Importance of Estate Planning, Wills and Powers of Attorney
Estate planning can often be a confronting topic to discuss. However, many undervalue the importance of doing so and having a valid up to date will. Besides the fact that it would lighten the burden on your family during a time of mourning the importance includes:
- Allowing you to choose your preferred executor who is responsible in finalising any debts or liabilities and then distributing the remainder of your estate to your beneficiaries;
- Gives the executor clear understanding on how to carry out your affairs, as you would have wanted;
- Appointing your preferred beneficiaries who you intend to have a portion of your estate;
- Allows you to appoint a guardian for any minor children, allowing you input on who you believe would be best suited;
- May help minimise tax on income from the estate;
- Ensures your estate is settled quickly without problems and;
- Helps avoid unnecessary claims made against your estate.
Wills save your loved ones the time, trouble and money of having to liaise with lawyers and the court on how to allocate the assets and estate of the deceased if they died intestate, that is without a will. When this occurs, the legislative process takes over and determines which assets and estate go to whom meaning;
- Beneficiaries you may have intended to inherit your assets and estate may get less or nothing;
- Legislative process takes over and may distribute assets and estate to individuals you may have not intended to inherit;
- You do not get to appoint your executor;
- Disputes tend to arise between family members over who is the next of kin; and
- Higher tax may apply to beneficiaries without a will.
There are various types of wills we offer that you can to choose from. Depending on how you wish to distribute estate and to whom. Also, depending on the amount of estate you own.
Standard Will:
These types of wills are straightforward. They entail the appointment of an executor, beneficiaries and substitute beneficiaries in case you outlive your chosen beneficiaries, any conditions or provision that you wish for your beneficiaries or executors to follow, including, preferred funeral details or covering funeral costs and appointing a guardian for any minor children.
Testamentary Trusts:
A testamentary trust is a trust set out in a will taking into effect when the testator of the will dies and when estate administration is finalised. These types of wills are mainly created to protect assets.
These are best suited for families with underage children as it protects assets until they reach a certain age, when they can responsibly inherit assets left behind. However, it also allows beneficiaries that have diminished mental capacity as it allows you to appoint a trustee to act on that beneficiaries behalf making sure the asset or estate is used appropriately. Testamentary trusts are also suitable for protecting family assets from bankruptcy proceedings as it prevents creditors from accessing the trust. It is aimed at preventing misuse and protection of the testator’s assets and estate.
Power of Attorney:
This legal document allows an individual to appoint someone as their executive decision maker with respect to financial and personal matters once they cease to have the decision-making ability. However, in order to appoint an attorney, the individual must have the capacity to understand what it entails. If an individual’s capacity is questionable, a medical practitioner must assess whether they believe the individual has enough understanding to appoint an attorney.
Therefore, this is one of the primary reasons to appoint your attorney early on enough for yourself to understand the terms and appoint someone you trust. Many make the mistake of believing that they don’t need to appoint an attorney until they become ill or lose capacity. However, it’s safer to do so early, one ensuring you’re well aware of who you’re appointing and what matters your wish for them to deal with.
Appointing someone with the power to make legal and financial decision saves your preferred decision maker the hassle of going through prolonged trouble to be able to act in your matters.
Medical Treatment Decision Maker:
You may appoint a preferred individual to be able to make key medical decisions for yourself once you lose decision making capacity. This legal document gives consent to an individual you appoint, to make medical decisions on your behalf. It gives you the power to appoint someone who you believe would make decisions in the same manner as you, had capacity not been lost. Therefore, it is always important to speak to your medical decision maker in advance so they’re aware of your wishes if you were ever to lose capacity.
If you do not have a medical treatment decision maker, and capacity is lost, the Victorian Public Advocate is automatically allowed by law to make decisions. The Victorian Public Advocate makes decisions in the best way they believe would safe guard and represent your interests. As you would undoubtedly prefer someone in your family to make these decisions or the ability to select who makes these decisions and is aware of your circumstances and wishes, it is best to have someone appointed that will act in such a circumstance.
If you’re interested in enquiring about Wills and Powers of Attorney, do not hesitate to contact our firm by calling us on 9942 7790 or emailing our Principal Lawyer on nick@karolidis.com.au
Our lawyers will ensure the distribution of your estate and assets is handled in the manner you desire and will offer advice on what the best and most suitable option is for you and your beneficiaries.