Estate planning for the future
Having an Estate plan means not only having a Will, but also documents which govern how you will be cared for, both medically and financially in the future. Creating an Estate plan can provide you with peace of mind that your affairs will be looked after in the future should the time come when you are unable to make your own decisions, and that the people who are most important to you will benefit from your hard work throughout your life.
Together, three documents make up an effective Estate plan; A Will, a Power of Attorney and an Enduring Guardianship Power.
What is a Will?
A Will is a document that a person may make which sets out how they want their property and possessions (their estate) to be divided after their death.
Everyone over the age of 18 should have a will. Making a will is a proactive and positive thing to do and a document where you can formally state:-
- The person or persons who you trust to carry out the instructions in your will (the executor);
- Any specific items you wish to give and to whom;
- The people who matter to you and that you wish to provide for after you die; and
- Any other instructions that you may have, for example, if you wish to be buried or cremated.
Everyone is in a different situation, and Wills generally vary noticeably from one person to another. It is important to have the assistance of an experienced practitioner when making a Will.
Nominating a Power of Attorney
A Power of Attorney is a document that allows you to appoint and authorise a person to act on your behalf in relation to financial and property matters. You may appoint any person over the age of 18 years as your attorney, and generally this will be a family member or close friend, and someone that you trust. You may also appoint more than one person as your attorney, and can choose whether your attorneys act jointly or severally (independently of each other).
You may appoint an attorney for a limited period or for an unlimited period. Generally speaking, a Power of Attorney is effective from the time it is accepted by the attorney you have appointed, although there are other options and alternatives to that, such as if you should be unable to make decisions for yourself. You may also limit what Powers you give your attorney, such as ability to deal with a single bank account only.
Two types of Power of Attorney
There are two types of Power of Attorney. Firstly, a ‘General’ Power which will end should you lose mental capacity and secondly, an ‘Enduring’ Power which will continue to be effective even if you should lose mental capacity.
It is generally recommended that an Enduring Power is made to ensure that your affairs can be managed in case the unexpected should happen and you suffer loss of mental capacity.
Appointment of an Enduring Guardian
An Enduring Guardianship Power is a document which allows a person to appoint and authorise another person to make medical and lifestyle decisions on their behalf. The important difference between an Enduring Guardianship Power (“EGP”) and a Power of Attorney is that an EGP will only be effective when the person who has made the document is no longer capable of making decisions for themselves and is “a person in need of a guardian”, an EGP also allows for your guardian to provide legal consent on your behalf.
The person or persons you appoint as your guardian have the power to decide things such as where you live and what medical treatment you should receive, at a time when you are no longer able to make those decisions for yourself.
As with a Power of Attorney, you may appoint more than one guardian, and if more than one is appointed, you may elect to have them acting jointly, that is all together and unanimously, or severally (individually).
An EGP is also the document in which an ‘Advanced Care Directive’ can be included. This is a direction to your guardian or guardians that expresses your wishes concerning your future medical treatment.
There are several formalities which need to be followed when making these documents, and Turner Freeman Lawyers have expert Wills and Estates practitioners in each of our offices who can assist you in preparing not only your will, but also your Power of Attorney and an Enduring Guardianship Power. Our New South Wales offices are located in Sydney, Parramatta, Campbelltown, Newcastle, Penrith, Wollongong and Gloucester.
Call 13 43 63 to have a chat with one of our experienced Wills and Estates lawyers in relation to all of your estate planning needs and be sure to catch our next article which explores some of the post-death consequences of effective (and ineffective) estate planning.