When I had my heart triple bypass and then cancer I had to get all my financial and medical documents together. It was quite a job so my advice is start now.
Wills & powers of attorney
No-one wants to think about death in the prime of life. But it’s important to decide what will happen to your assets when you die. Find out how you can give instructions to your family about your legal and medical preferences should you fall ill or lose the capacity to make those decisions yourself.
- Estate plans
- Testamentary trusts
- Powers of attorney
- Your legal and financial housekeeping
An estate plan includes your will as well as any other directions on how you want your assets distributed after your death. It includes documents that govern how you will be cared for, medically and financially, if you become unable to make your own decisions in the future.
You must be over 18 and mentally competent when you draw up the legal agreements that form your estate plan. Key documents might include:
- Superannuation death nominations
- Testamentary trust
- Powers of attorney
- Power of guardianship
- Anticipatory direction
It’s estimated that nearly half of all Australians die without a will, or ‘intestate’. Don’t let this happen to you. Make a will today.
A will takes effect when you die. It can cover things like how your assets will be shared, who will look after your children if they are still young, what trusts you want established, how much money you’d like donated to charities and even instructions about your funeral.
Your will can be written and updated by private trustees and solicitors, who usually charge a fee. Some Public Trustees will not charge to prepare or update your will, but only if they act as the executor of your will. Other Public Trustees may only exempt you from charges if you are a pensioner or aged over 60. Check with the Public Trustee in your state or territory.
You can buy will kits online but it’s a good idea to ask a solicitor to review your will to make sure everything is in order. If a will isn’t signed and witnessed properly, it will be invalid.
Keep your will valid and up to date as your legal rights change, specifically if you marry, divorce or separate; have children or grandchildren; if your spouse or beneficiaries die; or if you have a significant change in financial circumstances.
If you die intestate or your will is invalid, an administrator appointed by the court pays your bills and taxes from your assets, then distributes the remainder, based on a predetermined formula, which may not be how you intended your assets to be distributed.
If you die intestate and don’t have any living relatives, your estate is paid to the state government.
A testamentary trust is a trust set out in a will that only takes effect when the person who has created the will, dies. Testamentary trusts are usually set up to protect assets.
Here are some reasons why you would create a testamentary trust:
- The beneficiaries are minors (under 18 – 21 years old)
- The beneficiaries have diminished mental capacity
- You do not trust the beneficiary to use their inheritance wisely
- You do not want family assets split as part of a divorce settlement
- You do not want family assets to become part of bankruptcy proceedings
A trust will be administered by a trustee who is usually appointed in the will.
A trustee must look after the assets for the benefit of the beneficiaries until the trust expires.
The expiry date of a trust will be a specific date such as when a minor reaches a certain age or a beneficiary achieves a certain goal or milestone, like getting married or attaining a specific qualification.
Powers of attorney
Appointing someone as your power of attorney gives them the legal authority to look after your affairs on your behalf.
Powers of attorney depend on which state or territory you are in: they can refer to just financial powers, or they might include broader guardianship powers. You will need to check with your local Public Trustee.
Generally speaking, there are different types of power of attorney:
A general power of attorney is where you appoint someone to make financial and legal decisions for you, usually for a specified period of time, for example if you’re overseas and unable to manage your legal affairs at home. This person’s appointment becomes invalid if you lose the capacity to make decisions for yourself.
An enduring power of attorney is where you appoint a person to make financial and legal decisions for you if you lose the capacity to make your own decisions.
A medical power of attorney can make only medical decisions on your behalf if you become unable to do so yourself.
You can prepare a few other documents to help your legal appointees and family as you grow older, including:
An enduring power of guardianship that gives a person the right to choose where you live and make decisions about your medical care and other lifestyle choices, if you lose the capacity to make your own decisions.
An anticipatory direction records your wishes about medical treatment in the future, in case you become unable to express those wishes yourself.
An advance healthcare directive (or living will) documents how you would like your body to be dealt with if you lose the capacity to make those decisions yourself.
The documents you choose to draw up will depend on your situation, and the responsibilities you are happy to entrust to others. Get legal advice if you are not sure.
Choosing your powers of attorney
Nominate people that you know are trustworthy, if possible financially astute, and likely to be around when you need them.
Your legal and financial housekeeping
Once your paperwork is in order, it will help your executor and family if you list the legal documents you have and where they are kept.
Keeping a record of your personal information and notes on how your legal documents, assets and investments are arranged can also help you.
Here is a list of key documents to keep:
- Birth certificate
- Marriage certificate
- Enduring power of attorney
- Advance healthcare directive (also called a living will)
- Personal insurance policies
- House deeds
- Home and contents insurance
- Deeds and insurance policies for any other real estate you own
- Bank account details
- Superannuation papers
- Investment documents (securities, share certificates, bonds)
- Medicare card
- Medical insurance details
- Pensioner concession card
- Any pre-payments of funeral investments
Basically I went through my wallet and accounts to gather all the information my wife or son might need in case something happened. I even attached a copy of this book and other business logins etc.
The NSW Government’s Planning Ahead tools website gives more detailed information on advance care directives, wills, power of attorney and enduring guardianship.
A good will and estate plan can help make sure your wishes are carried out after you die, or if you are no longer able to make your own decisions.
When you have planning ahead documents in place – a Will, Power of Attorney and Enduring Guardianship – you can rest assured that your rights and wishes can be respected because they are properly documented.
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