Have you got a valid will?
There are at least 3 documents you should consider as part of your personal estate planning:
- A will;
- A power of attorney; and
- Appointing an enduring guardian.
Will A will is a formal legal document that details who will take care of your assets and distribute them on your death in accordance with your stated wishes. Have you considered:
- who you would want to control your estate if you died?
- what would happen to your estate if you didn’t have a will?
- who you would want to look after your children until they are adults?
- that life insurance proceeds and superannuation benefits are likely not to become part of your estate on your death – do you have nominated beneficiaries?
- what would happen to your business if you died?
- who would control your family trust or company if you died?
- how your family could best receive any inheritance from your estate having regard to such things as
- their estate planning,
- asset protection measures, and
- tax minimisation?
Testamentary trusts (as opposed to the more simple forms of wills) can potentially save your family thousands in tax each and every year through income splitting opportunities and provide other benefits such as asset protection. If you pass away without having a valid will in place (dying intestate), then your estate will be divided up without regard to your wishes at all. If your will does not consider the above issues adequately or at all, then your intended beneficiaries could be receiving far less from their inheritance than you might hope and may pay more tax than is necessary every year after you die. Power of attorney Who would make decisions about your finances or assets if you were unable to (such as if you are in a coma, are unconscious or suffer from mental incapacity such as dementia)? You can appoint an attorney you choose to be able to manage your affairs. If you do not, NSW Civil & Administrative Tribunal (NCAT) can appoint a person that you do not know to control your assets and make financial and contractual type decisions for you. Appointing an enduring guardian Who would make decisions regarding your medical treatment and where you live if you are permanently or temporarily incapable of doing so? If you don’t nominate somebody as your enduring guardian, then NCAT can appoint a person to decide what medical treatment you get or if life support is not maintained. A will for your business? In addition to your personal estate planning, you should consider the need for any business succession planning – shareholders agreements, buy/sell deeds, partnership deeds, unitholders agreements, co-ownership agreements for land holdings and documenting any informal business arrangements such as leases, licenses etc. For more information, please call Michael Tzirtzilakis , Head of Commercial Law at Bell Partners Legal, on (02) 9249 7600 or email email@example.com