An effective estate plan requires our Balmain Wills and Probate Lawyers to consider our current financial, personal and family circumstances and prepare for the inevitable and the unexpected. In addition to having a Will, there are measures you can take to ensure your affairs are appropriately managed if you become unwell or incapacitated.
A valid Will appoints one or more trusted family members or friends as executors/ trustees to manage and administer your estate according to your wishes.
Your Will determines who will receive your property when you die (your beneficiaries) and in what proportion, and may also appoint guardians for minor children and provide directions for funeral arrangements.
A testamentary trust is a more complex type of Will that creates one or more trusts in favour of your beneficiaries. These trusts come into effect after a testator dies and may provide the following benefits:
- protecting at-risk beneficiaries due to their incapacity, disability or dependency;
- safeguarding assets from third-party creditors and estranged partners;
- distributing assets in the most tax effective manner;
- assisting in business succession planning and dealing with business and company interests.
Your Will should be prepared by an experienced lawyer who will take account of your circumstances and family arrangements. Your Will should minimise, where relevant, potential family provision claims and be reviewed regularly and whenever your financial or personal circumstances change.
Power of Attorney / Enduring Power of Attorney
A Power of Attorney is a legal document that appoints and authorises somebody to look after your legal and financial affairs. A Power of Attorney may operate for an extended ongoing period or deal with limited matters such as managing a one-off transaction while you are travelling overseas.
More commonly, a Power of Attorney will appoint a family member or trusted friend to look after your financial and legal affairs on a more frequent basis if you are unable to do so yourself due to age, ill health or physical incapacity. If a person wishes the authority to continue indefinitely and in circumstances where the person authorising the appointment becomes mentally incapacitated, an Enduring Power of Attorney must be in place. While a Power of Attorney ceases to operate after a person loses mental capacity, an Enduring Power of Attorney will not.
Appointment of Enduring Guardianship
An enduring guardian can make lifestyle, health and medical decisions on your behalf if you lack capacity to make those decisions yourself. A guardian acts as a substitute decision-maker and can consent to your future medical and dental treatment and accommodation needs.
More than one guardian may be appointed, and it is common for spouses or partners to appoint each other and / or their adult children. A guardian may need to make confronting decisions in challenging and emotional circumstances and those you appoint should understand your values, morals and wishes.
The loss of a loved one and associated vulnerability can make the legal requirements of dealing with an estate very stressful. Obtaining legal assistance to obtain probate and administer an estate is important during these difficult times.
Duties of executors and administrators
An executor is the person appointed under a Will to deal with a deceased person’s estate. If a person dies intestate (without a Will) or the person appointed in a Will is unable to act as executor, an administrator may be appointed by the Court through Letters of Administration.
As the legal personal representative of a deceased person, executors and administrators have specific duties and legal obligations. They must administer the estate according to the Will (or Letters of Administration) which requires identifying and protecting assets, paying debts, transferring property and distributing other assets or funds. They will usually need to deal with accountants, banks, real estate agents and / or brokers. When carrying out these duties under legal guidance, the lawyer will also provide advice to ensure executors and administrators are protected from liability in the event of a claim against the estate.
What is Probate?
Probate is a grant made by the Supreme Court that ‘proves’ the Will of a deceased person and authorises the executor to deal with assets and administer the estate according to the Will.
A grant of probate may not be necessary for small estates however executors are advised to obtain legal advice to ensure they are protected from potential claims.
Probate is required to transfer real estate that is not jointly held between the deceased and a beneficiary, and most financial institutions will require a grant to release funds over a specified amount.
An application for probate should be made within six months of the deceased’s death. A notice is first published on-line with the Supreme Court Registry to warn interested parties (creditors, potential family provision claimants) of the application and provide an opportunity for the relevant claim or objection to be made.
The application and supporting documents are filed with the Court. If no requisitions are raised, probate is granted which vests the estate assets in the executor who may then deal with them according to the Will.
An application for Letters of Administration is made by an interested party if a person dies intestate, or the executors named in a Will are no longer alive or unable to fulfil the role.
A grant of Letters of Administration appoints the applicant as administrator of the estate, allowing him or her to deal with the estate assets and liabilities in the same manner as an executor.