What is Estate Planning?
Estate planning is the process of arranging the distribution of your assets after you pass away. It can also involve arranging how your financial and medical decisions should be handled if you lose capacity before death. In Australia, it is common practice to prepare estate planning documents.
Estate Planning is made up of several different documents, including:
- A Will
- An Enduring Power of Attorney
- An Advance Care Directive
Your Will
A Will is a legal document that sets out:
- Who will manage and ensure the distribution of your estate;
- Who will inherit your estate;
- How much each beneficiary will receive;
- When they will receive their entitlement; and
- Instructions regarding your body and funeral.
Your Will also serves as a form of asset protection. It can help prevent your estate from being distributed in an unintended way. For example:
- If your child separates from their partner, you may wish to ensure the child’s inheritance is not shared with their former partner.
- If your child owns a business and is at risk of legal action, you may wish to protect the child’s inheritance from potential creditors.
Enduring Power of Attorney
An Enduring Power of Attorney is a legal document that allows you to appoint one or more trusted individuals to act on your behalf if you lose the capacity to make financial decisions.
You can decide who you trust to be your attorneys. All appointed attorneys must sign the Enduring Power of Attorney for it to be valid, as well as you.
Advance Care Directive
In South Australia, an Advance Care Directive is a legal document that sets out your preferences regarding:
- Future health care;
- Medical treatment refusals;
- Personal matters;
- Lifestyle choices; and
- Your values and wishes.
You can appoint one or more Substitute Decision Makers to act on your behalf if you are unable to make health and lifestyle decisions yourself. However, an Advance Care Directive cannot be used to make financial decisions.
Importantly, your Substitute Decision Makers must sign the Advance Care Directive before you do.
Why Is Estate Planning Important?
It is important to consider your estate planning well before the end of your life. If you have a legally binding Will in place, your trustees and executors can administer and distribute your estate in accordance with your wishes.
If you die without a Will, your relatives or other potential beneficiaries are more likely to become involved in disputes about who should benefit from your estate. This risk increases if you have a blended family or are estranged from one or more family members.
Without a valid Will, your estate may also be distributed to someone you may not have chosen to benefit. In such cases, the rules of intestacy will apply, which may not be consistent with your intentions.
When Should You Prepare Your Estate Plan?
There are a range of circumstances in which you should consider preparing or updating your estate planning documents, including:
- If you are concerned about your current or future health;
- If you marry;
- If you are separated from your spouse or domestic partner;
- If you are divorced;
- If you are estranged from any family members;
- If you are part of a blended family;
- If you wish to ensure your children’s interests are protected;
- If you are concerned about the risk of family disputes after your death;
- If you are planning to travel;
- If you are participating in high-risk activities; and
- If you want to protect your assets and maintain control over who inherits.
What Happens If You Don’t Have an Estate Plan?
In South Australia, if you die without a Will, your estate will be distributed according to the rules of intestacy under the Succession Act 2023. This means you lose control over how your assets are distributed. Your estate may be given to someone you would not have chosen to receive a benefit.
The administration of your estate may also become more time-consuming and costly, particularly if disputes arise. Your administrator may incur greater legal expenses and face difficulties resolving conflicts among relatives or potential beneficiaries.
If you have minor children and no valid Will, guardianship arrangements may also be determined by others, and may not align with your wishes.
In addition, if you do not have an Advance Care Directive or Enduring Power of Attorney, it may become difficult for healthcare professionals and/or financial institutions to act on your behalf if you lose capacity. This can result in delays and complications in managing your medical treatment or finances.
Updating Your Estate Plan
You should consider a review or update of your estate plan when your circumstances change, such as:
- Changes in family members (e.g. births, deaths);
- Divorce or separation;
- Marriage or entering a de facto relationship;
- Concerns about your health;
- Increase in wealth or new liabilities;
- Increased risk of disputes; or
- Changes in your long-term plans or intentions.
Keeping your estate plan up to date ensures that your wishes remain clear and legally effective.
Read more about Updating Your Estate Plan here.
Contact Us
For more information, contact Bambrick Legal today. We offer a free, no-obligation 30-min consultation for all enquiries.
- Fill in our enquiry form here
- Call us on 08 8362 5269
- Like us on Facebook
- Follow us on LinkedIn
Read more about our Estate Planning services here.
Related Blog – What if You Want to Leave Someone Out of Your Will?
