As we roll along into the new year, we remind you that it is a great time to review your current estate plan (or draft your very first one) to protect your loved ones should something happen to you.
Estate planning offers peace of mind in knowing that the people you love most will be protected and provided for, and any risks to your estate are minimised.
What do I need?
Many people may put off creating a plan for their future during this busy start to the new year. After all, planning for you and your loved one’s future can feel overwhelming. Additionally, with the hustle and bustle of everyday life, it can be difficult to think so far ahead.
Getting an up-to-date Will drafted which accurately reflects your wishes and accounts for your current circumstances is critical. A will is a legally binding document that lets you determine how you would like your estate to be handled upon your death. If you die without a will, there is no guarantee that your intended desires will be carried out. Having a will helps minimise any family fights about your estate that may arise, and also determines the “who, what, and when” of your estate.
Do you ever think about what happens to everything and everyone you care about if you suddenly find yourself in a situation where you can’t make decisions? That is where an Enduring Power of Attorney comes in.
An enduring power of attorney is a legal document that allows you to appoint someone you trust to make decisions for you during your lifetime if you no longer have the capacity to do so. An enduring power of attorney usually takes effect when you lose the capacity to manage your own affairs. Losing capacity does not just happen to people who are ageing. It can happen at any time and it may be temporary or permanent. People can lose capacity for decision making due to intellectual or psychiatric disability, acquired brain injury, dementia or temporary illness.
When considering your Will or Enduring Power of Attorney you should consider the following questions when it comes to choosing people for the roles in your estate planning:
- Will they serve in the role you appointed them (e.g. as executor of your estate or guardian of your children or attorney for your personal, health and financial decisions)?
- Are they comfortable taking on the responsibilities you leave them in your estate plan, should anything happen?
While you may be afraid that mentioning your estate plan or medical decisions, rest assured that this is one of the best things you can do for your family.
Even if the topics of death and incapacity can be awkward subjects to discuss, doing so, will allow you to make more assured decisions and give you the confidence that your estate will be dealt with in the manner that you intended.
What if I already have these documents in place?
Once you have prepared your plan, it is easy to forget about it and move on.
Unfortunately, relationships change, people change, asset structures change, and unexpected events happen in everyday life. While you may want to avoid re-visiting your estate planning documents, you may want to use this time to review your current estate plan and get things sorted before you get too far into the new year.
As your life changes, your estate plan should change too. For example, major life events like marriage, divorce, adoption, childbirth, and the death of a loved one are all reasons why you would need to update your estate plan.
Substantial changes to your estate often warrant a reconsideration of your plan, especially if there are large additions (or subtractions) to your assets.
Estate planning checklist
Below is a quick checklist to help you determine if a review of your estate plan may be needed:
- Bought or sold significant assets (including a business);
- Changed your name, or anybody named in your Will changed theirs;
- Received an inheritance;
- Married, separated or divorced;
- Had a child, adopted or fostered a child;
- Your children have grown up and started to get partners of their own;
- Death of your executor, guardian or beneficiaries or a desire to change your executor, guardian or beneficiaries;
- Desire to provide for new beneficiaries;
We encourage you to review your estate plan every two to three years to ensure your wishes are accurately reflected.