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What Is Estate Planning?
Estate planning is the process of organising and managing an individual’s assets to ensure they are distributed according to their wishes after their death. It often also includes the management of an individual’s financial and health affairs if they become incapacitated.
An estate plan can be made up of a variety of legal instruments and structures, ranging from a simple will to powers of attorney, trusts, advanced care directives and more.
The process is often facilitated by a legal professional who is experienced inĀ estate lawĀ to ensure that all documents are legally valid and your estate plan is effective.
If you are looking to establish an estate plan, our lawyers are here to guide you on the best options for your specific situation.
Parts of An Estate Plan
An estate plan can be made up of one or more of the following aspects, depending on your specific requirements. Each of these legal tools comes with certain benefits for varying circumstances, and may or may not be necessary for your estate plan depending on your situation.
Wills
AĀ willĀ is the primary document in any estate plan. It outlines how you want your assets to be distributed after your death and who is in charge of handling the distribution. It may also specify guardianship arrangements for any minor children, as well as other wishes you may have.
A Power of Attorney is a legal document that gives another person the authority to make decisions on your behalf if you become incapacitated or are not present to do so yourself. A Power of Attorney can cover financial matters, personal or health decisions, depending on the type of Power of Attorney given.
Appointment of a Medical Treatment Decision Maker
A Medical Treatment Decision Maker (āMTDMā)appointment is a legal document (previously known as a Medical Power of Attorney) that allows you to appoint one or more Medical Treatment Decision Makers who can make medical decisions for you when it comes to decisions about your healthcare and medical treatments in the event that you become unable to make or communicate your decisions about your own medical treatment.
This might occur if you are seriously ill, injured or mentally incapacitated. You can also prepare an Advanced Health Care Directive that provides specific guidance to your doctors, family and carers about your medical treatment preferences, including the types of treatment you would like to receive, or refuse, under certain circumstances.
AĀ Testamentary TrustĀ is a legal arrangement that is created by a provision in a person’s will that commences after they pass away. It provides a way to protect assets and manage the distribution of those assets to beneficiaries over time, rather than in a single, immediate distribution.
This type of trust can be particularly useful when beneficiaries are minors, financially inexperienced, or vulnerable in some way. It can also provide certain tax advantages, as income can be distributed in a tax-effective manner.
The trust is managed by a trustee who is responsible for administering the trust’s assets in accordance with the deceased’s wishes as expressed in the will.
Superannuation Binding Nominations
A Superannuation Binding Nomination is a legal instrument used to specify who will receive your superannuation benefits in the event of your death.
Unlike other assets, your superannuation does not automatically become part of your estate and therefore is not necessarily governed by your will.
Instead, the trustee of your superannuation fund decides who receives your benefits, unless you have a valid bindingĀ and non-lapsingĀ nomination in place.
This nomination directs the trustee to distribute your superannuation benefits to specific dependents (like your spouse or children) or to your legal personal representative (who is responsible for administering your estate).
Life Insurance
Life insurance is a critical component of estate planning. A life insurance policy is essentially a contract with an insurance company that promises to provide a lump-sum payment (known as a death benefit) to the beneficiaries upon the insured’s death, in exchange for regular payments.
This death benefit can help provide financial stability and support to the beneficiaries, helping cover costs such as funeral expenses, debts, taxes, and ongoing living expenses.
The proceeds from a life insurance policy are usually not subject to theĀ probateĀ process, but they may still be subject to estate taxes. Therefore, it’s crucial to name beneficiaries on the policy correctly and update them as needed.
In some cases, setting up a life insurance trust can help to avoid potential estate tax implications.
Guardianship
If you have minor children or dependents, Guardianship is a vital aspect of estate planning.
In the unfortunate event of a parent’s death or incapacity, a guardian who is nominated in the parentās will, assumes the responsibility for the care and well-being of the minor children or dependents.
This includes day-to-day care, health decisions, and often decisions regarding the child’s upbringing and education.
By nominating a guardian in your estate plan, you can ensure that your children are cared for by someone they trust and who shares your and their values.
If no guardian is named in an estate plan, the court will appoint one, which may not align with the parent’s or childās wishes.
Charitable Giving
Charitable giving can play a significant role in estate planning, allowing individuals to leave a legacy that aligns with their personal values and passions.
A person can choose to bequeath a portion of their estate to a charity or charities of their choice in their will. This kind of planned giving can have meaningful impact on the chosen charities, providing them with vital funds to continue their work.
In addition, charitable donations made through a person’s estate plan may have potential tax benefits for the overall estate, as they can reduce the taxable value of the estate.
It’s essential to clearly specify the intended charities and the nature of the gifts in the estate plan to ensure that the individual’s wishes are carried out accurately.
How Our Solicitors Can Help You With Your Estate Plan
If the time has come for you to set about an estate plan, our lawyers are here to help you put together the best possible plan for your particular circumstances.
Experience & Understanding of Local Laws
Our team has extensive experience putting together estate plans for countless individuals and families in Victoria, helping them make personalised plans that are legally valid and stand up to being challenged.
Our understanding of local laws allows us to know where the common weak points are when it comes to estate plans, and mitigate any potential issues before they arise.
Personalized, Simplified Approach
We understand that estate planning can be a complex topic, and we are here to listen and understand your specific needs, explain the law in plain English, and put together a plan that works best for you.
Everyone’s situation is unique, so a one-size-fits-all approach won’t work. We take the time to understand your specific circumstances, goals, and concerns and design an estate plan that suits your particular needs.
Long Term vision
Our goal is to create a long term relationship and be there for you as required, through updates in life circumstances such as births, deaths, marriages, divorces and changes in wealth, ensuring your estate plan is up to date and reflective of your current situation.
We are also here to anticipate issues, communicate regularly, and provide relevant advice as laws and personal circumstances change, so that your estate plan remains valid at all times.
Transparent Fees
Estate planning can sometimes be costly. Because we wish to maintain a relationship with all of our clients, we are always upfront with our fees so you know exactly what itās going to cost and don’t get hit with any hidden charges.
Here to Defend Your Interests
And if any disputes arise, you can be confident knowing you have experts on your side who will fight for your interests and ensure your wishes are upheld.
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