Demystifying estate planning
We know it may not be an easy conversation to have.
When a loved one passes away, it can be a very difficult and emotional time. Aside from the grief your family will experience, the reality is that your personal and financial affairs will need to be finalised.
Estate planning is important for all of us, irrespective of our age or wealth. Our personal circumstances are unique and in some cases may call for creative, tailored and innovative planning. We know this can be confusing, but getting expert advice and planning ahead will help provide peace of mind.
Below we answer some common questions and misconceptions surrounding estate planning.
Do I need a Will?
A Will provides certainty about who receives your estate. Without one, you are passing up the opportunity to plan for your family’s future and ensure your wishes are respected.
Dying without a valid Will can cause a lot of financial and emotional hardship for the loved ones you leave behind.
Do I need an Enduring Power of Attorney or Advance Health Care Directive?
It is good planning to have an Enduring Power of Attorney and an Advance Health Care Directive in place. These documents authorise your chosen representatives to make personal, financial, and medical or health care decisions on your behalf. This can be crucial if you lose capacity and can no longer make decisions for yourself.
What happens if I don’t have a valid Will?
If you die without a valid Will your estate, which includes your assets and liabilities, will be distributed according to the rules of intestacy. In Queensland, this means that your estate will be given to your closest relatives in the following order:
Who can challenge my Will?
Naturally, you want to take all possible steps to ensure there are no claims made against your estate. However, it is an unfortunate reality that sometimes a death in a family can provoke family disagreements and bitter disputes between surviving relatives.
Not everyone can challenge your Will. In Queensland, a court may consider a claim made by a spouse, a child including a stepchild or adopted child, or a dependent, which may include a former spouse in certain circumstances.
How can I avoid a challenge to my Will?
You might reasonably wonder why you would bother making a Will when it can be challenged, and your wishes potentially undone.
As a starting point, a court will uphold the wishes of the deceased person unless there is good reason to interfere. In assessing any challenge to your Will, the function of the court is to step into the shoes of the deceased person and determine whether adequate provision has been made for the Applicant’s proper maintenance, education or advancement in life.
Even though the outcome of a family provision application is ultimately a determination for the court, an experienced estate planning lawyer can help you reduce the likelihood of a claim being successful.
Do I have to pay inheritance tax?
Inheritance Tax, commonly known as ‘death duties’, was abolished in Australia in 1979. There are, however, still a number of other unavoidable taxes and expenses which may impact your estate
With careful estate planning you may be able to minimise the tax that your estate, and ultimately your beneficiaries, may be liable to pay.
So what should I do?
For peace of mind, take some time to look at your current arrangements. Have your circumstances changed? Have your wishes changed?
Talk to your loved ones so that they know and understand your intentions.
If you have any questions or concerns, seek the advice of an estate planning lawyer – they can help you make sense of this often complicated area of law.
By implementing an effective plan now you can rest easier knowing that your estate planning documents reflect your wishes and intentions.
[This article was published in the May 2019 edition of Australian Over 50’s Living & Lifestyle Guide]