If you have been putting off having a Will or Power of Attorney prepared or need your estate planning documents reviewed, we can help.
Making a Will
A Will is a legal document directing how you want your estate managed after you die. It needs to make your wishes clear, avoid confusion and be legally binding. Your Will should set out how your property will be divided amongst your beneficiaries and appoint one or more executors. Your executors have the legal and administrative task of sorting out your assets and debts, following the terms of your Will, and finalising your affairs.
There is no short answer when it comes to preparing your Will. It depends on your assets, your personal circumstances, your beneficiaries, and the effect that their inheritance may have on them. In some cases, a testamentary trust can sidestep potential taxation problems, or protect vulnerable beneficiaries who may be incapable or at risk of managing their inheritance. We can explain the potential benefits of a testamentary trust and provide specific advice for your situation to help you make an informed decision.
You can nominate anyone as a beneficiary and distribute your assets in any way you like, however, if you do not provide for certain family members and dependents, your Will may be contested by an ‘eligible’ person. We can provide tailored advice in this regard.
Wills after separation or divorce
It is important to review and update your Will when your family and financial circumstances change, particularly when you separate from your spouse or de facto partner. You may need to revise who is included in your Will, or if there has been a property settlement, what assets will be available for distribution after you die. Receiving legal advice about the effect that a separation or divorce has on an existing Will ensures that your testamentary wishes can be reflected in your new estate plan.
What happens if I die without a Will?
Dying without a Will is referred to as dying intestate. If this happens, your estate is distributed in accordance with a statutory formula. The rules of intestacy provide for a specific order of distribution to your next of kin. While these rules are generally designed to reflect society’s expectations as to who should benefit from your estate, they may not reflect a person’s real wishes, intentions, or unique circumstances.
If you die without a Will, there is little opportunity to assess the likely tax implications on your beneficiaries’ inheritances and plan accordingly, nor utilise the benefits of a trust to help protect vulnerable beneficiaries.
Dying without a Will also means that your next of kin will usually have to apply to the court for letters of administration before dealing with your estate, resulting in additional work, stress and costs.
Powers of Attorney and Enduring Powers of Attorney
A power of attorney is a legal document that allows you (the principal) to appoint someone you trust (your attorney) to act on your behalf in certain matters. It is not possible to make a power of attorney on behalf of someone else. The principal, who must have the necessary mental capacity at the time, is the only person who can appoint an attorney and determine their scope of power.
In Victoria, there are three types of powers of attorney that are suited to different situations:
- non-enduring (general) powers of attorney
- enduring powers of attorney (for financial, legal and/or personal decisions)
- supportive powers of attorney (for help with decisions)
An enduring power of attorney enables your attorney to make decisions about personal matters or financial matters, or both. It remains valid even if you become incapacitated. The terms of the power of attorney will determine when the attorney’s authority is to start and the scope of authority. For instance, the power may be limited to personal matters (such as where you will live) but not financial matters (such as where your money is invested). A principal may appoint more than one attorney and require the attorneys to work together to make significant decisions.
Even if an attorney has the authority to make personal decisions, they cannot make medical treatment decisions unless they are also appointed as a ‘medical treatment decision maker’.
The non-enduring and supportive power of attorney documents continue until they are either revoked by the principal or the principal loses the capacity to make legal decisions for himself/herself.
Having a power of attorney or enduring power of attorney in place can provide peace of mind for you and your family. We can explain the various options for structuring these documents so you can decide which type of appointment best suits your needs.