Making a Will and preparing for life’s uncertainties is something many people put off, perhaps because they only have modest assets, or just do not make the time. Planning ahead however, ensures that your assets and legal affairs are managed by somebody you trust when you die or if you become incapacitated.
When a person dies, those left behind are asked to handle unique legal and financial matters at an already difficult time. Making time now to plan your estate can make things much easier for you if decision-making and daily activities become difficult, and for your family when you die.
Making a Will
If you are over 18, you should consider making a Will to ensure that a trusted person (your executor) manages your estate and your assets are distributed to your intended beneficiaries when you die. A Will can be simple or complex and can also appoint guardians for minor children and provide directions for funeral arrangements.
Wills should be reviewed regularly, particularly when your personal and financial circumstances change, Any Will you have made is likely to become out of date and no longer represent your wishes following changes or major milestones in your life.
What happens if I die without a Will?
Dying without a Will is referred to as dying intestate. In such cases your estate will be distributed according to a statutory formula. The rules of intestacy provide for a specific order of distribution to your next of kin, presumably designed to reflect society’s expectations as to who should benefit from the estate. Such rules however, may not necessarily reflect your real wishes or unique circumstances, resulting in undesired consequences such as:
- family members or friends missing out from an inheritance;
- a disproportionate distribution of assets between family members or leaving out more needy beneficiaries;
- a distribution to a family member with whom you shared no significant or meaningful relationship.
When a person dies without a Will, an application to the Court for Letters of Administration must be made by an interested person (usually the next of kin) so that person can deal with the deceased’s assets and liabilities, generally in the same manner as an executor would.
Getting help to manage your financial and legal affairs
For many reasons, we may need help managing our affairs when it becomes difficult or impossible to do so ourselves.
A Power of Attorney enables someone you trust implicitly (your attorney) to handle your legal and financial matters on your behalf and can be used if you are going overseas, have health issues, are involved in an accident, or reach a stage in life when you just need more help with these things. The person appointing the attorney is known as the principal or donor.
The appointment of an attorney enables that person to act in your place and do the things you would normally do yourself, such as signing documents, paying bills, doing the banking and even entering into legal agreements on your behalf.
A general power of attorney can last for as long as specified in the document (such as while a person is travelling) or as long as he or she has mental capacity.
A general power of attorney no longer operates if the principal loses capacity to make decisions. Accordingly, it may be more appropriate to prepare an Enduring Power of Attorney while you have capacity to do so. In such cases the authority given to your attorney continues, or endures, if you lose mental capacity.
Getting help to manage your health care and welfare
At some point in your life, there may come a time when you are unable to make a decision. It could be because:
- of a sudden accident or serious mental health episode
- of dementia or similar condition
- of a sudden serious stroke
- you are unconscious or in a coma
If this happened, how would you want decisions to be made for you about your health care, living arrangements and other personal matters? More importantly, who would you want making these decisions for you?
An Advanced Care Directive is a legal document appointing someone to make personal, medical and lifestyle decisions on your behalf and gives those who care for you a clear understanding of your wishes, preferences and instructions for your future health care, end of life, living arrangements and personal matters.
An Advanced Care Directive does not relate to financial decisions.
An Advance Care Directive must be signed while you have mental capacity but only commences in the event that you are no longer able to manage your affairs due to loss of mental capacity.
After a person dies, someone needs to look after their assets and administer their estate. An executor is the person appointed under a Will to do this (or in the case of an intestate estate, an administrator appointed by the Court through Letters of Administration).
Dealing with a deceased estate can be distressing and often involves complex issues at a time of grief and loss. Executors and administrators may need to liaise with a range of stakeholders to ensure the terms of the Will are upheld. They have significant legal responsibilities and often need to consider matters outside their area of expertise.
Executors and administrators should obtain professional advice to ensure that their duties are properly carried out and they are protected from personal liability.
An executor may need to apply for Probate in the Court before administering an estate. The granting of Probate ‘proves’ the Will of the deceased and authorises the executor to deal with the assets.
The requirement to obtain Probate depends on the size of the estate, the type of assets and how they are held. Most financial institutions require a grant to release funds over a specified amount. Probate is also required to transfer real estate that is not jointly held between the deceased and a beneficiary. Probate may also be recommended if contentious issues exist.
We can help put an effective estate plan in place tailored to your circumstances or assist with the legal requirements and administration of the estate of a loved one.