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Planning for 2022: Get your estate plan done and give yourself peace of mind in the new year

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Attwood Marshall Lawyers Wills and Estates Lawyer, Natalie Comerford, joins Robyn Hyland on Law Talks on Radio 4CRB to discuss the importance of estate planning and what this entails.

Introduction

For many people estate planning is a task that is put aside or is perceived as being only necessary for the extremely wealthy or elderly. It involves more than just doing a Will. Many people assume the process is quite complicated.  However, in the wake of COVID-19 and a new year here, now is the time to ensure your most basic estate planning documents are in place to protect your estate and your family. Taking the time to understand what is involved in estate planning can be as simple as sitting down with an estate planning lawyer for one hour to ensure you are prepared to face the hurdles life can unexpectedly throw at all of us. 

From writing a Will to ensure your estate goes to who you intend it to after you die, to making an Enduring Power of Attorney to ensure someone you trust can manage your affairs if you lose mental capacity, to executing an Advance Health Directive to ensure your instructions are clear if someone needs to make decisions about your health care, you can consider these documents as insurance policies to give you and your family peace of mind.

Estate planning is just that – considering your overall circumstances and carefully planning what you need to do to ensure there is a smooth transition to whoever you appoint to handle your affairs in the event of loss of mental capacity or death.

What is estate planning and what does it involve?

An estate plan is generally made up of a series of three main legal documents that need to be put into place, hopefully before you need them because when the day comes that any of these documents need to be invoked, your family will be very grateful that you have prepared and have them in place. 

The first document, and probably the most widely known, is a Will.  Almost everyone has heard of the term ‘Will’ and have some idea or concept in their mind of what a Will includes. A Will is a legal document that outlines your wishes, and it distributes your property or assets after you pass away. 

The second document everyone should have, and perhaps the most important of the three, is an Enduring Power of Attorney. An Enduring Power of Attorney appoints a person, or in some cases multiple people, to make decisions on behalf of another in the event you lose capacity to manage your own affairs.

The third document that is discussed with clients when reviewing someone’s estate plan is an Advance Health Directive.  This is a document that formalises your wishes when it comes to your health care. It communicates your health care wishes at a time that you are unable to do this yourself and it directs medical practitioners about the treatment you want to receive, or in some cases do not want to receive. 

What does making a Will involve?

Identity Check

The process of making a Will begins with confirming the identity of the individual making the Will. To do this, your lawyer will check the required identification. Identity theft is a big problem, so this is a critical step to ensure that the Will-maker is who they state to be.  Law firms have very strict identification requirements that need to be followed.  In the event a court needs to consider your Will, it is very helpful to have your lawyer’s notes on your executor’s side to be able to prove that you were in fact the person who gave instructions for the document. 

Family Check

Next, there is a discussion about family structure. Because no two families are alike, this is an opportunity to discuss different options that would best suit a client’s unique family situation.

For example, a simple Will may be suitable for a family who wants to pass assets to their spouse, and then children and grandchildren.

Other families may have a very vulnerable beneficiary such as a family member with special needs, this family member would benefit from having a testamentary trust in place to help them make those financial decisions.

Alternatively, a blended family usually like to consider alternative structures such as putting a right to reside within a Will to protect the surviving partner and ensure they can remain in their home after you are gone. There is a lot of different alternatives that can be explored. 

Assets

The next topic to discuss when looking at your estate plan are the assets you own and how they are owned. Some assets form part of the Will and other assets fall outside the Will.  This is a concept that a lot of people are unaware of and it is our experience that after someone passes away and the administration process begins, those that have chosen to complete a do-it-yourself (DIY) Will are the people that often have tried to gift assets in their Will that don’t belong to them.  This can cause a lot of complications during the administration process.  This is one of the advantages of having your estate plan completed by an experienced estate planning lawyer, to ensure that you can avoid this pitfall and handle assets correctly, including non-estate assets such as superannuation

Appointing an Executor

Appointing an executor is a significant issue that must be given very careful consideration.  It’s a very important role and it is necessary to discuss back up provisions with clients just in case the person, or persons, you appoint lose capacity themselves or predecease you. The role is not suited to everyone and in some cases it may be best to appoint a professional to the role or as a co-executor to avoid conflict or disputes arising between family members and beneficiaries.

Burial or Cremation Wishes

Deciding on your burial or cremation wishes is a very personal and individual process. Whether you want to be buried next to another family member, or if you would like your ashes scattered somewhere that was special to you, there can be a lot to think about. You may have wishes that align with your religious beliefs, with some religions prohibiting cremation. Or alternatively, you may feel strongly about choosing a method that is more environmentally sustainable, with some studies showing that cremation may be more sustainable and eco-friendlier compared to burial. Ultimately, it is up to you and writing your Will is an opportunity to express your wishes on what your preference may be.

Gifts for beneficiaries

A prominent part of the Will is the distribution of the assets. As an estate planning lawyer, it is rewarding to discuss with clients who are going to get what and ensuring that the Will is worded in a way to give effect to the client’s wishes.  There are so many things that can go wrong at this stage and if a Will is written using ambiguous language or simply unclear, then who you want to benefit from your estate may end up missing out or being involved in costly litigation to try to have your Will upheld after you are gone. 

Drafting and Signing

Once a client has given their instructions, the estate planning lawyer will draft the document and send the client a copy to check. If no changes are required, the document is signed in the presence of two witnesses.  For Attwood Marshall Lawyers clients, each client has a security packet for their original documents, which are stored in safe custody free of charge. 

What is involved in making an Enduring Power of Attorney?

An Enduring Power of Attorney is a legal document that appoints a person, or people in some cases, to make decisions on behalf of another person.  Those decisions can be of a financial nature such as preparing a tax return, operating your bank accounts, selling your home, taking out a lease or voting at meetings, and that is just the tip of the iceberg.

The Enduring Power of Attorney also covers the appointment of a person, or people, to make decisions related to your health and personal care if you lack the capacity to make those decisions for yourself.  The types of health decisions that can be made for a person include, giving consent or refusing to give medication, decisions around where you live and the types of services you will receive.

There is a common misconception that if you lose mental capacity that your loved ones can step in and automatically manage your affairs and take control of your financial decisions. This is not the case – everyone needs to have an Enduring Power of Attorney in place to ensure someone that you trust can immediately step in to make those decisions.

For anyone to do these tasks you have to have granted them the power and the way to grant them that power to act for you is to ensure that you have got the appropriate legal documentation in place. 

Each state and territory have their own version of the Enduring Power of Attorney. If you are in Queensland you would have a Queensland Enduring Power of Attorney document in place, if you live in New South Wales, you will put a NSW Enduring Power of Attorney and Appointment of Enduring Guardian in place. 

What is involved in an appointment to do an Enduring Power of Attorney?

When making an Enduring Power of Attorney, you will usually start with a fact-finding activity – an estate planning lawyer will use the information gathered to discuss alternatives with the client to determine who would be the best person to appoint to this role.  It’s a very powerful position and you want to make sure you appoint the right person!

A lot of factors need to be considered, such as family dynamics and relationships, geographical locations, and the ability of a person to step in and act for you. You should always think of it like they are interviewing for a job, choose the best person or combination of people that is going to do the best job.    

If you change your mind after appointing an Enduring Power of Attorney, you must revoke your appointment and put a new Enduring Power of Attorney in place.  We often see this happen where someone has appointed a good friend many years ago, their circumstances change, and they no longer wish to give that person the same level of power.

When revoking an Enduring Power of Attorney, it is important to know and understand your responsibilities. You’re going to need to inform the original attorney and all the other people and relative agencies that the power has been revoked. Each state has a specific form or way that this is done, so you should always seek legal advice to ensure it gets done correctly. 

There is no formal registration process when making an Enduring Power of Attorney.  Each institute has their own policies on implementing and acknowledging the document.  Now a good way, or the only way we have really got now, is through the Land Titles Office.  Once they are registered in the Land Titles Office that often gives them more power.

The Advance Health Directive

The Advance Health Directive is a document that allows you to give specific directions about your future health care.  It can make your wishes known and it gives health professionals direction about the medical treatment you want, or do not wish to receive. It also allows for the appointment of another person or people to be your voice in the event you can no longer advocate for yourself. 

To make an Advance Health Directive you must be 18 years or older and have the capacity to understand the nature and the effect of the document.  This also means you need to be able to understand the likely effects of each direction you are giving, such as the effect of refusing medication that could potentially reduce your life span, or even consenting to medical intervention which could increase your life span but may affect the quality of that extended time. 

It is important to know that this document will come into play once you have lost capacity and you are no longer able to communicate health decisions for yourself.  This document deals with specific directions and you must involve your doctor who must also sign the form to certify that you appear to have capacity at the time you are executing the document. Without a doctor’s certification, an Advance Health Directive won’t be valid.

Just like revoking an Enduring Power of Attorney, there is a very similar process to follow if you want to change an Advance Health Directive after you have completed one. Each state will have a form that needs to be put in place.

What should you do if you don’t have an estate plan, or it needs updating?

As the new year kicks off, this can present an opportunity to make the commitment to ensuring that you finalise your estate plan and enjoy 2022 with the peace of mind of knowing that your legal affairs are in order and your wishes are legally documented.  By doing your estate plan you are reducing the chances significantly of your family members being hit down the track with complex and costly legal processes. 

Doing your estate plan doesn’t need to be a difficult or overwhelming process.  By engaging a qualified estate planning lawyer, the process will be made simple and you will be guided through the process and presented with the best strategy to suit your needs.

Estate planning is so important for people of all ages, not just the wealthy, not just the elderly, and not just people suffering ill health. Many people underestimate how much wealth they hold in superannuation, life insurance policies, and other non-estate assets that need to be dealt with properly to ensure that who you intend to benefit from these valuable assets will do so after you are gone.

How can Attwood Marshall Lawyers help?

While no one likes to think about death, a great gift family can give each other for the new year is having their affairs in order. If an illness, injury, or death unexpectedly takes place, it can be too late.

Attwood Marshall Lawyers is a leading estate planning law firm with one of the largest and most experienced Wills and Estates teams in Australia. We take a holistic approach to estate planning and ensure our clients get a personalised service that considers their unique circumstances and wishes. We can help mitigate the risk of someone challenging your estate and will look at what assets there are and how they can be structured to ensure the wealth you have built up goes to who you intend after you pass away.

We offer a fixed fee service so there will be no surprises. 

To discuss our estate planning services or to make an appointment contact Wills and Estates Department Manager, Donna Tolley, directly on 07 5506 8241, mobile 0423 772 555 or email dtolley@attwoodmarshall.com.au

You can also book online instantly by clicking here and booking through our website.

Read more:

Keeping your hard-won assets in the family – family trusts and ensuring assets transfer to the next generation

Attwood Marshall Lawyers offers free Wills to first responders and frontline health workers

Understanding assets that you cannot leave to your beneficiaries in your Will: How to ensure your assets go to who you want them to!

 

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