No one ever plans to be sick or disabled. Yet, it's this kind of planning that can make all the difference in an emergency. In uncertain times like what we are currently experiencing we start to think about the importance of getting our affairs in order, but what exactly does this mean from an estate planning perspective?
As well as having conversations with those close to you about whether you want Bye Bye Baby played at your funeral, or a wish to have your ashes scattered at a favourite holiday spot, it is also important to have a number of legal documents prepared and in place.
Last Will and Testament
For most, the importance of having a valid Will is obvious, however, whether a person thinks they're too young, it's too hard, or they don't want to temp fate, many still haven't gotten around to executing a Will. Anyone over the age of 18 can make a Will, and if you're wondering if you need a Will, chances are you probably do.
Your Will is the most important estate planning document you can have. It allows you to speak when you no longer can. Your Will allows you to direct who will control and receive your assets after your death. Once you have children it is even more essential that you have a Will to ensure they are protected and cared for after your death.
What happens if you don't have a Will?
If you die without a valid Will your assets will be distributed according to the laws of intestacy. The law will decide where your assets go which means they may not go to the people you want them to. Most intend to leave everything to their spouse and then as an alternative to their children. If you die without a Will your spouse receives the first $100,000 of your estate and one half of the remainder. The other half of the remainder of your estate is distributed to your children. If the children are under 18, the Public Trustee manages those assets and this can cause financial hardship for your spouse.
Enduring Powers of Attorney
An enduring power of attorney allows you to appoint a person (the attorney) to make decisions about your property or financial affairs if you lose mental capacity. An enduring power of attorney can also operate while you still have capacity but may be physically unable to attend to financial matters. The attorney must always act in your best interest and in accordance with your instructions, keeping accurate records of their dealings with your finances or property. An enduring power of attorney does not permit an attorney to make personal and lifestyle decisions. That can be done in a document called an Advance Care Directive.
Advance Care Directives
The Advance Care Directive (ACD) is a legal document that outlines your preferences for your future care along with your beliefs, values and goals. Having an ACD will allow your family to know what you want if you can no longer tell them, and allows you to appoint a substitute decision-maker for when you can no longer make your own decisions. In an emergency or at times of crisis your family may find it difficult to decide what treatment is best for you. Your ACD provides direction and guidance for your future treatment and care at a time they will need it the most.
As the saying goes "The best time to plant a tree is 20 years ago. The second best time is now". It's never too early to get your affairs in order, but it may be too late if you don't act now. If you have any questions or concerns about writing a Will, the best thing you can do is seek advice from a lawyer who specialises in estate planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
