be a huge asset that you may want to tap into, particularly if healthcare costs escalate.

You may be able to borrow money, rent out or sell. A consultation with your real estate agent will help determine what best suits your needs.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 26 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence.