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Legal matters

The best time to get your affairs in order is the when you are in good health. Here we will consider some of the most common legal documents you should have and where to get help.

Enduring Power Of Attorney

An Enduring Power of Attorney (EPOA) is a legal document giving someone else who you nominate, the power to sign documents on your behalf or make personal, health and, if you choose, financial decisions on your behalf.

Even when you are in the best of health, there may be times, such as when you are travelling from home, when an important document needs your signature. This is when your attorney may act on your behalf.

There may be circumstances when a person loses the mental capacity to make decisions for themself and, if there is no one with an appropriate EPOA, the state may appoint the adult guardian to make decisions on the person’s behalf. The guardian has the power to make decisions regarding the person’s care and protection, even if this decision overrides the adult’s wishes.

You have the option of appointing an attorney purely for financial matters and signing documents on your behalf and the same, or a different person, to make decisions on personal or health matters.

You should nominate someone who you can trust as your attorney – a family member, friend or professional adviser. You also may appoint two or more attorneys with the power to make decisions individually or together.

You may nominate the same person or persons to make some decisions on non-health matters on your behalf or have different nominees for this purpose.

We never know what the future holds, so it is important to establish your EPOA while you are in a position to do so.

It is possible to obtain standard forms for this purpose but you are strongly advised to seek legal advice in the preparation of the document as questions may arise as to whether you may wish to limit the powers of people signing on your behalf or incorporate other special instructions.

An EPOA relating to financial matters comes into effect immediately it is signed or on a future date that you may nominate. In the case of personal/health matters, the EPOA only takes effect if you are incapable of making decisions yourself.  It ceases to have effect in the event of your death. You also have the power to cancel the EPOA at any time or to draw up a new document to replace the original.

Once the document is completed and signed, it is suggested you make several copies and have these certified as true copies by an appropriate legal person or Justice of the Peace. You can then provide a certified copy to your attorney in case it is ever required.

Wills

We all like to think we are immortal but as the common saying goes “the only certain things in life are death and taxes”.

If you die without leaving a valid Will, you leave what is known as intestacy.  Although you may feel your affairs are very simple and your immediate family will receive your assets, this is not necessarily true. 

The consequences of dying intestate can be serious for your heirs. At the very least, your estate and beneficiaries will incur greater than normal costs in administering and distributing your estate and they may pay some unnecessary tax. At worst, your estate may be distributed to unintended beneficiaries, or result in a prolonged, bitter and expensive court battle over who gets what.  

In any event, dying intestate means there could be significant delays in the final distribution of your estate. Should you die intestate, distribution of your estate will be determined by a formula set down in legislation. This may mean your assets do not end up with the person you would have chosen. It also means you have no control over who distributes your assets as this will be handled by the State.

It is very important to have specialist legal advice when preparing your will. There are many questions and options your legal adviser will discuss with you which may not be immediately apparent.  This is particularly important when you have dependent family members and you need to determine who will be responsible for them in the event of your demise. 

You will also need to carefully consider who will be your executor, as he or she will handle the administration of your estate. Matters such as your superannuation, responsibility for earlier partners and their children and whether your will may be contested, also need to be considered.

These and many other issues can affect whether or not your beneficiaries receive the entitlements you intend for them. 

If you already have a Will you need to consider if it is still current. Some questions to consider include:

  • Have you married or divorced since your Will was established?
  • Is your choice of executor still appropriate?
  • Do you want to include any specific gifts?
  • Have you appointed a guardian for dependent children?
  • Is your Will tax effective?
  • Do you have beneficiaries with special needs, such as disabilities?

Advance Health Directive

This is a document you may complete to clearly indicate your wishes as to medical treatments you may or may not wish to receive in the event of a serious illness or accident.

Although this is a lengthy document, it is simple to complete as it mainly consists of a series of optional questions. As well, there are sections where you make comments in your own words.

While this form can be completed on your own, you may wish to discuss it with your family and you are also required to have a doctor sign the form to certify that you understand the contents of the document.

Once completed, this form should be kept in a safe place and your family made aware of its location so that it may be produced in the event of your incapacity.

You also may wish to have certified copies made of the document for distribution to alternative family members, your GP, friends or associates.

Superannuation beneficiaries

You have the right to nominate the beneficiaries of your superannuation account, including any insurance death benefit. If you do not do so, then the balance will usually be transferred to your estate and this may not be the most tax effective option.

You should be aware also that under most circumstances the trustees of a superannuation fund are not bound by your nomination of beneficiaries and may use their own discretion regarding the payment of your benefits. 

If you do want the superannuation fund to be bound by your nomination, you should ask it whether it allows for a ‘Binding Death Nomination’ to be made, and if so, complete the form with your fund. This type of nomination must be renewed every three years, and should be renewed immediately if your personal circumstances change.  If in doubt seek advice from your financial or legal adviser.

Getting help

Help with legal matters is available from several sources including:

  • solicitors
  • Trustee companies
  • The Public Trustee.

Solicitors are usually the first people we turn to for legal matters and you should seek a specialist in estate planning as this is a highly specialised field of legal practice.  The solicitor will discuss with you all the possible complications that may arise in your particular circumstances and how to word your documents to achieve your wishes. Usually a Will and Enduring Power of Attorney are prepared at the same time and this may reduce costs.

Many legal practices also provide an estate administration service and can be requested to aid your executors or act as your executors.

Trustee companies also provide a Will and Enduring Power Of Attorney service and specialise in the administration of your affairs, either on death or in the event of incapacity. 

If you believe family arguments are likely after your death, it is preferable to appoint a trustee company or legal practice as your executor. A family member or friend may have great difficulty in administering your estate in such circumstances.

State governments operate a Public Trustee Office as part of the state justice system. The Public Trustee may prepare a Will for you at no cost but they will usually then become your executor and will charge normal legal fees for this service.

If you wish to seek legal advice and dont currently have a legal advisor, you may search the Law Society website in your state to find a suitable advisor located close to you. In some cases, pro bono support may be available.