3 Key Elements of Estate Planning
Yiota Tsoukalis broadly reviewed what is required for proper estate planning – essentially, the development of a tailored strategy that addresses your assets and personal matters in the event that you lose mental capacity and are unable to make decisions, or if you pass away. Building on that review, I focus here on 3 key elements:
Your Will
A Power of Attorney (or PoA), and
An Advance Personal Plan
Your Will
Let’s look at the first – your Will. This is an incredibly important legal document that many people simply do not take the time to do – lawyers included! Then, if and when they do finally turn to addressing it, the view often is that it is merely a “simple Will” – something that should be dealt with quickly and extremely cheaply. I think this view is often taken as people do not understand its true value, and particularly what it can mean if you do not have one.
If you allow me a little ‘legalese’ just one moment, if you pass away in the NT without a Will you are said to have died ‘intestate’. By not having a Will, what you have effectively done is permitted the government to decide what happens with your estate. This is outlined, step by step, in the Administration and Probate Act (NT). The ultimate decision that this process can lead to is where a person is not survived by children, a parent or next of kin – their estate is considered to be ‘bona vacantia’ or ownerless property and the Northern Territory itself becomes entitled to it.
Just stop and think about that for one moment – by not making the time and taking the responsibility to ensure you have a valid Will, the special items gathered and wealth that you have created over a lifetime will now be distributed in accordance with a law of the NT. This law will not have regard to any special relationships you had or any ideas you may have held about where you wished particular items or sums of money to go. Ultimately, your entire estate go to the NT itself.
Power of Attorney
This is another document which is extremely useful and often not looked upon as importantly as it should be. It is valuable as it enables another person – your attorney – to deal with property and financial matters by signing legally binding documents on your behalf. This can only occur while you are alive and can be limited to a particular period of time.
A good example to consider its usefulness is if you are travelling for an extended period of time. This is particularly so if you were to be travelling overseas. At such a time, you are able to give your attorney access to your bank accounts so as to pay your bills and manage your finances. They are able to sign leases and enter contracts on your behalf.
While modern communications, particularly email and the ability to share documents, is making such matters easier, a power of attorney remains valuable in circumstances where day-to-day oversight of property and financial matters is required and you are physically absent and also unable to be contacted – in other words, having a long and well-earned break away from any kind of screen!
APP
Finally, there is the Advance Personal Plan, which used to be known as an Enduring Power of Attorney here in the NT. This is an extremely important document as it enables your attorney to make decisions in the key areas of health care, living arrangements and financial matters. Such a document only comes into effect in the event that you lose decision-making ability.
However, while this is the time that it comes into effect, the beauty is that you actually have one which outlines the manner in which an attorney is now to make decisions on your behalf. The aim of the document is that these directions will have been made after you have engaged in a discussion with loved ones about your values and wishes, and how you require certain scenarios to be addressed. For example, you may direct that you do not want palliative care and that you want to pass away at home. Such a direction may be crucial because, at the key time, you may not be able to speak to those around you.
With such a direction being written, your attorney, family and medical staff have clear evidence of the manner in which you wish certain scenarios to be dealt with. This can alleviate the distress and anxiety which may potentially arise in such situations.
Consider the 3 steps and make your decision…
These 3 steps are an essential part of your estate planning process. Please consider them carefully and then take your first step.
For our part, we aim to make these steps as accessible, easy and cost-effective as possible for you – so stay tuned for an announcement in the near future!
Should you require any assistance with regards to estate planning please contact us on 89416355 to book an appointment or contact the writer at dominic@bowden-mccormack.com.au.
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The above summary is based on the law as at 05 October 2020.
It covers the relevant legal matter in a general way and is intended for information purposes only rather than as specific legal advice.
Bowden McCormack does not assume any duty of care in relation to this document and specific advice should be sought and obtained in relation to one’s own circumstances before taking any action on the matter addressed in the summary.
