Ensuring your estate planning is up to date is critical for peace of mind, both for you and your loved ones.
Whilst it is important to seek advice, as your circumstances generally impact your individual needs, your estate planning checklist can be broken down to 3 important documents: your Will, Enduring Power of Attorney and Binding Death Benefit Nomination.
Your Will
A Will allows you to take a proactive approach with how your estate will be managed if something happens to you. In a Will, you may appoint an executor (the manager of your estate), a substitute executor, nominate who your beneficiaries will be and control the guardianship of any children.
Without a Will, a person is said to have passed ‘intestate’. Passing intestate means your estate will be governed by legislation with strict rules around the distribution of your estate depending on your family structure. The legislation offers little flexibility and will not take into consideration blended families, estrangement and alternative guardians for your children.
By having a Will, you ensure your estate is managed having regard to your loved ones and your personal circumstances.
Enduring Power of Attorney
An Enduring Power of Attorney allows you to nominate a person (an attorney) to make financial and/or personal (including health) decisions for you if you are unable to make decisions for yourself (i.e. for example, if you are incapacitated).
For example, in the absence of having an Enduring Power of Attorney, it is possible no one will have legal authority to access your bank accounts to cover certain costs such as medical bills, school fees or tax bills.
Furthermore, if there is conflict among your loved ones in relation to your medical and health care, this presents further challenges with medical practitioners.
Where there is no Enduring Power of Attorney, or there is a dispute, it may be necessary for your attorneys and/or loved ones, to make an application to the Queensland Civil and Administrative Tribunal (QCAT) to appoint or review an attorney. A QCAT application can be expensive and involves considerable time and administrative work.
Without an Enduring Power of Attorney, your loved ones may not hold the necessary authority to make decisions for you which ultimately places your own interests, financial and health, at risk.
Binding Death Benefit Nomination
After death, your membership balance and any death cover in your superannuation will be paid out together. Together the sum is referred to as a ‘death benefit’.
Generally speaking, your death benefit is separate to your estate. Therefore, if something happens to you, your superannuation will not automatically be dealt with in accordance with your Will and estate.
By having a Binding Death Benefit Nomination, the trustee of your superannuation fund will be bound to pay your death benefit to your nominated beneficiary. However, it is important to pay attention to the category of beneficiaries you are eligible to nominate, as it is limited to a dependent or the legal personal representative of your estate. If an ineligible beneficiary is nominated, your Binding Death Benefit Nomination will be deemed invalid.
When you are completing a Binding Death Benefit Nomination, I recommend obtaining the form particular to your superannuation (which is generally downloadable via your superannuation fund website) and following the instructions in the form.
In the absence of having a Binding Death Benefit Nomination, the decision as to who your death benefit will be paid to, will be made in the complete discretion of the trustee of your superannuation fund. Unfortunately, in my experience, leaving the decision to the trustee of your superannuation fund may lead to an unjust outcome.
Giving you and your loved one’s peace of mind
By having your Will, Enduring Power of Attorney and Binding Death Benefit Nomination completed and in order, you will have peace of mind that your affairs are in order, and your loved ones will be looked after in accordance with your wishes.
As the circumstances of every individual and family are different, it is important to seek advice on your affairs and property to ensure you have a comprehensive estate plan.
Contact our team to discuss your estate planning needs.
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