Overview
Talking about death and incapacity can be confronting but it’s an important and necessary conversation to have. There is no escaping the fact that we are all going to die at some point and some of us will lose capacity while we are still alive. Some mistakenly believe that after we die or lose capacity, our loved ones can simply do whatever they want with our assets although this is rarely the case. If you die or lose capacity without having your estate planning documents in order, you risk adding considerable complexity, delay, costs and trauma for the ones you leave behind.
Estate planning in its simplest form is the process of documenting what you want to happen when you die or lose capacity. If you’re over the age of 18 you should at a minimum have a Will (deals with your estate and guardianship of your minor children after you die), Power of Attorney (how and under what circumstances your assets may be dealt with by others while you are alive) and Guardianship Appointment (decisions about your health, care and wellbeing if you lose capacity). Preparing these documents while you have capacity means that you choose who you want in these roles and how these functions will work. If you lose capacity without having these documents in place, your loved ones may need to apply to a Court or Tribunal to appoint a guardian and financial manager.
Back to TopWills
What happens to your assets after you die really depends on whether you had a valid Will and the value of your estate. The expression ‘your estate’ simply means all the assets and liabilities you had at the time of your death. Your assets include obvious things like your house, car and bank accounts but your estate includes all of your worldly possessions including personal effects, shares, intellectual property (such as Trademarks, Copyrights, Patents, Design Rights, Trade Secrets).
A properly prepared and correctly executed Will lets you appoint one or more executors (the person or persons you want to administer your estate). Your Will provides instructions on who you want to inherit your assets and who you want to appoint as the legal guardian of any children under the age of 18 (if any). If you have a valid Will, your executor can apply for a grant of Probate. Once Probate is granted, your executor is then permitted to administer your estate and distribute your assets in accordance with the instructions in your Will.
If you die without a Will you are said to die intestate and your assets will be dealt with under the rules of intestacy. Under these rules, eligible relatives are entitled to inherit from your estate and, depending on you circumstance, your assets could end up being distributed to relatives that you never wanted or intended to receive a share of your estate. One (or more) eligible persons will need to apply to the court for Letters of Administration. This can be a very complex process, particularly if you have children from a previous relationship or if any eligible persons have died before you. The eligible person will need to prove to the Court that you died without a Will and provide evidence of your marriages, divorces, all eligible relatives both alive and deceased. Any eligible relatives who do not join the application must consent to the application. Depending on your circumstances, this can be particularly time consuming (and expensive). The process of identifying, contacting and obtaining consents from all eligible persons can be especially difficult when eligible persons are estranged, living overseas or otherwise not in regular contact with other eligible relatives.
All costs associated with applying for Letters of Administration are paid from the estate which may (in some circumstances) substantially reduce what is left to be paid out to the eligible parties. Much of this can be avoided simply by having a valid and up to date Will. The relatively low cost of preparing a Will today may save your estate significant additional costs if you pass away without a valid Will.
If you don’t have a Will or Will is not up to date, don’t wait until it’s too late. Contact us today.
Back to TopPowers of Attorney
A Power of Attorney lets you appoint someone to manage your finances and make legal decisions on your behalf. That person is called your Attorney.
Powers of Attorney can be General or Enduring.
A General Power of Attorney only operates while you have capacity to make decisions for yourself. If you lose the ability to make decisions for yourself, a General Power of Attorney will cease to have effect. Perhaps you temporarily need someone to manage your finances and pay your bills while travelling, working overseas or recovering from an illness or injury and you want your Attorney’s power to cease if you lose capacity. In this case a General Power of Attorney may be appropriate.
An Enduring Power of Attorney continues to operate even if you lose the capacity to make decisions for yourself. It is usually a good idea to appoint an Enduring Attorney in case something unexpected happens and you temporarily or permanently lose capacity. If you don’t want anyone making decisions for you today and you lose capacity tomorrow through accident, injury or illness without a valid Enduring Power of Attorney in place, your loved ones may need to apply to a Court or Tribunal to appoint a financial manager. In this case you can stipulate that your Attorney (or Attorneys if more than one) can only act in the event that you have lost capacity with medical evidence from your doctor. If you appoint more than one Attorney you can require your Attorneys to make some (or all) decisions jointly.
Your Attorney cannot change your Will or make decisions about your health, care, medical decisions, or wellbeing however you can appoint the same person as your Enduring Guardian.
Back to TopGuardianship Appointments
Guardianship Appointments (also called Enduring Guardianships) allow you to appoint someone to make decisions about your health, care, medical decisions, and wellbeing. The person you appoint is called your Enduring Guardian and they can only make decisions for you if you’ve lost the ability to make these decisions for yourself.
You can appoint more than one Enduring Guardian to act jointly or on their own and you can also appoint backup Enduring Guardians in case one or more of your Enduring Guardians dies, loses capacity or otherwise are unable to act.
In the event that you lose capacity to make decisions for yourself, usually your Enduring Guardian (or Guardians if you appoint more than one) will make decisions about where you live, medical and dental treatments, and personal services however it is up to you to decide what powers they have (we will work through the options with you).
You can also empower your Enduring Guardian to make decisions about life support and organ donation but your Enduring Guardian cannot make financial decisions for you, change your Will or modify your advanced care directive (if you have one).
If you have lost capacity, financial decisions can only be made by your Enduring Attorney (if you have appointed one) or a financial manager appointed by a Court of Tribunal.
You can appoint the same person as your Enduring Attorney and Enduring Guardian.
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