
Life is unpredictable. So too is death. Nobody wants to think about their death, but ensuring that you have a valid will and have taken steps to control how your estate is dealt with and distributed after you pass away, eliminates the need for your loved ones to deal with your estate if you die intestate, that is, without a will. This can be a stressful process for them at a time when they are grieving, but it can be avoided.
At Paula Sutherland & Associates, we encourage everyone, no matter how big or small their estate may be, to have a will in place. There are many benefits in ensuring that you have a valid will, including:
- allowing your family the opportunity to grieve after you pass away without having to worry about the absence of a will that details how you want your estate dealt with;
- having control over where your assets are distributed after you pass away;
- benefitting the people of your choice, who may not have otherwise benefitted under an intestacy; and
- minimising the potential for disputes between family members regarding your assets and how they should be distributed.
It is equally important to regularly update your will. Circumstances change – children are born, beneficiaries predecease you, your asset pool changes by either the growth or disposal of assets, and so on. You should update your will when there is a significant event in your life, such as marriage or divorce, or otherwise at least every two to three years to ensure that your wishes remain current and valid.
At Paula Sutherland & Associates, our will dispute lawyers and solicitors offer comprehensive, accessible and affordable assistance to clients in relation to their estate planning needs. We can also assist with reseals of probate if required. For an appointment or to discuss drafting or updating your will, contact us.
POWERS OF ATTORNEY
Just as important as making a will, your estate planning should include a power of attorney. Mental incapacity can also be an unpredictable eventuality resulting from injury or illness, but ensuring you have an Enduring Power of Attorney in place will protect your estate in circumstances where you are no longer in control. Alternatively, in other cases, you may simply benefit from a General Power of Attorney by having the ability to delegate to other person/s who can affect transactions on your behalf whilst you still retain the mental capacity yourself.
A Power of Attorney is a legal document that appoints a person (the attorney) to make decisions on your behalf about matters that relate to your financial and legal affairs, such as selling or purchasing property and accessing funds in your bank accounts. It does not permit a person to make decisions about your medical or personal affairs – this is achieved via the appointment of an enduring guardian.
To be valid, a Power of Attorney must be:
- made by a person who has the necessary capacity to give instructions to appoint an attorney;
- made by a person over the age of 18 years; and
- registered pursuant to the Tasmanian Powers of Attorney Act 2000.
There are different types of Powers of Attorney, being:
A Particular Power of Attorney, which limits what your attorney can do with the particular powers vested in them. For example, you could give your attorney specific powers, such as signing leases and contracts and effecting land transfers, but no other access to your general financial affairs. This type of power of attorney can also be enduring, such that it continues after loss of mental capacity on the same limited basis it operated before the loss of capacity.
- A General Power of Attorney effectively permits your attorney to do anything that you can do in relation to your financial affairs. A general power of attorney can be enduring, meaning it will not be revoked in the event that you lose mental capacity.
- An Enduring Power of Attorney, which allows the appointed attorney to act during the enduring phase, that is when you lose mental capacity and/or the ability to manage your own affairs. During this phase you are unable to oversee the attorney’s use of the power, which is why it is critical that you appoint a person or persons that you trust to take on this role.
If you do not have a Power of Attorney, you cannot appoint one after you lose capacity, nor can your family members legally act in the capacity of an attorney and do that which an attorney is legally empowered to do. Should the situation eventuate that you become incapacitated without an Enduring Power of Attorney, an application would need to be made through the Guardianship and Administration Board to appoint an Administrator, which may be granted to an individual, the Public Trustee or a private trustee company for example. In the meantime, your financial assets are not consistently protected as they could be under an Enduring power of Attorney.
Again, it is critical to plan for these unknown contingencies and ensure that your estate is protected in accordance with your wishes should you lose mental capacity.
Paula Sutherland & Associates are happy to assist you with advising you in relation to the appointment of a power of attorney and attend to drafting and registration for you.
ESTATE ADMINISTRATION
This process occurs after you pass away and involves the management and distribution of your estate’s assets and liabilities in accordance with the terms of your will. If you do not have a will, then this will occur in accordance with the applicable intestacy legislation.
If you have a valid will, then the executor or executors of your will be responsible for the management and distribution of your estate. The process of managing and collecting assets and liabilities and collateral administrative requirements (such as the closure of bank accounts and disconnection of utilities) can take time, sometimes as long as twelve months for a simple estate. This does not include ongoing responsibilities associated with the administration of any trusts, explained in further detail below.
The duties of the executors can be complex and confusing. This is compounded where the executors are a close family member or friend, who are likely to be emotional following your death, or may even be caught up in potential family disputes or disharmony.
It is important that executors seek legal advice if they are unsure of their legal responsibilities. Paula Sutherland & Associates offers expert and professional assistance to executors, ensuring that they comply with the duties imposed upon them by law. We can also seek professional assistance where required from appropriate experts, such as taxation, financial planning and real estate specialists.
Where your will creates a trust in favour of persons or institutions, a trustee or trustees appointed by your will (typically the executors) will administer the trust in accordance with your wishes. The tasks of a trustee may include administering a trust on behalf of:
- minor children (for their maintenance or education for example) until they reach a nominated age
- A charity to receive the income for charitable purposes
- a family member to benefit from a life tenancy where the beneficiary for life can receive income, and sometimes capital, of a share in the estate for their life.
We can assist trustees with this process by ensuring that they are properly advised in relation to their obligations and how they should administer the trust to conform with the trust objectives and relevant legislation.
Paula Sutherland & Associates offer comprehensive, understandable and transparent advice. An incredibly important part of estate administration is to keep all parties updated with developments during the administration process and ensure they understand both their obligations and rights.