Wills & Estate Planning
The process of creating a Will and estate plan may be complex but is key to protecting your loved ones and ensuring your assets are distributed according to your wishes after you die. In Victoria, the Wills Act 1997 sets out the requirements for a valid Will, and the Administration and Probate Act 1958 governs the process of distributing an estate. Getting advice from an estate planning lawyer is important to ensure that your Will complies with these laws. An experienced estate planning lawyer can also look at ways to structure your estate to help manage tax outcomes and minimise potential disputes or legal challenges.
Why do you Need a Will?
A Will is the key legal document that sets out your wishes after you pass away. It should be carefully considered, prepared by an expert, and provide clear instructions to your loved ones.
The Will appoints an executor (the person who will ‘administer’ your estate) and deals with the difficult task of distributing your assets and dividing them between your beneficiaries, as relevant. Your Will can also select guardians for your children if both parents were to pass away while those children were still minors.
A well-planned Will protects your assets and minimises the risk of expensive legal disputes concerning inheritance.
What is a Testamentary Trust?
Sometimes a simple Will leaving everything to your spouse and then your children is sufficient. Other people may prefer to establish a more complex Will (known as a testamentary trust) which provides extra protection and potential tax advantages for the beneficiaries of your Will.
A testamentary trust is a discretionary trust contained in a Will that comes into effect when a testator dies. A trustee is pre-appointed to manage the trust and distribute assets to beneficiaries in accordance with the rules outlined in the trust deed.
While trusts can be complex, and there are ongoing costs involved, they can help protect assets or beneficiaries in a number of ways. For instance, if a person wants to leave gifts to young children, or otherwise vulnerable beneficiaries, a testamentary trust can assist in ensuring that funds are used to benefit those individuals without giving them control of the assets. A testamentary trust can also help to protect assets from third parties, for example, if a beneficiary is at risk of bankruptcy or being sued.
When Should you Review your Will?
A major change in your personal or financial circumstances might mean you need to review and possibly update your Will. These include:
- the birth of a child
- separation or divorce
- commencing a new domestic relationship
- the passing of a beneficiary or executor named in your Will
- selling or purchasing major assets including real estate
- starting or investing in a business venture
- receiving an inheritance or disposing of a major asset
- a change in your health circumstances
While your Will may already be drafted to contemplate some of these events, a quick review can identify whether changes are needed to reflect your new circumstances.
Powers of Attorney
If you were to suffer a stroke and be unable to communicate or be unconscious from a car accident you would need someone to speak to the doctor on your behalf. You may even need someone to manage your financial affairs.
A power of attorney is a legal document authorising somebody you trust, such as a family member or close friend, to act on your behalf with respect to certain matters. This person is known as your attorney.
Different types of powers of attorney cover different circumstances and situations. It is important to understand the various options available so you can make an informed decision. We can explain how the different powers of attorney operate and prepare documents that are tailored to your needs.
How can Clohesy Legal Help?
It is important to seek professional advice when creating a Will and estate plan. An experienced estate planning lawyer can help you navigate the legal requirements and provide guidance on the best approach for your specific circumstances. They can also help you avoid common mistakes that could lead to unintended consequences.
It is also important to consider any tax implications when planning your estate. An accountant can help you understand the tax consequences of your decisions, such as the capital gains tax implications of leaving certain assets to specific beneficiaries. We will spend time with you to determine your final wishes and advise on how we can best make sure those wishes are achieved. We can also work with your financial professional if necessary to structure an effective and holistic estate plan.
If you need assistance, contact [email protected] or call 0417 342 972.