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By Ken Raiss

5 critical estate planning documents

Estate planning is different for everyone and especially in today’s modern environment of potentially blended families.

So, with more people remarrying, it's critical to prepare for the distribution of your wealth upon your passing.

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While you are alive, the estate planning process allows you to manage and preserve your wealth for those you will one day leave behind.

At death, your estate plan allows you to conserve and control its distribution according to your desires, goals, and objectives after you have gone.

It's vitally important that everyone creates an estate plan, so here are five important documents that you should consider regardless of your age, health, or wealth.

1. Prepare a will

A will distribute property owned in your own name (estate assets) as you wish after your death.

But, without a will, disbursements are made according to state law, which might not align with your priorities.

A will also name an executor to manage and settle your estate as well as a legal guardian for any dependents.

Since a will is a legal document, it's crucial that it be well written and articulated as well as witnessed so that it is properly executed under your state’s legislation.

There are various types of wills, including Testamentary Trusts, which can better safeguard assets from family splits and improve the taxation on income or capital gains when young children are involved.


2. Non-estate distributions

Assets not owned in your own name are not distributable directly from a will – these are typically superannuation and assets held in a trust.

Superannuation assets need either a Binding Death Nomination or Superannuation Will written to conform with the requirements of the superannuation deed.

And as you do not own the assets in a trust control needs to be passed on, which will be via a Memorandum of Wishes nominating a new appointor.

The shares you own in the trustee company of the trust (which are really worthless as the trust itself owns the assets) can be passed on through your will, and the new shareholders will vote in new directors – usually your beneficiaries.

3. Enduring Power of Attorney (EPOA)

An Enduring Power of Attorney authorises someone to act on your behalf should you become physically or mentally incompetent to handle financial matters.

The person you designate as your EPOA can pay bills, file taxes, direct investments, etc. on your behalf.

The document can also give authority to a specific decision and is governed by the relevant State and Territory legislation.

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4. Medical directives

Medical directives allow you to specify the medical treatments you do and do not want in the event you can’t express your wishes and it can also appoint someone to make these decisions for you.

But without this document, medical care providers must prolong your life using artificial means, if necessary.

Medical directives are also referred to as “living wills”.

In addition, medical directives can be combined with healthcare Powers of Attorney, which name the individual or individuals that you would like to make your healthcare decisions if you are incapacitated, including the standard of care you desire and end-of-life decisions.

Medical directives are governed by the relevant State and Territory legislation.

5. Personal details

This is a non-legal document that may accompany your will to express personal thoughts and directions.

Unlike a will, this remains private and its directions are not binding but could be very useful to implement your wishes.

Typically, we see banking details, passwords, log-in details, insurance policies, etc. only known by the deceased, which ensures that surviving partners and/or executors have access to this vital information easily.

No one likes to think about their own death, but documents such as those identified above can make the job of the executor more efficient and therefore less costly to your estate.

The desires of the deceased can also be completed more quickly and with less disruption in what is already a time of grieving and stress. 

On the topic of the executor, it is advisable to nominate at least a second backup, as the nominated person, for whatever reason, may not want to take on the responsibility at the time.

It is also advisable to discuss with your estate lawyer the types of issues that can arise from a disgruntled person who believes they have not been treated fairly in your will.

You can then implement a strategy to limit any disruptive behaviour.

Death is a fact of life, but far too many people don't prepare for it financially.

We all spend lifetime building assets, so it makes sense that after we've gone that our wishes are known and our wealth is passed on to the people who meant the most to us when we were alive.


This article is general information only and is intended as educational material. Metropole Wealth Advisory nor its associated or related entities, directors, officers or employees intend this material to be advice either actual or implied. You should not act on any of the above without first seeking specific advice taking into account your circumstances and objectives. 

ALSO READ: Protect your existing assets without triggering tax and stamp duty

About Ken Raiss Ken is director of Metropole Wealth Advisory and gives strategic expert advice to property investors, professionals and business owners. He is in a unique position to blend his skills of accounting, wealth advisory, property investing, financial planning and small business. View his articles
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