Estate planning is the process of determining what you want to happen to your estate, which includes all the rights, titles, and interests that you have in the property you own. Estate planning involves both planning for the possibility of mental incapacity and planning for death. It is one of the most important steps you can take to make sure your wishes regarding your assets and healthcare are honoured, and that loved ones are provided for after you are gone. Though often overlooked or even put off, a comprehensive plan can answer a number of legal questions that often arise whenever anyone dies.
Why is estate planning important?
Through proper estate planning, you can determine:
- How and to whom your assets will be distributed after your death;
- Who should handle your finances if you become incapacitated;
- Who will manage your personal care and health care if you become unable to care for yourself;
- If your beneficiaries get their inheritance all at once, or in incremental distributions over a period of time via a trust or other structure;
- Who will manage your estate after you are gone; and
- Who will care for your minor children.
Who needs estate planning?
The short answer is that everyone needs estate planning. Even though you may not be wealthy, some degree of planning is necessary. The following people in particular need to consider putting something in place.
- People with minor children
You need to specify who will care for your children should both their parents pass away and, if you are able, how you will provide for that care financially. If you do not set this out in your Will, the Courts will decide who cares for your children.
- People who own assets in multiple states/countries
If you own assets in more than one country (or even state within Australia), you will need to make plans for the distribution of those assets. If you die intestate and multiple applications need to be made to Courts in each jurisdiction where you hold assets, the cost to your estate can quickly eat away the value of your estate. It also adds considerably to the time necessary to finalise your estate meaning your family may still be trying to deal with your assets years after your death.
- People who own a small business
You must determine what should be done with your interest in that business-whether it is to be passed on to your heirs or sold. If it is to be sold, you may need to make provision for any business partners to have the first option via a deed or agreement.
Other benefits of Estate planning
Estate planning consists not only of making arrangements for your assets, but also involves such processes as appointing additional company directors now so that your business can continue to run should you die and powers of attorney which will allow your nominated Attorney to make healthcare decisions for you if you are unable to make them for yourself.
As you can see, estate planning is every bit as relevant to your own life as it is to the lives of the people around you. Having an experienced estate lawyer to guide and inform you through the process will significantly impact how accurately your most critical interests are represented.