Estate planning and considering what will happen after you die or become incapacitated can be a difficult subject to address. However, many people find it comforting to know that should the worst happen, their wishes will legally be implemented.
Planning your estate involves preparing documents that contain directions about how you want your assets to be divided up when you die (a Will), directions regarding how you want to be cared for medically in the event that you lose capacity (appointment of enduring guardian), and directions as to who you want to be able to make financial decisions on your behalf whilst you are alive (a power of attorney).
Wills
A Will is a legal document that comes into effect when you die and is the only way to ensure your assets are distributed in accordance with your wishes. When someone dies without leaving a valid Will, they are said to have died “intestate”, and their Estate is distributed using a formula determined by the legislation. If this happens to you, then your assets may be divided in a way that is against your wishes.
You can elect include special provisions in your Wills, depending on your specific needs. For instance, if you have children, it is essential you include detailed instructions as to who should be their guardian if you die. If you have a large estate, you may want to consider including a trust in your will (known as a testamentary trust) to protect your assets and reduce the tax to be paid by your beneficiaries.
We recommend that you come see us to prepare your Will, as there are strict requirements relating to the signing and witnessing of wills – if these seemingly simple tasks are not carried out correctly, then your Will could be invalid.
Power of Attorney
A power of attorney document allows another person to make financial decisions on your behalf during your lifetime, or for a specified period of time only. This person is known as your “attorney”. Your attorney is able to operate your bank accounts, pay your bills, and buy or sell property on your behalf.
For this reason, it is absolutely essential that you have complete trust in the person you appoint – the power of attorney document will legally empower them to lawfully do anything that you can do yourself.
Appointment of Enduring Guardian
An enduring guardian is someone you choose to make personal, medical or lifestyle decisions on your behalf, when you are not capable of doing this for yourself. The appointment of your enduring guardian takes effect only if you become unable to make your own decisions.
You can choose which decisions you want your enduring guardian to make, and how they must exercise the decision-making functions you give them – for instance, you can give them the power to decide on your health care, but not where you live.
The enduring guardianship ends when you die or when you revoke the appointment.
If you have any queries in relation to Estate Planning, please contact our Estate Planning Team at wmd@wmdlaw.com.au or on 9525 8688.
