Estate planning is about putting arrangements in place to help secure the future of those you love while you are alive and after you pass away.
A well-considered and documented estate plan can make the future more certain for your family and loved ones.
Estate planning is more than simply planning for the transfer or your assets.
It can also address personal issues.
Such as who will look after you if you cannot make decisions about your medical treatment or financial affairs. And who will take care of your children, if they are still minors, and you are unable to care for them.
THE IMPORTANCE OF A WILL
A will is the cornerstone document of estate planning. It ensures that your wealth is distributed according to your wishes.
If you do not make a legal will, your estate will be distributed using a fixed formula determined by the government. This formula is applied regardless of your personal wishes.
As your life changes, so should your will.
This can include recognising relationship changes such as separation or divorce, assets acquired or disposed of, the birth or death of beneficiaries, minor beneficiaries coming of age and the death or dementia of an executor.
THE ROLE OF AN EXECUTOR
In your will, you will need to nominate an executor or executors who will have the power and authority to manage your estate.
If you do not nominate an executor the Courts will appoint an administrator on your behalf.
The executor has two roles:
- To obtain probate.
This involves making an application to the Court to have the Court validate your will.
- To administer your estate.
The executor must collect all your assets, pay all your debts and distribute your estate in accordance with your will.
POWERS OF ATTORNEY
Losing the mental capacity to manage your financial and legal affairs and care for your loved ones can occur at any time due to accident or ageing.
A power of attorney enables you to appoint someone to act on your behalf if you are unable to (or simply don’t wish to) make decisions about your financial and legal affairs.
A power of enduring guardianship enables you to appoint someone to act on your behalf if you are unable to make decisions about your health and welfare issues.
Everyone has the right to accept or refuse medical treatment. An advanced health care directive directs your doctors, medical staff and family how you wish to be treated.
ADVANCED HEALTH DIRECTIVE
If you believe you’ll need specialised health care, but may not be able to make your own decisions, you can create an advance health care directive advising your family and health care providers what your wishes are.
It is important to let your family members know where this is kept. Our lawyers can help you prepare this, so your legal rights are protected.
CREATING A SOLID SUCCESSION PLAN
While most of your assets can be dealt with in your will, there are many assets that are not included in your estate and must be managed separately in your succession plan.
It is important to consider all facets of your circumstances such as property, insurance proceeds, investments, companies, trusts, business interests and superannuation as well as any debts such as a mortgage or personal loan.
In regard to superannuation, this includes determining whether a death benefit is payable, if you can direct the payment of your super benefits to your chosen beneficiaries, the possible tax consequences of a super death benefit payout, and whether your superannuation can be structured to provide an on-going pension income for the benefit of your dependent.
This fact sheet is for information only. It is recommended that you get legal advice about your situation.
If you, or anyone you know, needs help with their will, please contact our office.