Why you should look at your estate planning
There are at least 3 documents you should consider as part of your personal estate planning:
- A will;
- A power of attorney; and
- Appointing an enduring guardian.
A Will is a legal document that details who will take care of your assets and distribute them on your death in accordance with your stated wishes. Consider:
- Who you would want to control your estate if you died?
- What would happen to your estate if you didn’t have a Will?
- Who would look after your children until they are adults?
- That life insurance proceeds, jointly owned assets and superannuation benefits are likely not to form part of your estate on your death.
- What would happen to your business if you died? Business succession is often overlooked or not adequately dealt with by lawyers in wills.
- Who would control your family trust if you died? Have you even read the trust deed?
- How your family could best receive any inheritance from your estate having regard to such things as:
- their own estate planning; asset protection measures; and
- tax minimisation issues.
If your Will does not consider the above issues adequately or at all, then your intended beneficiaries could be receiving far less from their inheritance than you might hope and paying more tax than is necessary each year after you die.
If you pass away without having a valid Will in place (dying intestate), then your estate will be divided up without regard to your wishes at all.
Testamentary trusts can save your family thousands in tax each and every year though income splitting opportunities and also provide a level of asset protection to benefit future generations. See our previous article on Wills with Testamentary Trusts.
POWERS OF ATTORNEY
Who would make decisions about your finances or assets if you were unable to (such as if you are in a coma, are unconscious or suffer from mental incapacity such as dementia)?
You can appoint a power of attorney to be able to manage your affairs. If you do not, the NSW Civil & Administrative Tribunal (NCAT) can appoint a person that you do not know to control your assets and make decisions for you.
APPOINTING AN ENDURING GUARDIAN
Who would make decisions regarding your medical and dental treatment and where you live if you are permanently or temporarily incapable of doing so?
If you don’t nominate somebody as your enduring guardian, then NCAT can appoint a person to make those decisions, which can include what medical treatment you get or if life support is not maintained.
Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any commercial law issues, contact Craig Pryor on (02) 9521 2455 or email firstname.lastname@example.org.