Your Estate Planning Tool Kit
Estate planning is an important consideration for everyone – regardless of their age, stage of life, or personal circumstances. Having your legal affairs in order provides valuable peace of mind for you, and your family, if anything was to happen to you.
However, while many people may already have a Will they might not know what other options are available in the estate planning “tool kit”, or why they should consider having the full suite of estate planning documents in place.
What documents or tools can I use when planning my estate?
1. Power of Attorney - What is it?
A Power of Attorney is a legal document that allows you to nominate someone (or multiple people) to make financial decisions on your behalf (note for health and lifestyle decision making, see Enduring Guardianship below).
The type of decisions and transactions covered by a Power of Attorney include buying or selling real estate, shares and other assets, operating your bank account, spending money on your behalf and paying bills, such as rent.
General vs Enduring
A Power of Attorney can either be general or enduring. The main difference between the two is that a General Power of Attorney is no longer valid if you lose capacity to make your own financial decisions. Only an Enduring Power of Attorney allows your attorney/s to act on your behalf financially after you lose capacity to do so yourself.
Commencement
You may decide when your Power of Attorney is to commence. A General Power of Attorney may be useful, for example, if you are planning on leaving the country for an extended period. In that case, you could choose for it to commence and operate only during that time. In contrast, an Enduring Power of Attorney can commence, for example, as soon as your attorneys accept their appointments or only once a medical professional declares that you are unable to manage your own affairs.
A Power of Attorney only operates during your lifetime; it is no longer valid after you die.
2. Enduring Guardianship - What is it?
An Appointment of Enduring Guardian/s is a legal document that allows you to nominate a person/s to make health and lifestyle decisions on your behalf, if you lose capacity to make these decisions for yourself. This is particularly important when you have a major illness or if you become injured. Your appointed guardian/s, under an Appointment of Enduring Guardian, can decide matters such as:
- Where you will live;
- What health and personal services you will receive; and
- What medical treatment you will be given.
It is possible to appoint more than one person to make these decisions jointly, but the most important thing is to choose someone you trust who understands the importance of their responsibilities.
Commencement
An Appointment of an Enduring Guardian only commences once you have lost capacity to manage your own affairs and operates during your lifetime; it is no longer valid after you die.
3. A Will
Your Will is an important legal tool that documents your wishes regarding the distribution of your estate and who will receive things after you die.
If you don’t have a Will, all of your assets, which could include property, shares, cars, jewellery, furniture, and money in your accounts, will be distributed in accordance with the rules set out in the Succession Act 2006 (NSW) and not necessarily in the way that you would have wanted.
Anyone can make a Will, but it is always best to seek legal advice when considering how you would like to allocate your estate. An experienced lawyer can ensure your Will is legally binding and less likely to be contested in the future.
For more information on estate planning and how to ensure you have the right tools in place, contact Nicolas Moore at CDQ for more information.
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