Consequences of effective (and ineffective) Estate Planning
Many people might wonder why they should plan for the future and it is understandable why people may be reluctant to engage with the issue of estate planning. We naturally do not wish to consider our own mortality or to deal with making difficult decisions about what might happen when we age or after we die. Kyle McCabe‘s previous article titled Preparing and Planning for the future details some of the ways you can plan for the future. With the assistance of experienced advice from our estate planning solicitors, the process is probably much quicker and less challenging than you might imagine.
Having an effective and valid Will is very important. Your Will appoints your executor who performs a vital role after your death by arranging the disposal of your body, arranging your funeral and distributing your estate in accordance with your wishes. If you do not nominate an executor, disputes can develop between different people who all may want to administer your estate. In some cases, there may be people you would not want making decisions about your affairs after your death.
Not having a valid Will leaves your estate open to disputes and different types of litigation. If any kind of issue develops, the legal costs associated with resolving the issue will almost certainly be more than the cost of having prepared a valid Will, which may have helped avoid the issue entirely.
Different types of disputes can develop in relation to Wills, or the absence of a Will. These include:
- Whether an informal document may be treated as a Will
- Disputes about who should be the executor or administrator
- Who should make decisions about your burial, cremation or funeral
- Who should receive what items of property from the estate
- Who is entitled to what share of the estate; which can be complex if a blended family is involved (e.g. de-facto spouse, step-children etc)
- Whether adequate provision has been made for various eligible persons
A valid Will is invaluable in making it clear to the world what your intentions and wishes are after your death. If you do not have a Will, there is no way that your intentions can be carried out and the potential that your estate will be embroiled in a dispute increases significantly.
Power of Attorney
If you suffer an unexpected illness, accident or become unsound of mind due to age or infirmity, consider who would have the legal authority to make arrangements with your bank, pay your bills, deal with Centrelink or other organisations on your behalf. Often the answer is no-one unless an enduring power of attorney has been appointed.
In the absence of an enduring power of attorney people can face all sorts of challenges if they lose capacity. Due to privacy laws and the need for legal authority to be held when dealing with another person’s interests, simple tasks like trying to pay a bill or use a person’s bank card can be impossible.
Appointing a power of attorney is a good way of ensuring that the people you trust are able to make decisions on your behalf and in your best interests. If you do not have a power of attorney appointed, there is always the risk that your affairs will not be looked after correctly. This can include people using your resources for their own benefit, defrauding you without your knowledge or consent, and disposing of your assets in ways that you may not have intended. We encourage people to consider appointing a power of attorney as a means of providing security and protection for themselves into the future.
No-one likes to consider the prospect that they may lose the ability to make independent decisions about their health, welfare and medical treatment. It is an unfortunate reality that it is a risk that we all face. To address this risk, and to ensure the people you trust to look after your best interests are able to help you when you need help the most, an enduring guardian can be appointed.
In the event a person loses the ability to care for themselves or make decisions about where they live, an application can be made by appropriate persons to the Guardianship Division of the NSW Civil and Administrative Tribunal (‘NCAT’). The application process is often lengthy and decisions about a person’s health and welfare may need to be delayed until the NCAT has considered the application. This issue can be avoided if an enduring guardian has been appointed.
Disputes can develop about who is best placed to make decisions about a person’s wellbeing, and it is not uncommon for the disputes to be emotionally charged. Such disputes can be avoided if you plan ahead and make your wishes clear in a legally recognised enduring guardian document.
If you wish to avoid unnecessary disputes and the associated legal costs both before and after your death, we encourage you to consider your own Estate Plan. You have the freedom to choose the people you wish to be in control of your affairs in the event you lose capacity or die. Making the necessary arrangements now and not putting them off until later is the best way to ensure you are adequately protected.
Turner Freeman Lawyers are Estates Law experts. Our Accredited Specialist in Wills & Estates and solicitors can provide legal advice and assistance in all areas of Wills & Estates Law. Call us today on 13 43 63. Our New South Wales offices are in Sydney, Parramatta, Campbelltown, Newcastle, Penrith, Wollongong and Gloucester.