From time to time, it may be necessary to appoint someone to manage your affairs on your behalf. This may involve granting financial or medical powers of attorney or an enduring guardianship.
Laws regarding the creation and operation of powers of attorney continue to change and it is important to periodically review your arrangements to protect you and your loved ones.
A proper estate plan
There are five components to developing an appropriate estate plan:
- Your Will
This is the legal document through which you appoint someone (the “Executor”) to deal with and distribute your assets in accordance with your wishes to your chosen beneficiaries.
Importantly, you can also use your Will to nominate someone to care for your children while they are under the age of eighteen (a “Guardian”).
- Testamentary trust
This type of trust is included in your Will and arises upon your death. Depending on the circumstances, testamentary trusts can provide powerful protection and tax advantages for your beneficiaries.
- Letter of wishes
This is a non-legal document that allows you to provide a context for the decisions you have made in your Will.
It can also include additional practical information to assist your executors, such as account numbers and computer passwords. Such a document is simple to update, making it easy to ensure its accuracy and efficacy.
- Superannuation death benefit nomination
Superannuation, like company and trust assets, is not dealt with in your Will. Accordingly, superannuation trustees may need to be specifically instructed regarding a death benefit nomination.
Given the amount of life insurance often held inside a superannuation fund, this can be very important.
- Enduring power of attorney
This provides the authority for an appointed person or persons to make financial, and sometimes medical and lifestyle decisions, on your behalf if you have lost the ability to make decisions for yourself.
Clarifying your intentions through appropriate estate planning may allow you to bypass the conflict and angst that can be caused by uncertainty. Rather than assuming estate planning is something unpleasant to be delayed or avoided, it is best to think about your Will and other estate documents as a powerful gift to those closest to you that may help preserve precious relationships.