Basic Rules for Estate Planning and Wills for Families

Basic Rules for Modern Estate Planning & Wills for Families

Don’t know where to start?
Here are some basic guidelines to follow when getting your Family's Estate Planning and Wills sorted.

Over time, most people will have amassed a significant list of valuable assets during their lives, but when they are first starting out, they may use a Life Insurance policy to create an immediate inheritance available now, until their assets increase in value later.

01

Get your Power of Attorney sorted first

The beginning of all good Estate Planning starts with understanding why everyone needs a Power of Attorney document so you have somebody legally authorised to make financial decisions for you if you're unable to because of a sickness, injury, or absence.

02

Power of Enduring Guardianship sorted next

While this document's name is slightly different in each Australian state, the intention is the same - to legally appoint somebody authorised to make health and lifestyle decisions for you, if you're ever unable to because you lose mental capacity. While there is a legal hierarchy of who medical staff must consult first to make life-saving decisions about you, you may not wish to give away that power to someone you would not choose yourself. Choose and legally nominate your own ‘Responsible Person’ with a Power of Enduring Guardianship document.

03

Know who you want to leave your assets to upon your passing

Think about your long term picture. Do you have dependent children? Are your children now adults with their own families? Is your family more a family of choice than a biological one? Do you wish to leave your assets only to a handful of specific people and restrict who can make a claim on your Will?

04

Know who you do not want to leave your assets to upon your passing

Do you suspect certain people may contest your wishes in your Will? Do something proactive about that and make sure you include a ‘Considered Person Clause’ in your Will to help identify and exclude them. Take action today. Remember only Estate-Assets are transferred via a Will, so learn about Non-Estate Assets.

05

Is it possible future beneficiaries of your Will may face Divorce, Bankruptcy or Addictions?

Looking into the future and covering all possibilities is impossible, but we can use a Protective Will to address the top 5 risks that future beneficiaries and their families may face - the need for protection for Bankruptcy, Divorce, Addictions, Superannuation Proceeds, and Vulnerable Beneficiary Maintenance Trusts. There are clearly some life events that may unexpectedly affect us all later which could interfere with receiving and keeping a future inheritance. Take action today through your Will to safeguard any future inheritance.

06

Appoint Guardians for your children under 18, just in case

Possible future Guardians for Children can be nominated in your Will. While such nominations if ever needed must ultimately be approved by the Family Court, your legal nomination of them in your Will now has significant sway with the court's final decision later.

07

Make sure you fund potential future guardians to care for your children adequately

If you have children or frail-aged parents that require looking after in the event you unexpectedly pass away, make sure you leave sufficient funds (or leave a dedicated life insurance policy for this purpose alone) to fund the care and provision of the vulnerable people in your life.

08

Insist upon safe storage of Wills & Legal Documents in a Safe Document Service - No exceptions

Make it known to your family and Wills Executor all your original Key Legal Documents are securely stored and held in trust in a dedicated legal document storage facility and that access will require 100 points of ID and a death certificate. Remove any question of lost Wills or assertions of ‘possible tampering with a legal document’.


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Enduring Power of Guardianship — for people

The Power of Enduring Guardianship (aka Power of Enduring Attorney aka Medical Power of Attorney — the names are different in each state to make things confusing) allows you to appoint someone to make lifestyle, accommodation and medical and dental decisions for you, only if you have lost your mental capacity and cannot make those yourself.

This could be for a range of circumstances from sickness, serious injury or frail age. The power of this document is effectively dormant until you lose mental capacity.

Each Australian state and territory has its own guardianship document name

  • Enduring Power of Guardianship – New South Wales, Tasmania, and Western Australia
  • Appointing Medical Treatment Decision Maker – Victoria
  • Enduring Power of Attorney – Australian Capital Territory and Queensland
  • Advanced Care Directive – South Australia
  • Advance Personal Plan – Northern Territory

The Enduring Power of Guardianship document our clients build with us is valid in every Australian State and Territory.

Enduring Power of Guardianship – for families

People don't always do their best under pressure. Couples and family members by their nature usually assume responsibility for each other's actions when needed.  While this may be accepted within the family structure or an ethnic culture expectation, when a person loses their mental capacity, there are strict legal considerations to be addressed.

  • Medical staff may require a legal document trail when faced with grieving, angry, or competing family members.
  • Bank staff concerned to safeguard against elder abuse may require a legal document trail
  • Current de facto partners of previously married partners may face competing loyalties and many LGBTQI+ relationships may need to confront biological family members who refuse to recognise the choices and relationships of their sibling in an LGBTQI+ relationship.

All that to say this: An Enduring Power of Guardship document can remove these uncertainties at a time of understandable grief and anxiety.

Practical Steps: When to create this legal document?

Immediately.
Where possible, clients usually immediately appoint their partner as the Attorney, so their Power of Enduring Guardianship document comes into legal effect immediately. Only after your partner cannot do the job, you let one or two of your trusted friends or children carry out the job of being an Attorney for you.

  • Print out two copies and sign each of them so they become two original documents.
  • You should always speak to your potential medical attorneys and make sure they're happy to take on the onerous job of holding the attorney position in an emergency situation.
  • Let them know where the Power of Guardianship document is kept. For example “At my home in my grey filing cabinet and when it is needed you can get the Medical Guardian POA and accept it then”.
  • For Sapience Clients using our National Secure Document Service, store an original of this document with them as well so that if a local copy is lost, your Attorney can arrange for a local solicitor to confirm their identity and send for the original document, if it is ever needed.

How long does an Enduring Power of Guardianship last?

The document once activated, is set to remain enduring and lasts as long as mental capacity is not present.

Modern Estate Planning documents everyone needs

The essential 3 Key Legal Estate Planning documents everyone needs.

  1. A Power of Attorney – a document where you authorise ahead of time a person of your choosing to legally act on your behalf and make financial and practical decisions for you, if you cannot because of sickness, illness, or absence.
  2. A Enduring Power of Guardianship – a document where you authorise ahead of time a person of your choosing to legally make medical and significant lifestyle decisions for you, if you cannot because you've lost your mental capacity.
  3. A Simple Will or Protective Will – a document to make your instructions clear and legal about
    • who should receive your estate assets and entitlements when you pass away, and
    • who should not,
    • how those beneficiaries can be protected, and
    • a nomination of a children's Guardian for any dependent children you may have.

Additionally people usually follow-up with

  1. A Letter of Wishes – where you can record additional instructions to your Wills Executor about the care of pets, gifts and related details that change often.
  2. Using Secure Document Storage for all legal documents

When it comes to Modern Estate Planning, there is no such thing as average. No two set of circumstances, backgrounds and needs are identical, nor are their plans for how they protect and provide for themselves and those they love.

You can purchase all these documents through Sapience Financial with the assistance of your financial advisor.

Frequently Asked Questions about Enduring Powers of Guardianship

Who can be appointed as an Enduring Guardian?

The Attorney acting as the Enduring Guardian must be over 18 years of age, understand the responsibility, and cannot be someone who receives payment for taking care of the person. The enduring guardian should be someone, who knows them well, a person they trust and can be relied on to make the best decisions on their behalf.

When do the Attorneys formally accept your Enduring Powers of Guardianship authority?

There is no legal requirement for an Attorney acting under an Enduring Powers of Guardianship to accept your EPOG within any time frame. An Attorney accepts your EPOG many years later only if it is needed. And if you appoint more than one Attorney, they accept many years apart from each other.

Your Attorney acting under an Enduring Power of Guardianship document does not need to accept their appointment on the same day. They may be currently living outside of Australia in different countries. Your Enduring Powers of Guardianship authority will not come into operation for that Attorney until that attorney countersigns the document you have already signed. The countersigning can be done when the POA is actually needed as the document cannot be used unless you have lost mental capacity.

Does my Attorney need to hold an original copy of the Enduring Power of Guardianship document?

There is no legal requirement to provide your nominated Attorney with the original document. Provide them with a soft copy and make sure they know where the original is safely sorted for when it needs to be activated. Additionally have your financial adviser record the location of the document and for Sapience Financial clients who use our National Secure Document Storage Service an original copy can be secured safely with them for life.

Do I need an Enduring Power of Guardianship for every State I live in?

Australia is a federation of States. Each State has its own EPOG . For example, an NSW EPOG only works while you are in New South Wales. If you live in two States or near the border of one like the Australian cities of Albury (NSW) and Wodonga (VIC) you will need an EPOG  for each state. As a guide, wherever you own property, have a EPOG for that state or territory in place.


How we can help

If you're in a relationship or part of a family, setting up your Enduring Power of Guardianship is the next logical step in helping you get your modern estate planning documents sorted. If you're in a vulnerable business structure, it forms an important key legal document to safeguard your business interests too.

Contact us for a confidential chat about your needs.


Related: Types of Personal Estate Planning documents we work with

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