When it comes to estate planning, it is never a one-size-fits-all approach. An effective estate plan considers a range of matters – your personal and financial circumstances, the type of assets you hold, your age and health, your family and your proposed beneficiaries. Estate planning can involve:
- Preparing for the inevitable – having a Will that appoints an executor and provides instructions about who receives your assets when you die
- Planning for the unforeseen – appointing attorneys and guardians to help with your legal, financial and health affairs for convenience or in times of crisis
- Protecting assets and vulnerable beneficiaries – using trusts to protect assets and safeguard at-risk beneficiaries
- Succession planning – ensuring appropriate arrangements are in place for business and company interests when you retire or die
- Minimising the potential for family provision claims – understanding family provision and implementing strategies to minimise potential claims
Making your Will
A Will is a legal document that appoints somebody you trust (your executor) to administer your estate when you die and directs how your assets should be divided between your beneficiaries. Your Will can also indicate to your family your wishes on other important matters such as who you choose as guardians of your children and specific burial arrangements.
Whether your Will is simple or complex, involving a lawyer to guide you through the process can help structure your estate to achieve its full potential. We will consider your individual circumstances and important issues such as taxation and superannuation. We will also consider your family situation and take steps, if necessary, to minimise the potential for disputes to arise after you die.
In certain situations, you may wish to consider establishing a testamentary trust.
A testamentary trust is a discretionary trust contained in a Will that comes into effect when a testator dies. A trustee is pre-appointed to manage the trust and distribute assets to beneficiaries in accordance with the rules outlined in the trust deed.
Holding assets in trust can help protect vulnerable or minor beneficiaries and safeguard assets from claims by third party creditors. The flexibility and control that a trust allows in distributing assets can also be advantageous when it comes to taxation.
Trusts are complex and advice and guidance is important to ensure the trust is compliant and structured to achieve the required objectives.
Powers of Attorney
A general power of attorney is a document authorising somebody to make decisions on your behalf regarding certain affairs for a specific time and while you have capacity. This may be for convenience, for example, while you are travelling overseas.
An enduring power of attorney allows you to appoint a person to make decisions on your behalf with respect to your legal and financial matters if you lose capacity to make those decisions yourself.
You should only choose somebody you trust to act as your attorney, as they will be making important decisions on your behalf which must be made in your best interests. It is also a good idea to talk to the person you wish to appoint to make sure they are comfortable and able to assist.
An enduring guardian can 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 can consent to your future medical and dental treatment and accommodation arrangements.
A guardian may need to make confronting decisions in challenging and emotional circumstances and those you appoint should understand your values, morals and wishes.
Probate/Letters of Administration
When a deceased person has a Will, an executor may need to apply for a grant of probate before the estate can be distributed to the beneficiaries. If the deceased does not have a Will you may need to apply for letters of administration.
Applying for probate requires the preparation of an application with supporting documents to the Supreme Court. A grant of probate deems the deceased’s Will to be their last Will and to be valid, which then authorises the executor to administer the estate. A grant of letters of administration, in the case of an intestate estate, operates in a similar way, providing authority for the administrator to deal with the estate.
Are you an executor of an estate?
In addition to obtaining a grant of probate, an executor has duties such as paying or collecting outstanding debts, identifying assets and preparing estate tax returns. An executor may also need to deal with challenges regarding the validity of a Will or claims made against the estate.
If you are an executor or have recently lost a loved one, we can provide guidance and reassurance to help finalise matters while ensuring your duties as executor or administrator are upheld.
Estate disputes and family provision claims
The validity of a Will may be challenged on the basis that it is void for lack of formality (not correctly signed/witnessed), lack of mental capacity (the testator was not of sound mind when the Will was made) or because it was made by the testator under duress or in fraudulent circumstances.
A family provision claim may be made by an eligible person seeking a share or greater share from an estate if it can be shown that a deceased’s Will (or a proposed distribution of an intestate estate) does not make adequate provision for the claimant. The claimant must be an ‘eligible’ person (as prescribed in the relevant state or territory legislation) and various factors will be considered in determining such a claim.
Estate disputes and family provision claims may proceed to court, but most are settled through negotiation and mediation. A successful claim can result in the terms of a Will or distribution of an intestate estate being altered in favour of the claimant.
We can guide you through the complex process of estate planning to implement tailored strategies to help protect and maximise your assets and provide clarity for those you love when you are gone.
If you find yourself involved in an estate dispute, or left out of a Will, our knowledgeable team can advise you of your legal position and will endeavour to resolve your matter without expensive and lengthy court proceedings.