For most of us, discussing our own inevitable demise is not the most comfortable conversation. Add to that our busy lives and it’s easy to let the job of putting our affairs in order slide right off the to-do list. But making time to plan your estate and keep it updated can provide both you and your loved ones with precious peace of mind.
An uncomfortable conversation
Estate planning is not just as simple as writing your will and filing it away. It involves developing a strategy around how your assets will be distributed to your beneficiaries after you die, which can involve the following:
Reviewing or Creating a Will
A will sets out how you want your estate to be managed and distributed after your death. It can also include the appointment of a guardian for your children. Without a will, management of your estate can be costly, time consuming and distributed according to state based legislation. It’s important to have a valid will and to review it regularly to make sure it is still in line with your intentions. While they may be effective for simple straight-forward estates, they don’t serve more complex estates as effectively. And a will with even a small flaw may lead to an expensive process if it is contested or it doesn’t have a residue clause which directs how to distribute assets not included in the original will.
Granting Enduring Powers of Attorney
If you were to become incapable of handling your affairs, control of your assets could revert to a person appointed by a court. It would be more useful if you had an enduring power of attorney set up now so that if you cannot manage your affairs, someone you trust and have chosen to act for you, can make the important decisions affecting you and your affairs.
Selecting an Executor
An executor distributes your assets after your death. This involves applying to the Supreme Court for probate, which gives them permission to execute your will. It can be a difficult job if your will involves setting up trusts and lodging tax returns. You should also ensure the person nominated is willing to be your executor, and have another nominated alternate as a back-up in case they pass away before you do, or change their mind. You could consider appointing your solicitor or using a trustee company.
A guardian can make decisions regarding where you live and your medical care if you lose the capacity to make your own decisions. It’s important to select someone you trust.
This is a trust created in a person’s will, which is activated upon the death of that person. Instead of assets passing directly from one person to another, the assets are passed to the Testamentary Trust and then administered by the designated trustee – usually a family member, a trustee company, accountant or a solicitor.