By Chris Parker | Partner at Charltons Lawyers
When it comes to estate planning there are three key documents everyone should be aware of, irrespective of their age and wealth.
These are your Will, Enduring Power of Attorney and Advance Health Directive and it is important to understand what these documents are, how they operate and why it is necessary to have them.
Your Will can be prepared by you (or someone else with your help) and lets everyone know who is to inherit your estate when you die. Your Will is critical to the future financial health and wellbeing of your family after you die.
By having a Will, you are ensuring all your possessions are distributed according to what you want. If you die without a Will, something referred to as “intestate”, your possessions will be distributed according to government legislation and may or may not reflect what you would have wanted. This can also create extra stress, costs and delays in the administration of your estate.
It is also important that your Will is drafted correctly as we regularly see Will Kits or home-made Wills that create ambiguity. This sometimes ends up in a situation where your wishes are not truly met. For example, the words “I give my estate equally to my sons and daughters” – if you have four sons and two daughters, do the four sons get half to share and the two daughters get the other half?
Once you have a Will it is critically important to keep it up-to-date as many significant life events, such as marriage, new de facto relationships, separation, divorce, birth of children or death of a beneficiary or executor will have an impact and potentially affect the validity of your will. It is also important to be aware that stepchildren are included as children. As such they are able to bring a claim against your estate.
Your Will should also deal with the guardianship of any children that survive you and specify who you would want them to live with if they were orphans.
Enduring Power of Attorney (EPA)
An EPA allows for someone else to make personal and/or financial decisions on your behalf when you are unable to. This might be if you are too ill to make choices about your medical treatment or you suffer a disability that prevents you from communicating your wishes to others.
The advantage of an EPA is that you get to choose who you want to make decisions for you. It is one of the most powerful documents you will sign, so it is important that you have complete trust in any persons you appoint.
You can appoint Attorneys to make decisions about personal matters such as where you live and who you have contact with, health care including choosing medical and dental treatments and financial matters such as collecting your income, paying your bills and taxes or even selling your home.
In the event you become incapacitated and do not have an Enduring Power of Attorney, your relatives will need to apply to a Tribunal or Court in order to have a Guardian and Administrator appointed to look after these decisions. This person/s will be appointed by a Tribunal and will not necessarily be the person that you would have chosen.
Advance Health Directive
An Advance Health Directive is a form or set of instructions for your future health care. It is only used if you become unable to make decisions due to illness or incapacity.
There may be a time where you are seriously ill, unconscious or unable to communicate; and critical decisions about your health care are still required to be made. An Advance Health Directive allows your wishes to be implemented. It gives your treating Health Professionals direction about the treatment you do or do not want.
An Advance Health Directive can be used to express wishes in a general way and you include relevant information about yourself that Health Professionals should know such as special health conditions, allergies to medication and any religious, spiritual or cultural beliefs that could affect your care. Importantly, you can give specific instructions about certain medical treatments. For instance, you might feel strongly about whether or not you want to receive life-sustaining measures to prolong your life. This can overlap with your Enduring Power of Attorney.
Before completing an Advance Health Directive, it is important to reflect on the decisions you have to make. You are putting in place a plan that will determine your future health care so considerations about what is important to you regarding your health care and things such as communication with loved ones or pain relief and organ donation should be considered and addressed. You should discuss these matters with your family or close friends.
An important distinction from an EPA is a section of the form which must be completed by a Doctor. The role of the Doctor is to explain your options and to explain to you most of the medical terminology contained in an Advance Health Directive.
Importantly, the Advance Health Directive does not appoint anyone to do anything for you but does set out a road map for your future health care if you lose the mental ability to do so.
In our view, an Enduring Power of Attorney is essential, particularly where you have family or close friends who are willing and able to act as your Attorneys. An Advance Health Directive is not so important, unless you do not have any family or friends to make personal and health care decisions for you or you have particular medical courses of action you would prefer.
The important thing to remember is to make yourself aware of each of these documents and what they do and then make an informed decision about whether you want to have an Enduring Power of Attorney and/or an Advance Health Directive.
The final, important issue is that our circumstances are all different and you should seek legal advice on what is best for you.
Partners Kelly Dwyer, Chris Parker and Edwina Rowan lead the team at Charltons Lawyers, Bundaberg’s longest-serving law firm. To discuss any of the documents mentioned, contact Charlton’s Lawyers on 4152 2311.