Proper estate planning is vital if you want to make sure that your partner and children are provided for during your lifetime and after.
Wills
A valid will is the only way to ensure your assets are disposed of according to your wishes.
If you do not have a will, your assets will be dealt with by legal rules-not in accordance with your wishes. This may result in an outcome which you do not want.
The only way to avoid this is to have a valid will prepared by a solicitor.
Your will should be reviewed regularly and changed along with your circumstances.
Did you know….?
- Not all assets can be dealt with in your will:
- Assets owned by you and your partner as joint tenants will automatically go to the surviving party and any instructions in a will, will have no effect at all.
- Superannuation cannot be disposed in a will. The Trustees of the Superannuation Fund have the discretion to distribute the funds when you die.
- Even if you have a valid will, the Supreme Court of Western Australia can determine the distribution of your property after your death. It can do so if you have not made adequate provision for your dependents.
- If you marry or become divorced after you have made a will, your marriage or divorce will have the effect of revoking your will unless a special clause has been inserted in it.
- Not all appointments of guardians are effective and you should seek legal advice before making such appointment because the Family Court has the overriding power to determine who will care for the children.
Testamentary Trusts
A Testamentary Trust is a trust that is set up under a will and is activated upon your death. Your assets dealt with in the will then automatically fall into the trust.
There are a number of taxation, social security, and other reasons for setting up a Testamentary Trust and we recommend that you seek financial advice on these aspects.
Some of the advantages of a trust are as follows:
- The Testamentary Trust enables assets to be managed by one person for the benefit of another. Spend-thrifty children will have all the security of the trust’s assets without the responsibility for their management, in much the same way as you manage your family finances for the benefit of your children during your lifetime.
- Trust assets are exempt from social security assets test for age and disability support pensions.
- The trust can protect your children’s inheritance from divorce and claims for property settlement.
A Testamentary Trust may be structured to meet the needs of a person with a severe disability.
Enduring Powers Of Attorney (EPA)
The Enduring Power of Attorney is a simple way to appoint someone to manage your affairs and deal with your assets when you lack the legal capacity to do it yourself.
If, for example, you are hospitalised, or need expensive special care, your attorney could liquidate some of your assets to meet your necessary expenses.
Because of the extensive power granted under an Enduring Power of Attorney, it should only be considered between people with a solid trust relationship, such as spouses and family members.
You should seek legal advice about setting up the Enduring Power of Attorney to ensure those you care for are not inconvenienced by your incapacity.
Enduring Powers Of Guardianship (EPG)
An Enduring Powers of Guardianship gives another person the power to make decisions about your lifestyle and medical treatment in the event that you do not have the legal capacity to make these decisions yourself.
You may wish to make an Enduring Power of Guardianship particularly if you are divorced or your spouse has died and there is any possibility of your children arguing over this issue.
Your Guardian cannot make decisions in relation to your financial affairs or your assets.
Advance Health Directive
Sometimes referred to as a “living will”, this document is a directive to your doctors to take certain steps or not take those steps regarding your medical treatment if you lack the legal capacity to direct them yourself. This would occur if for example, you are not conscious or are in the advance stages of dementia.