Whilst we prepare for many events in our lives, we often neglect to discuss the difficult ‘what if’ topics like passing away suddenly. Unfortunately, for many people, this means they leave their family without information and guidance about what to do when they die. Without adequate preparation, your loved ones may be left exposed to drawn out litigation required to settle your estate. As such, it is importantly to ensure you are legally prepared for the unforeseen to prevent further hardship to your family.
On the 11th of March 2020, the World Health Organisation (WHO) declared the Coronavirus (COVID-19) a pandemic. This is just one example of many unforeseeable global issues that may have significant implications for those who are legally unprepared. It is vital that people of all ages ensure that they are prepared for the legal ramifications of death or illness. Please make sure that you stay up-to-date and comply with all government directions and policies regarding COVID-19.
If you have not already done so, you should ask yourself the following questions to see if you are legally prepared for the unforeseen:
Do I have a Will and is it up to date?
No one wants to be worried about their assets from a hospital bed, as such it is vital to have a Will prepared. A Will is a legal document that sets out how you wish for your assets to be distributed after your death. It forms part of an estate plan and is an important strategic step in preserving your property for your family or other beneficiaries.
Passing away without a Will can place a significant burden on your family. It can impose onerous legal fees on your loved ones, and may result in your assets being distributed by the Supreme Court of Western Australia. Having a Will may ensure that your estate is dealt with promptly and efficiently and that your family is not left to fight drawn out legal battles.
Simply put, a Will properly drafted by our lawyers is the best way to have your assets dealt with in accordance with your wishes after your passing. A Will is designed to reduce future complications and reduce the likelihood of disputes arising from the interpretation of your Will between trustees, beneficiaries, and other parties.
Do I have an Enduring Power of Attorney?
An Enduring Power of Attorney (“EPA”) allows you to appoint someone you trust to make property and financial decisions on your behalf in the event you lose the legal capacity to manage your own affairs. This will include managing your money and real estate. An EPA does not permit an attorney to make personal, medical and lifestyle decisions.
In light of events such as the COVID-19 pandemic, the benefits of an EPA are clear given the chances of hospitalisation or isolation. In such an event, an EPA would allow your appointed attorney to undertake a range of tasks on your behalf when and if appropriate to do so. These may include everyday tasks, such as paying your bills and signing documents that require urgent attention, or more complex tasks such as dealing with your property (i.e. selling property) during your recovery.
Do I have an Enduring Power of Guardianship?
An Enduring Power of Guardianship (“EPG”) allows you to appoint someone to make personal, lifestyle and treatment decisions on your behalf should you ever become incapable of making these decisions yourself. These decisions include, but are not limited to, where you will live and what medical treatment you will receive.
With events such as COVID-19 having potentially life-threatening health impacts, it is vital to ensure that you have a guardian, appointed via a legally enforceable EPG. Your appointed guardian should understand your health care plans, directives and wishes should you become incapable of dealing with your own health care decisions. You must also ensure that if you have already appointed a guardian, they know of their appointment and are willing to act in such a capacity.
Where no attorney is nominated via an EPG you risk having the Public Advocate, which is a government body, appointed to assume responsibility over your health care decisions. This means that should you become mentally, or physically incapacitated without having executed an EPG, your family may not have sole control over your health care decisions.
Did you know that your Superannuation does NOT form part of your estate by default?
Superannuation is not considered an estate asset. A super fund is a type of trust meaning that it is not legally “owned” at the time of death. This means that on death it does not flow to the estate of the deceased automatically. Instead, without a binding death nomination a trustee of the super fund will pay out ‘death benefits’ in accordance with the governing rules of the fund and relevant law. This means that if you arrange to leave all your super to a child or spouse, this might not be honoured upon your passing.
However, an up-to-date Binding Death Nomination can be used to override the trustee’s discretion and ensure that the arrangements you have made during your lifetime are honoured. Simply put, a Binding Death Nomination is a legally binding nomination allowing you to advise the trustee who is to receive your superannuation benefit upon your passing and how to distribute your benefit.
Note, Binding Death Nominations should be reviewed regularly, as they can lapse in binding force after a period (usually 3 years). If you do not have a Binding Death Nomination or have not reviewed it in recent years, we advise that you talk to one of our lawyers regarding your options.
Do I have all my important documents in order?
You should ensure that copies all your important documents are stored together with your Will. Usually, after a person passes away, that person’s family will struggle to locate all relevant documents, passwords, and keys. To assist your family, you should prepare a list detailing your:
- assets and liabilities;
- access codes and passwords;
- the location of keys and other documents i.e. bank account details, superannuation details etc.; and
- details of your financial advisor, lawyer, accountant, insurance company and similar entities.
It is important to share with someone you trust the location of that list.
Do I need to nominate a guardian for my children?
If you are a parent of a child under 18, it is important that you know who will take care of your children if anything were to happen to you. Generally, whilst care of your children would flow to the other parent, it is worthwhile determining who would assume care of your children in the unfortunate event that both you and the other parent have passed on.
Fortunately, s71(3) of the Family Court Act 1997 allows you as a parent to appoint a testamentary legal guardian for your child via a Will or Deed. The appointment of a guardian will only take effect upon the death of the last surviving parent or legal guardian of the child. The appointment ends when the child reaches the age of 18 years. If you are unsure of who will take care of your children if you and the other parent are no longer, it may be time to speak to one of our lawyers.
If you have not yet prepared the above documents, you leave your family open to the potential of costly litigation. Further, there is no guarantee that your arrangements would be honoured upon your passing if you do not have a legally enforceable Will.
Contact CD Lawyers today, and we can assist you and your family in ensuring you are legally prepared for the unforeseen.
Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.