Preparing for the Inevitable
While we all prefer not to consider the two certainties in life - death and taxes - planning for our inevitable death is something that we all should take the time to do.
Most people know that a Will is a document which sets out what you want to happen to your assets after death, but not everyone is aware that other documents can and should be prepared to assist you while you’re still alive.
A Will is only valid upon your death and will set out who you want to manage your estate and guidelines as to what you want the Executor to do with your assets and who you wish to leave them to.
The Succession Act sets out a strict list of the beneficiaries of an estate where someone dies without a Will and that may not be the way they want their assets handled. Accordingly, you should ensure you have a valid Will so that your wishes are complied with upon death.
However, there are other important estate planning documents that can be prepared on your behalf to assist in the event you are unable to make decisions on your own behalf.
Power of Attorney and Enduring Power of Attorney are two documents you can prepare in case you are taken ill or seriously injured.
Specifically a Power of Attorney is a legal document in which you appoint a person to act for you to undertake certain financial dealings on your behalf, such as opening and closing bank accounts, withdrawing and depositing funds to your account, paying all your bills from your account, insuring your personal assets, dealing with Centrelink on your behalf and buying, selling, mortgaging or leasing your house.
A Power of Attorney can be drafted so as to apply only when you do not have the mental capacity to make financial decisions for yourself, such as being injured or suffering from dementia. In such situations a medical certificate would be necessary for the Power of Attorney to take effect.
It is extremely important to prepare these documents while you are fit and able, before you lose the ability to make these decisions.
Accordingly you should consider preparing a Power of Attorney when you update your Wills as part of your estate planning portfolio.
Obviously whoever you appoint to such a responsible role needs to be someone that you trust absolutely.
There are two types of Power of Attorney. A General Power of Attorney only operates until you die and the appointment is cancelled if you suffer a loss of capacity. As most people want their Attorney to act in their interest if they suffer loss of capacity, it is rare to request a General Power