Did you know that there is much more to effective Estate Planning than creating a Will? 

Estate Planning encompasses the preparation and execution of a number of tasks that enable the management of an individual’s financial, legal or medical affairs in the event of their incapacitation or death. While having a Will is certainly a vital part of any Estate Plan, it is not the only important part. 

Here is an overview of some of the other parts to be included in an Estate Plan.

General Power of Attorney (“General PoA”)

The PoA is a legal document which allows you (known as the Principal) to appoint another person, entity or trustee (called an attorney) to manage your financial and legal affairs whilst you’re alive. Your attorney can do things like manage your bank accounts or enter into contracts on your behalf. An attorney can act on your behalf whilst you’re overseas on vacation.

The power you give your attorney can be limited in scope (e.g. to only operate certain bank accounts) and effect (e.g. state that the attorney’s power is effective from a certain date or for a certain period).

Enduring Power of Attorney (“Enduring PoA”)

As you might expect, an Enduring PoA is similar to a general PoA, but it has some additional properties. While a general PoA lapses once the Principal loses capacity, the benefit of an Enduring PoA is that it continues to be effective until the time that the Principal passes away.

As with a general PoA, an Enduring PoA can be utilised when you are unavailable due to overseas travel. The Principal of an Enduring PoA can limit the scope of the attorney’s appointment such as nominating that it will only take effect once a doctor has confirmed that the Principal has lost capacity. It may also set such conditions as the medical certificate needing to be reviewed and renewed at regular intervals.

Enduring Guardian (“EG”)

The EG is a legal document which enables you to appoint a person (called a guardian) to make decisions on your behalf regarding your personal, medical and lifestyle choices. The guardian will only be able to act on your behalf once you have lost capacity.

A guardian is normally able to make decisions regarding:

      Medical treatment (e.g. surgery or dental treatment)

      Accommodation (e.g. as whether you need to move into an assisted care facility)

      Personal care services (e.g. haircuts)

Advance Health Directive

An Advance Care Directive is a detailed document which specifically outlines the healthcare treatments you would like or refuse, if you were in a position where you are unable to make or communicate your decisions. The Directive will help your family and doctors know what treatment you want so they don’t have to make those tough decisions for you.

Superannuation & Life Insurance Death Benefits

Superannuation and life insurance death benefits do not normally form part of your estate as they may be paid directly to your nominated beneficiary. If you fail to nominate a beneficiary, your death benefit might be paid in a way you do not desire.

To ensure that this does not happen, you should consider making a valid beneficiary nomination (e.g. by way of a binding or non-binding nomination to your superannuation fund) as part of your Estate Planning.  

When determining who to nominate, you will also need to consider the tax implications of your decision. Superannuation death benefits paid to individuals that are non-dependents will be subject to tax. Whereas superannuation death benefit payments made to dependents are not subject to tax.

Business, Company or Self-Managed Superannuation Fund

Are you a business owner or director of a company or have a self-managed superannuation fund? If so, then you should consider how these entities will be managed in the event that you are unable to do so in the future as part of your Estate Planning.

Legal advice is normally required to review lengthy documentation (such as a Company Constitution or Self-Managed Superannuation Fund Trust Deed) to find out what happens in such circumstances. Further legal documentation may be required to ensure that what happens in the future reflects your wishes.

Secure Your Wishes with a Solid Estate Plan

As none of us have a crystal ball to find out when we might lose capacity or die, we always recommend that anyone over the age of 18 should have a comprehensive Estate Plan in place that covers all of the above items, where appropriate. This is the best way to ensure that you and your estate are managed in accordance with your wishes.

Contact our team of Will and Estate Planning legal specialists on (02) 9223 9166 or submit an online enquiry to schedule an appointment to discuss your personal Estate Planning needs.