Planning your Estate
Estate planning requires several steps. Even those with ‘simple’ family structures and modest assets should consider a range of matters to determine how their assets are distributed after death and how their legal, financial and health affairs are managed if they are incapacitated.
Good estate planning requires:
- Preparing for the inevitable – having a valid Will to appoint an executor / trustee and to determine who receives your assets when you die.
- Planning for the unforeseen – ensuring powers of attorney and appointments of enduring guardian are in place so your legal, financial and health affairs can be dealt with appropriately if you become ill, disabled or incapacitated.
- Ensuring your estate maintains value – distributing your assets in the most tax-effective manner, using a tailored approach specific to your circumstances.
- Protecting vulnerable beneficiaries – creating testamentary trusts to safeguard at-risk beneficiaries from third party creditors, estranged partners, or depletion of their inheritance due to incapacity, disability or dependency.
- Succession planning – ensuring appropriate arrangements are in place for business and company interests, whether those interests are to be wound up or handed down through generations.
- Minimising the potential for family provision claims – understanding family provision and implementing strategies to limit such claims.
Making a Will
Everybody over 18 years old should have a Will. If you do not have a Will, you die intestate and your assets will be divided according to the rules of intestacy which may not be as you would have desired.
A valid Will determines who should benefit from your estate when you die (your beneficiaries) and who will be responsible for administering it (your executors and trustees). A Will can be simple or complex and may also appoint guardians for minor children and provide directions for funeral arrangements.
When preparing or reviewing a Will, you should consider your family structure, your personal, and financial circumstances. The risk of a family provision claim being made against your estate after you die should also be considered. Revising your Will after a significant event such as birth, death, marriage, divorce or receiving a major inheritance, is also important.
Powers of Attorney and Enduring Guardians
A power of attorney appoints a trusted family member or friend to look after your legal and financial affairs should you be unable to do so yourself. The power of attorney can specify the extent of powers an attorney is authorised to exercise. It can operate for a limited time, such as while you are travelling overseas, for a one-off transaction or take effect indefinitely from the time you lose mental capacity (an enduring power of attorney).
An appointment of enduring guardian appoints a person to make lifestyle, health and medical decisions on your behalf if you lack capacity to make those decisions yourself. A guardian acts as a substitute decision-maker and may consent to medical and dental treatment and living arrangements. The appointment also authorises health care professionals to share your personal information with your guardian.
Administering an Estate – duties of Executors and Administrators
An executor is the person appointed under a Will to deal with a deceased person’s affairs after he or she dies. An administrator has the same role however is appointed by the Court through Letters of Administration when a person dies intestate (without a Will) or the person appointed under the Will is unable to act as executor.
Executors and administrators are the legal personal representatives of a deceased person and have significant legal responsibilities. They must ensure they are protected from potential liability in the event of a claim against the estate.
In addition to the practical matters required immediately after a person dies, executors and administrators must identify, secure and protect estate assets, pay estate debts and distribute the proceeds of the estate in accordance with the Will or the laws of intestacy. During the administration process, they will often deal with accountants, financial institutions, real estate agents and brokers, usually under the guidance of an estate lawyer.
Executors and administrators often need to consider matters outside their area of expertise, such as the tax implications on the sale or transfer of assets, the order of payment of debts (particularly in the case of an insolvent estate), the preparation of estate tax returns and the potential for a family provision claim to be made. Obtaining professional advice and guidance in these areas is essential.
What is Probate?
An executor may need to apply for a grant of Probate through the Supreme Court before administering an estate. The granting of Probate ‘proves’ the Will of the deceased and authorises the executor to deal with the estate. The requirement to obtain probate usually depends on the size of the estate, the nature of estate assets and how they are hold. Most financial institutions will require a grant of probate to release funds over a specified amount. Probate is also required to transfer real estate that is not jointly held.
Once Probate is granted, the estate assets vest in the executor and he or she may deal with the assets and commence administering the estate in accordance with the Will.
We work with individuals, families and businesses to put in place strategies to protect business and personal wealth, to ensure hard-earned assets are safeguarded in the face of life’s uncertainties.
Our experienced lawyers can guide you through the complex process of estate and succession planning. We will advise on the best way to protect your assets for future generations and ensure your estate planning documents provide clarity to minimise the potential for disputes and estate challenges.