While many people are unlikely to nominate estate planning, or “thinking about what will happen to my assets when I die”, as something on their “most wanted things to do” list, in reality it belongs on everyone’s “must do” list.
Estate planning involves making clear decisions about who will manage your legal, financial and personal affairs if you lose capacity, and how your assets will be distributed after your death. Proactive planning reduces stress for family and friends. It also helps ensure the right people manage your affairs if you become unable to do so.
Without clear instructions, estates often end up in costly legal disputes. These disputes can reduce the value of the estate and create unnecessary conflict between family members.
To help you get started, we have set out below some common questions that arise when planning your estate. This information is general only. We recommend you seek professional advice based on your individual circumstances.
What is a ‘Last Will & Testament’?
A ‘Last Will & Testament’ (often called a ‘Will’) is a written document that sets out how you want your assets distributed after your death.
A Will is different from a Power of Attorney (POA). A POA allows another person or company to manage your assets while you are alive. You still need a Will to deal with your assets after death.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney appoints a trusted person (or people) to make legal and financial decisions on your behalf if you lose capacity, become unwell, or travel overseas.
You appoint attorneys to act for you. Most people choose close family members, such as a spouse or children. You should choose someone capable and trustworthy, as they must act in your best interests.
Your document should clearly set out the powers your attorneys have. This helps them manage all of your assets, including superannuation.
What is an Appointment of Enduring Guardian?
An Appointment of Enduring Guardian lets you appoint a trusted person to make health care, medical treatment and accommodation decisions if you cannot make them yourself.
Most people appoint close family members, such as a spouse or children. This appointment is especially important for older people and those who live alone.
I don’t own very much. Do I really need a Will?
The short answer is yes.
A Will gives you confidence that your wishes will be followed and your assets will be distributed as you intend.
Even small estates can become costly if disputes arise. Legal disputes reduce the value of the estate and often leave less for beneficiaries.
I made a Will years ago. Should I update it?
A Will does not usually expire, but you should review it regularly.
Life changes often require updates. Marriage, divorce, children, inheritance, or buying property can all affect your Will.
You should obtain legal advice before making changes. Even small updates can have unintended consequences. Any changes must also be properly signed and witnessed to remain valid.
Are there rules about who I must leave my assets to?
You can generally decide who receives your estate. However, Family Provision legislation allows a court to change a Will if it does not adequately provide for eligible people, such as dependants.
This risk increases in blended families or where relationships are strained. Careful planning helps reduce the chance of a dispute and potential legal challenge.
Who should I appoint as my Executor?
An Executor carries significant responsibility. While many people choose a family member or friend, you should first consider whether they can manage the role.
An Executor may need to arrange the funeral, manage assets, pay debts, and oversee the estate until probate is granted. They may also need to deal with disputes.
Where conflict is likely, an independent Executor can help ensure fairness and reduce stress on family members.
However, professional Executors may charge fees. Legal advice can help you decide what is appropriate for your situation.
What happens if I die without a Will?
If you die without a Will, you die intestate. State law then decides how your assets are distributed.
This means you lose control over who receives your estate, and the outcome may not reflect your wishes.
Can a Will be disputed or changed after I die?
Yes. A Will can be challenged in certain circumstances.
A court may change a Will if it finds that a person was not adequately provided for, such as a dependent. This can result in the court redistributing the estate.
A Will can also be challenged if the person lacked testamentary capacity. This means they did not have the mental capacity to understand and make the Will at the time it was signed. Conditions such as dementia or serious illness may affect this.
A properly prepared, signed and current Will reduces the risk of disputes. Careful drafting also helps ensure your wishes are followed.
Poor estate planning can create significant financial and emotional consequences. We recommend you seek advice from our firm before preparing or updating your estate planning documents. We have extensive experience in this area and can assist with any questions.
If you or someone you know needs more information or legal advice, please contact us on 02 9949 4022 or email
[email protected].
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