Estate Planning: Protecting Your Future

Estate Planning: Protecting Your Future

Estate planning is the process of preparing how your assets and liabilities will be dealt with when you either no longer have capacity to make decisions for yourself while you are alive or once you pass away. This largely comes down to three documents, being an Enduring Power of Attorney (“EPOA”) and an Advance Health Directive (“AHD”) for while you are alive, and a Will for after you are gone.

While you are Alive – EPOAs

An EPOA is a document that allows the person preparing the EPOA (the principal) to appoint someone they trust (the attorney) to make decisions on their behalf after a certain point in time with respect to financial and / or personal and health matters.

In the EPOA, the principal will confirm when they want the EPOA to become active, meaning when the attorney can make decisions for them. This can be:

· Immediately.

· When a doctor certifies that the principal no longer has legal capacity to make decisions for themselves.

· When they are admitted to hospital.

· When they are travelling overseas.

· At a certain date, like on a 90th birthday.

When considering when to have an EPOA become active, a principal should consider any relevant issues that may affect their capacity in the future, such as family history of dementia, early signs of any condition that may affect their capacity, and even overseas holidays, etc.

Deciding who to appoint as your attorney can be a daunting task or it can be quite simple. Generally, you should choose someone you trust, who knows your views, wishes, and preferences, will understand their obligations and duties, and importantly, who will be available and confident to make decisions on your behalf. Naturally, Joe Bloggs may trust their daughter, Jane, but since she moved to New Zealand, she may no longer be the best candidate because it will likely be difficult to make timely and correct decisions when she does not have boots on the ground. Nevertheless, a principal can appoint more than one attorney to make decisions for them either on a joint basis (where all attorneys must agree for a decision to go ahead), which can be best in situations where big decisions must be made, by majority decisions, or separately (where any of the attorneys may make the decision without conferring with others), which can be suitable in situations where not the attorneys are in different cities. Moreover, to be eligible to be an attorney, a person must be older than 18 years old, not be the principal’s paid carer, or service or health provider, and cannot be a bankrupt.

Importantly, a principal is not giving their attorney(s) strict instructions that they must follow to a T. Instead, the principal is setting out their views, wishes, and preferences, which the attorney must consider when making decisions on the principal’s behalf. Consequently, depending on what the EPOA allows the attorney(s) to do, should the principal become incapacitated, the attorney(s) can:

· Run their business.

· Access their bank accounts and deposit or withdraw funds.

· Pay their bills, manage their investments, and lodge their tax returns.

· Make lifestyle decisions for them, such as selling their property and / or moving them into an aged care facility.

· Make a Will on their behalf, etc.

This is precisely why the principal must ensure that they choose the right attorney(s) for this post.

Irrespective of your circumstances, preparing an EPOA is a smart estate planning move as it allows you to protect your interests should you lose capacity while you are alive.

While you are Alive – AHDs

You can also make an AHD to allow you to make decisions about your health care and treatment in the future, and to appoint an attorney to make decisions on your behalf, in the case that you lose capacity to do so for yourself or you lose the ability to communicate these decisions to your doctors.

As opposed to an EPOA, in an AHD, you can confirm your specific preferences and instructions on various important issues, such as:

· Where you want to die.

· Life-sustaining treatment.

· Experimental health care,

· Termination of a pregnancy.

· Blood transfusions, etc.

Primarily, people that that have an urgent and serious health condition or a high-risk surgery approaching will use an AHD to confirm what they would like to happen before their ability to make health care decisions for themselves is potentially compromised. However, an AHD should not always be prepared as a “firefighter’s response” after the medical problems arise. This is because your ability to make decisions about your health care could be affected very suddenly by an accident, a heart attack, or rapid-onset conditions, among many other things, at which point it would be too late to have an AHD put in place.

Regardless of what might happen, planning for the worst is always prudent. If you were stuck suffering in a hospital bed or unconscious in an operating theatre unable to communicate your wishes to your doctors, there is a chance that your loved ones may make decisions that are contrary to your wishes. Therefore, preparing an AHD now that clearly sets out your instructions and preferences can be a very wise decision when planning for your own future.

After you are Gone

The Will is the one thing everyone knows they should get around to doing but they just cannot make time for it, or something more important comes up, and it just does not happen. However, if you die without a Will, the relevant legislation will determine how your assets will be distributed and to whom, and who will become guardian of your underage children, among many other things. Importantly, you also will not get to choose who your executor is, being the person that oversees the administration of your estate. Naturally, dying intestate can create a lot of confusion and cost for the family you have left behind, as well disputes.

By leaving a Will, you will avoid this uncertainty by confirming your instructions for such things as:

· How your debts are paid.

· Who receives which of your assets.

· Who your executor will be.

· How your executor will pay for your funeral.

· Who will become your underage children’s guardian.

· What will happen to your business, etc.

Understandably, you should not leave these decisions up to chance, especially when you could be saving your family and friends a lot of hassle and cost by having your Will prepared now.

At-Home Estate Planning

You can find guides and forms for EPOAs and AHDs online and you can also purchase DIY Will kits to allow you to prepare these yourself at home. However, it is often far too easy for a layperson to overlook a key issue or to make a momentous mistake that severely changes your intended wishes or invalidates the documents entirely. Accordingly, considering the importance of these documents and the consequences that can arise for your family and friends, we always recommend that you seek legal advice and have a professional assist you with the preparation of an EPOA, AHD, and a Will.

Planning for the Future

By making an EPOA, AHD, and a Will (or a combination of the three that is right for you), you can protect your future and the future of your loved ones. All you need is to be at least 18 years old, have legal capacity to make decisions for yourself, and obtain the right advice from a legal professional. So, if you are ready to properly plan your estate and protect your future, contact Salerno Law’s Wills & Estates Team to discuss how we can assist you. Contact Salerno Law for more information about victim support. T: +61 (7) 5575 8011 | E: