Will your family be taken care of if you’re not around?
What is ‘Estate Planning’?
Estate Planning is one of the most important steps any person can take to ensure that their final property, assets (estate) and health care wishes are honoured, and that their loved ones are provided for in their absence.
Developing an effective estate plan will make sure that the investments you make now are passed on to your family or beneficiaries in the most effective way and ensuring that any tax payable is minimised, ownership of assets passes to the right beneficiaries, assets are protected if any beneficiary has any legal issues and establishing a guardian for living dependents.
With family units becoming more complex, Estate Planning has become even more important in today’s society and often can involve more than a simple Will, it can be quite a complex area.
What is a Will and why do I need one?
One of the certainties of life is death and you want to ensure that you leave your hard-earned property, cash and other valuables to the people that you love. This is the ultimate reason why it is worth spending time to analyse how your assets are going to be distributed and this means making a Will.
A Will is a legally binding document that details your final wishes with regards to the distribution of your estate after you pass away.
A Will takes effect at the time of your death. It can cover things like how your assets will be shared, who will be the guardian of your children if they are still dependant, what trusts you want established, how much money you’d like donated to charities and specific final arrangements, such as whether to be buried or cremated, are also often part of the documents.
It is important to keep your Will valid and up to date. You may need to update your Will if your legal rights change, specifically if you marry, divorce or separate; have children or grandchildren; if your spouse or beneficiaries die; or if you have a significant change in financial circumstances.
Estate Planning is an important part of your overall financial plan and is an ongoing process that shouldn’t be left to the last minute. After all, we don’t know when that last minute will be!
What if I don’t have a Will?
Not having a Will can be an expensive, time consuming and often distressing process for family and loved ones.
If you die without a Will (known as ‘dying intestate’) or your Will is invalid, your estate does not automatically get transferred to the government. An administrator is appointed by the court which pays your bills and taxes from your assets, then distributes the remainder, based on a pre-determined formula, which may not be how you intended your assets to be distributed.
What is an Enduring Power of Attorney and why do I need one?
Estate Planning should also include setting out your wishes in the event you are unable to make decisions about your assets or your health. An Enduring Power of Attorney is used when you become incapable of making legal and financial decisions for yourself. This Power of Attorney allows someone to act on your behalf for property and financial matters only. It does not allow them to make other decisions (e.g. medical) for you.
Appointing someone as your Enduring Power of Attorney gives them the legal authority to look after your affairs on your behalf.
What happens if you don’t have an Enduring Power of Attorney?
If you lost your decision-making ability through illness, accident or trauma, and an Enduring Power of Attorney has not been appointed, it might be necessary for a person to be appointed to make any necessary financial or medical decisions.
If you do not have an Enduring Power of Attorney, there is a much higher likelihood of confusion, conflict and it may even have to go through a court procedure to get permission for someone to conduct financial affairs.
If you would like to learn more, please contact us on 1300 49 11 41.