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You must be diligent with the details to ensure your loved ones receive the financial and practical care you would like to provide after your death. Estate planning begins with drawing up the documents that outline these legal directives, and it’s recommended you seek professional advice to ensure these remain legally binding. Here are the steps to start this process:

Create a Will

Anyone over the age of 18, who is considered to be sound of mind, can prepare a will. A will is the core document in estate planning which outlines how you want your assets to be divided up among loved ones, charities and other organisations. But it also stipulates who will be guardian to your children or other dependents that require care after your passing, as well as any specific funeral and burial arrangements you’d like made.

To be validated, a will must be a physical written document signed by yourself and two witnesses who are also present while you add your signature.

There are different government bodies that oversee estate planning in each state and territory of Australia. Their job is to ensure your wishes are carried out after your death by managing contests to wills or handling your estate if you pass away without preparing a will. These state-based groups are usually called the ‘Public Trustee’ and each may have slightly different legal powers and requirements. Find your relevant state body here:

Your Public Trustee can help you prepare a will (this is sometimes a free option for pensioners) or you can enlist legal services. Both these will preparation options can be costly, ranging from a few hundred dollars for basic wills and into the thousands if your estate is more complex. Alternatively, you can prepare a will yourself or use much cheaper will kits offered by numerous businesses and nonprofits.

It’s easy for holes to appear in your will if you don’t have it checked by a legal professional. If you’re taking the DIY will route, be sure to thoroughly research what’s required for a valid will in your state or territory.

Nominate Will Beneficiaries and Executors

Will beneficiaries are the people or groups you choose to inherit your assets. You can list numerous beneficiaries on your will, and detail exactly which items or benefits you’d like them to receive. If you don’t nominate beneficiaries for some assets these will generally be inherited by your next of kin (starting with a spouse, then immediate family), but this could be contested by other parties.

If you have children under 18 or other dependents, you should also outline the guardians you would like to take over their care. This arrangement should be discussed before being included in your will, as a guardian will become legally and financially responsible for the welfare of your dependents when you pass away, and there could be additional financial support or organise as part of your estate. Appointing a guardian in your will can help loved ones avoid going to court over the custody of children.

An executor of a will steer the ship of your estate after your passing. This is a significant and essential role in any estate, so an executor should be a trustworthy individual who can remain independent from any disputes that may arise.

This person will need to apply for a grant of probate from the supreme court of your state or territory. Obtaining this legal document usually comes with a filing fee that’s dependent on the size of your estate, as well as other legal fees payable to your lawyer. For example, in NSW it’s free to file for probate if the estate assets are worth less than $100,000, but can cost up to $5,996 for estates valued at more than $5,000,000.nYou may choose for the Public Trustee of your state or territory to act as the executor of your will, but this will come with management fees.

Will executors are responsible for registering your death, settling any debts you hold using the assets of your estate (ensuring any assets are sold for a fair market price), and then distributing remaining assets to beneficiaries. Executors must also protect your personal belongings, and be prepared to be an intermediary in any disputes over the will.

Draw up a List of Estate Assets

In addition to your will, you should organise a separate document that lists out all of your assets which will be distributed as part of your estate. You should store this safely and ensure your will executor has a copy or knows how to access it.

Common estate assets include:

  • Property or land you own as an individual (which may have a mortgage attached)
  • Valuables (like jewellery, artworks, collectible items and cars) and other belongings
  • Cash and bank deposits
  • Debts and loans
  • Business assets (if you own a business)
  • Shares and stocks
  • Items like intellectual property, royalties, patents and copyrights

It’s important to remember not every asset you hold belongs on this list. In Australia, any funds you hold in superannuation at the time of your death are managed by the trustee of your fund. You’ll need to nominate super beneficiaries separately to your will.

Similarly, most life insurance companies will ask you to nominate beneficiaries who will receive the payments outlined in your policy upon your death. If you hold a policy without nominated beneficiaries, the benefit may pass to those named in your will.

Things get more complicated with jointly owned assets. For example, if you and your partner own the property you live in together, this asset will be passed onto them as the surviving tenant. Similarly, if you own a business jointly, shared assets in this business can’t be distributed via your estate. However, any shares you hold in the company can be passed on to your listed beneficiaries.

Nominate Power of Attorney

You may choose to nominate a power of attorney while you’re preparing your will. This is a separate legal document which allows you to appoint a person or numerous people to manage financial and legal decisions on your behalf while you’re alive.

If you choose an ‘enduring power of attorney’, they can continue to make decisions for you if you’re unable to do so yourself (for example, if you fall into a coma). Otherwise, a ‘general power of attorney’ can only act on your behalf while you’re able to make your own decisions.

Nominating a power of attorney isn’t an essential component of your will. But since an attorney is legally required to act in your best interest, appointing a trusted person to this role can help ensure your affairs are managed as you’d like them to be if you become incapacitated before your death.

Draw up a Medical or Health Care Directive

A medical care directive is often known as an advanced care directive or a living will. It is a formalised document that outlines your preferences on medical, health and lifestyle choices. This can help your loved ones make decisions about your care if you become injured or disabled and can’t communicate with them or act on your own behalf.

In some cases, you may want to specifically appoint a spouse, trusted friend or relative to make these decisions about your wellbeing based on your medical directive. This is known as an ‘enduring guardianship’ and must be agreed to by both parties and outlined in a signed and witnessed document. An enduring guardian’s decision-making power doesn’t relate to your finances or other details in your will.

Medical care directives differ between the states and territories – find details and forms for your state via Advanced Care Planning Australia.

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