You Need to Find the Will to Put Your Estate in Order

Planning your personal estate can be a confrontational and emotional experience. It
is easy to put off these discussions because you haven’t experienced any issues relating to estate management, and you may not think it will happen to you. Unfortunately, anything and everything can happen, so you need to be prepared.

Estate Planning is More than Just a Will! 

It is a common misconception that planning your estate only involves writing your Will. This is not the case! Once you turn 18, it is important to consider the full scope of estate planning documents you will need to complete. A Will is an important part of the process, but it is still only a small part of managing your estate.

Draft Your Will Correctly

Many adults have Wills in place, however very few have a valid Will in place.  The infamous Post Office Will Kits, whilst cheap and efficient, are fraught with danger if completed incorrectly often leading to disastrous and expensive consequences for your loved ones.   It is critical to ensure you have a professional and up to date Will prepared for you taking into account your circumstances and objectives by a specialist estate planning lawyer.

If wedding bells are on the horizon then remember, your existing Will may be automatically revoked once  you exchange vows with your significant other.

Do Not Forget Your Enduring Powers of Attorney 

Should anything happen that causes you to lose you capacity such as an accident or dementia, having valid and well-drafted Enduring Powers of Attorney in place will ensure that there are no delays in medical procedures, payments of bills and any other commitments that need to be met.

An important document which is a part of the estate planning process is the consideration of who to appoint as your attorney under an Enduring Power of Attorney and Appointment of Medical Treatment Decision Maker. This is someone who is nominated by you to make financial, medical and lifestyle decisions  during your lifetime once you have lost your mental capacity. Without this critical document, anyone who wants to make decision on your behalf has to obtain orders from VCAT, which can be timely and costly resulting in  urgent matters being delayed or missed.

Be careful! Should you appoint joint attorneys in your Enduring Power of Attorney, this can become problematic, as it requires both attorneys to sign off on each and every decision.  Factors such as the distance that must be travelled to sign documents and the relationships between the attorneys can lead to complications.

It is important to regularly review your Enduring Power of Attorney documents.  Family dynamics can change so it is necessary to review and update your estate planning if anyone becomes estranged, too old or of unsound mind themselves.

Your Enduring Powers of Attorney are only one aspect of planning for loss of capacity. Your role in trusts, companies or an SMSF will need to be dealt with separately to your Enduring Powers of Attorney to ensure that all assets can continue to be managed on your behalf.

Modern Family

In the modern world, distributing your estate to your loved ones is far more complicated than it once was.

As we are seeing more and more blended families, distributing assets between biological children and a new partner or spouse can be a balancing act that often leads to disputes. Different states have different laws for contesting Wills. Victorian laws have changed making the class of eligible beneficiaries more restrictive than what they previously were, but estate disputes are still common between children and their step-parents.

There are other factors that must be taken into account:

  • Today, a lot of people hold a significant portion of their assets in super. Super does not automatically form part of your estate, so a binding death benefit nomination must be made. Other entities, such as family trusts must also be dealt with carefully, to ensure that control of these entities passes to the right person or people;
  • If your children or other beneficiaries have disabilities or other vulnerabilities, you may wish to consider implementing a testamentary trust. This will allow you to determine who controls and manages the estate assets for them;
  • You may also wish to consider including beneficiary-controlled testamentary trusts in your Will to ensure maximum asset protection and tax minimisation for your beneficiaries;
  • If you own a family business, be sure to detail how your business’ corporate structure will be managed to prevent any disputes.

Location is Key

Each state and country has different laws regarding Enduring Powers of Attorney and Wills and estates. If you have assets in different states, you should prepare Enduring Powers of Attorney in the state where most of your assets are located or speak to your estate planning lawyer about the appropriate Jurisdiction. Most States and Territories outside of Victoria have registration requirements where an Enduring Power of Attorney is required to be used for property. The witnessing requirements also vary from state to state.

Should you have assets overseas, you should have a Will prepared in each country where assets are held as there are different laws and tax liabilities that will need to be addressed.

 

Is important that you speak with an estate planning specialist as there are many factors to consider. The Succession Team at Morrows Legal can help you to determine the most appropriate plan for your estate needs. Contact Rabia Javed-May or Laura Harding in the Morrows Legal team for more information or to book a consultation.

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