Estate Planning: The essentials

Nobody likes thinking about it, but in the face these uncertain times it’s essential to ensure that you and your family have an estate plan in place to take care of your affairs if one of you were to become ill or pass-away.

An estate plan ensures that your assets are passed on to the people you care about most, and that important decisions are made by those you trust.

To create an estate plan, you’ll need to have the following key documents in order:

1. Last Will and Testament:

A Will is a legal document that sets out how you want your estate (i.e. your assets, including property, cars, shares and cash) to be distributed on your death. A will can be made by anyone 18 and over, who has mental capacity to understand what they are doing. Wills have several formal requirements, the critical being that they are in writing and signed by the will-maker in the presence of two independent witnesses.

A well-drafted will can ensure that the right people benefit from the right assets at the right time (the three ‘Rs’).

Here are some questions you need to consider:

• Do you have a Will?
• Is it up to date?
• Have you re-visited your Will when circumstances have changed (divorce, marriage, new child, new business, increase in assets etc)
  
  

Marriage in NSW generally results in a will being automatically revoked. Divorce/separation on the other hand does not impact on the validity of your Will.

It is recommended to re-visit your Will at least every five years.

2. Enduring Power of Attorney (‘EPOA’):

This document allows you to appoint a person or persons to make decisions about your financial matters if you become incapacitated.

Here are some questions you need to consider:

• Is the person nominated a trusted person who will act for your benefit?
• Do you have a self-managed superannuation fund (‘SMSF’) in place?
  
  

If an SMSF member ceases to be a trustee or director of a trustee by reason of incapacity, the SMSF may no longer be a complying fund. The SIS Act provides for continued compliance in circumstances where the member's legal personal representative holds a valid enduring power of attorney granted by that member and is appointed in their place.

3. Enduring Power of Guardianship (‘EG’):

This names who will make personal, lifestyle and treatment decisions for you if you become incapacitated.

Consider if your current choice is the person you wish to make these decisions?

4. Binding Death Benefit Nomination (‘BDBN’):

A BDBN is a notice given by a member to the trustee of their super fund which imposes a direct duty on the trustee to pay their death benefits in accordance with their wishes specified in the notice.

Consider if your BDBN is current and effective for your superannuation balance?

This needs to be reviewed regularly, ensuring persons named as beneficiaries are acceptable and appropriate given your circumstances.

Cutcher & Neale has extensive experience in estate planning. We can review your estate planning documents and make recommendations for current and foreseeable changes. We can liaise with your lawyer to ensure your estate planning documents reflect your current situation.