Why should you do a Will?
If you do not make a legal will, your estate will be distributed using a fixed formula determined by the government. This formula is applied regardless of your situation. However, if you make a will:
- You can decide how to divide your estate between family, friends and charities
- You can appoint who you wish to administer your estate
- You can indicate you preference as to a guardian for your children
When should you do a new Will?
You should at least review your Will whenever family or relationships change. For example when you get married or start a family or start a De Facto relationship.
What other documents should I consider other than a Will?
In addition to a basic Will you might consider a Testamentary Trust, Power of Attorney and Enduring Guardianship or an Advance Directive.
Yvonne Cassianos has a Masters of Law (Applied Law) in the area of wills and estates.
What do these terms mean?
Power of Attorney
A general power of attorney allows your attorney to act on your behalf in relation to any financial transactions.
It can be useful to ensure that during temporary absences such as overseas travel your financial affairs are being looked after. However, if you become incapable
of providing your attorney with clear instructions this document will automatically become invalid.
Testamentary trusts are designed to provide maximum flexibility and allow for tax-effective distribution of capital and income as well as providing possible protection of your beneficiaries from third parties such as creditors.
Your financial adviser will assist your executors determine how best to manage your estate for the benefit of your beneficiaries, taking into account risk management, taxation and other issues.
The incorporation of testamentary trusts into a Will is not relevant to every situation but in many cases they offer valuable advantages over simple Wills. Testamentary trusts – which can be
discretionary trusts, capital protected trusts or tailored to suit your requirements, are similar in many respects to trusts created by deed whilst you are alive.
Appointing an Enduring Guardian enables you to appoint one or more people (known as Enduring Guardians) you trust to make lifestyle and personal decisions relating to your care and well-being such as where you live and the health care you receive.The power only operates if you are not capable of making your own decisions. An Enduring Guardian may exercise many of the powers a parent exercises as guardian of their children, for example:
- where you live
- what health care is in your best interests
You may add additional powers to this document if you wish.
In an Advanced Health Care Directive you can direct your treating medical professionals what treatment you wish to accept or reject. For example, you may not wish to receive mechanical nutrition and hydration to stay alive if you have been in a coma for an extended period of time and your treating doctor does not believe you are likely to come out of the coma.
An attorney is a person you trust who you appoint to carry out financial and business tasks on your behalf e.g. withdrawing money from your bank account. You can choose whether the attorney can act straight away or if they can only act if you become unable to act for yourself or whether they can only act for a specified period or for a specified task.
For example, you may wish to appoint a child or partner to act only while you are overseas on an extended holiday. If you want your attorney to retain the power to act on your behalf even if you suffer dementia or in some other way lose mental capacity the attorney must be appointed as an “enduring” attorney. You may revoke a power of attorney at any time while you have mental capacity but you will not be able to revoke an enduring power of attorney once you lose mental capacity.