The Importance of a Valid Will and Enduring Power of Attorney
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I don’t have a Will. Do I really need one?
All adults – particularly those who have dependents – should have a Will, regardless of your financial situation. Interestingly, around 52% of Australians do not have one. If you die without having a legal Will, you will have died what is called “intestate” and while your loved ones may still eventually benefit from your estate, by having a valid Will you avoid the possibility that your estate will be distributed in a way that does not represent your wishes.
Most people would agree that when they die, they would want certain people in their lives to be given certain parts of their estate. In Queensland, when someone dies intestate, the distribution of their estate – including property, shares, funds held in bank accounts, vehicles and personal items – will be subject to Queensland’s intestacy laws.
Depending on your circumstances (this usually refers to your marital status and if you have children) the way your estate will be distributed will differ.
What happens to my estate if I die intestate?
If you are single with no children and no Will, then your parents inherit your entire estate. While this may seem like a logical choice, there may be other people in your life whom you’d prefer are the recipients of your property.
If you are single with no children and no Will and your parents are deceased, your siblings will receive your estate in equal parts. The children of any deceased siblings will receive their parent’s portion.
Any person who dies intestate who is single and has no children, siblings or living parents will have their estate distributed amongst their mother and father’s relatives.
If you are single with children but no Will, your children will receive your estate in equal parts. Any deceased children’s children will receive what would have been their parent’s portion.
If you are married with no children and no Will, your spouse will inherit the entire estate.
Married people with children but no valid Will would have their estate divided so that the spouse receives the first $150,000 of the estate as well as all household items (known as “household chattels”), with the children receiving the remainder equally. The same rules apply for couples in de facto relationships.
As you can see, it is extremely important to have a Will so that there is a legally valid, written document expressly stating exactly how you wish for your estate to be distributed in case the above arrangements do not suit your wishes. It will also help your loved ones to avoid the lengthy administration process that results from a person dying intestate.
Drafting a Will is not a task that a layperson should try to take on themselves. It is highly recommended that an estate lawyer drafts your Will for you to ensure it is valid and binding.
What is an enduring power of attorney?
An enduring power of attorney appoints a trusted person to act on your behalf (“your attorney”) in particular circumstances. You determine when your attorney’s powers commence, that is you can specify if it is to come into effect immediately or only when a specific event arises.
In most cases, a person chooses to appoint an attorney in circumstances when the person no longer has capacity to make their own decisions.
Why would I need an enduring power of attorney?
An enduring power of attorney is a proactive way of pre-selecting a responsible person to manage your affairs if you happen to become incapacitated.
For a younger person, an enduring power of attorney may be drafted so it only comes into effect in the case of an accident or where a degenerative illness has been diagnosed and the appointor knows they will lack the capacity to make their own decisions.
In a time where an increasing number of elder abuse cases are being reported, for an older individual an enduring power of attorney could be useful way for someone who is estranged from their children and would prefer that a more trusted person in their life is in charge of their financial decisions.
If you are considering appointing an attorney but are not sure it is the right option for your circumstances, you should also seek the assistance of an estate lawyer.