Estate Planning - Estate Planning, a guide to creating wills in NSW
An effective estate plan protects your family members, creates asset protection and gives peace of mind. It considers your unique family circumstances, financial situation, real estate, the existence of discretionary family trusts, and details the best way forward for your family's future as well as your own.
The legal documents that form part of your estate plan should include a simple will or a will with testamentary trusts, an enduring power of attorney, appointment of enduring guardianship, a binding superannuation death benefit nomination, clear instructions for executors and all the right tools for estate administration.
The terms of the will should accommodate life changes such as the buying and selling of real estate, changes in personal belongings, and how best to protect your assets from a family provision claims in the supreme court of New South Wales. Having a valid will means that your estate is managed under a grant of probate rather than letters of administration and therefore less costly and less onerous. Costs that come from beneficiaries money and assets of the estate. The passing of a loved one is a difficult time for those left behind.
Your will can have schedules as to how to proceed in different circumstances, such as assets to your surviving spouse and otherwise to your children or the children of your children. the expert advice of an experienced estate lawyer can help you navigate this complex area of law.
A will with one or more testamentary trusts offers enhanced protections of a deceased's estate. As any family lawyer, experienced lawyer, and all estate lawyers will tell you, testamentary trusts can protect the value of your estate from family law division, such as the former spouse or former defacto of your beneficiary. The will can also incorporate a special disability trust or protective trusts to protect death benefits from going to the wrong persons.
The Enduring Guardianship appointment nominates the person or persons who make decisions about your medical treatment at a time when you may lack the mental capacity to make your own decisions. It is a written document allowing the appointee to give consents to medical care and lifestyle decisions. You can use this document to provide your wishes relating to future health care and also provide specific health care directives.
The Enduring Powers of Attorney differs from a general power of attorney in that it remains valid in the event of your incapacity. This document appoints the person or persons you choose to make your financial decisions (as opposed to medical decisions), manages your bank accounts, legal affairs, financial affairs, and financial assets. The appointee in your document becomes your legal personal representative.
A binding nomination is your directive to the trustee of the superannuation fund as to how your death benefits should be distributed. The right advice from your estate planning team can help you decide between the possible beneficiaries, such as 100% to the estate, 100% to a particular person, or some other type of distribution. If you have a self-managed superannuation fund (SMSF), reviewing the trust deed enables seamless succession.
The NSW succession act, describes persons that could have a legal right to be considered in your estate. It is a good idea to consider and address all possible beneficiaries so as to to minimise the loss of your estate assets through estate litigation. That is just one of the ways an expert wills lawyer and estates team can help you create a great estate plan.
To create the best estate plan for your individual circumstances, estate planning lawyers, listen to your wishes, consider your financial circumstances, and offer legal advice that creates an estate plan tailored to your own circumstances.
Once your documents are created, we document your testamentary capacity, and discuss where your will should be stored so that it is in a safe place but also accessible to you and your executor. One possibility is the NSW Trustee and Guardian Office's Wills Safe.
Here are the answers to some commonly asked questions:
How does the Estate Planning process work?
At AR Legal and Mediation, you are in good hands. From the first meeting through every step of the way, we simplify estate planning. We are a boutique law firm and happily work with your financial planning expert. You can instruct us from the comfort of your own home, come to our offices, give your instructions while you are on an extended holiday, ask us anything about elder law and confidentially discuss your family's needs.
Step One: Assemble
We gather all your information, listen to your wishes for gifting, caring, and protecting, plus identify other information that may be needed.
Step Two: Enhance
We identify and fortify your existing structures such as reviewing life insurance beneficiaries, superannuation nominations, superannuation trust deeds. We also advise you and discuss the most protective and tax effective way forward to following your wishes, so that your assets and loved ones are shielded.
Step Three: Create
This is where we create the documents that protect you and your family into the future.
Many people put Estate Planning in the too hard basket because there are too many things to think about. You don't have to get bogged down in details like who gets what because when the time comes, you might not even have those things.
A good Estate Plan covers changes in what you own now and how this might change over the course of time.
So what do you need to consider?
Your Executor - whether you need one, two or more and maybe a backup plan.
Guardian of your minor children.
Who you want to look after with your Estate and whether the added protection of Testamentary trusts is beneficial.
Who should be your Power of Attorney.
Who to appoint as your Enduring Guardian.
These considerations change over time too, and so Estate Plans need to be reviewed on a regular basis, every two to five years or when major events occur such as children becoming adults, marriage in the family, divorce in the family, friendships changing, personal needs changing. Review doesn't mean update, just checking to see that your Estate Plan is still relevant and reflects your wishes.
It is easy to get bogged down in how to distribute what you own right now but this will likely change over time. It is more important to have an Estate Plan that is flexible, considers the people you care about, and best looks after their needs and your assets.
What can you Gift in your Will?
This is tricky because you can only gift what you own when you die. This means that if you have money in joint bank accounts, property as joint tenants or assets in trusts such as money, shares, businesses or real estate, these can’t be gifted in your Will because you won’t own them when you die. Joint ownership means that if one owner dies, the survivor or survivors are the legal owners of the asset.
If your Will gifts your car, shares, jewellery, watch or house and you then sell that item before you die, then the gift fails because you won’t own it when you die.
Who can challenge my Will?
Under NSW law certain persons can expect to benefit from your Will.
These people are called eligible beneficiaries and include your spouse, defacto and children, as well as dependents, persons living in a close, personal relationship and former spouses (s57 Succession Act 2006).
Any of these persons can make a family provisions claim against your estate.
Win or lose, claims can drain the estate of lots money. Your Estate Plan should consider all eligible beneficiaries.
What is a testamentary Trust?
A Testamentary Trust is a trust created by a Will to protect the gifts given to that person or persons. Some advantages of a testamentary trust are:
The income of the trust can be shared among beneficiaries, including children, which helps to minimise tax.
As the beneficiaries don't legally own the assets, the assets are protected from Bankruptcy, Family Law property division, and Beneficiaries who aren't great at managing money.
What is an Enduring Guardian?
An Enduring guardian is the person you appoint to make decisions about your health and well-being when you can't do this for yourself. Your guardian chooses where you need to live and what care you need. Your Guardian can also give consent for your medical and dental treatments.
It can be a good idea to have more than one Enduring Guardian as long as they can work together. You can also appoint backup guardians. Sharing your values with your guardian helps them to understand what decisions you would make for yourself if you were able.