It’s quite common for people to spend a lot of time focused on building their wealth but give little thought to what happens to it all after they die. Many laugh it off, saying “I don’t have much” or “the kids can have my debts”. I can assure you it is no laughing matter for the family at the time of death, as only then do they gradually learn what arrangements are in place (or not) and what this means for them. Without the correct estate plans, this job is extremely costly and time consuming.
Estate plans include Wills, Powers of Attorney and Advanced Cared Directives (formerly Power of Guardianship).
A Will documents who inherits your assets and possessions once you have passed away and who is responsible for managing and distributing the estate on your behalf (the executor). This excludes money and assets in superannuation or any other type of trust, which have their own rules. In South Australia, marriage ordinarily revokes any previous will. Those who die without a will have their affairs dealt with according to intestacy laws, which are slow and unlikely to match what you may have intended.
Power of Attorney
A Power of Attorney appoints a person or trustee of your choice to manage your financial or legal affairs while you are still alive.
Advanced Care Directive
An Advanced Care Directive outlines your lifestyle wishes if you are too unwell to make a choice. For example, it nominates the person who decides to switch your life-support machine off.
A surprisingly high amount of people do not have any documented estate planning arrangements. Reasons why may include; cost, time, effort or simply not being aware of its importance.
Most general legal practises offer estate planning services, although our experience is that they are often not thorough. A surprisingly high number of clients who have seen a lawyer in the past to arrange their will, do not have a Power of Attorney or Advanced Care Directive. We find this odd given the insignificant additional cost involved. Typically, this is because lawyers act on instruction only. The trouble is – you don’t know what you don’t know. How can you instruct someone to provide you with specific estate planning solutions if you don’t know what they are? Experienced practitioners who operate in this space will know what questions to ask, which is why we usually recommend seeing someone who specialises in this area, rather than who is merely convenient in town.
While we cannot create these documents for our clients, we have a good enough understanding to alert and guide them through the process.