Estate Planning: Understanding Which Documents You Need

Estate planning may seem like a solemn task, but it’s about more than just what happens after you die, it also deals with what happens if you are alive and ever unable to act. It’s essential that you think about your family, should you not be around or are unable to manage your property, which is where good estate planning advice is necessary. Not sure what documents you’ll need to get started? Read on.

Powers of Attorney

Powers of Attorney is where you nominate an Attorney (person) or Attorney’s (person’s) to look after your affairs should you become incapacitated. Generally, this can be all of your financial affairs, and depending on the state you are in this can include your medical affairs. However, you can also have a limited Powers of Attorney, which allows your attorney to look after specific parts of your affairs for a limited time.

We like for our Clients to consider using a limited Power of Attorney with Self-Managed Superannuation Funds (SMSF).

For example, let’s take Mr and Mrs Smith and their SMSF, Smiths Super. Mrs Smith is the one who does most of the money management and the day-to-day management of their Super; Smiths Super. Mr Smith provides a limited Power of Attorney to Mrs Smith to be in place of him as Director of their Trustee company, and to make decisions on his behalf for his superannuation. Because of this limited Power of Attorney, Mrs Smith becomes the sole director of the Smiths Super.

This provides two key advantages. The first is that should the fund be penalised for any reason, then only Mrs Smith will be fined and not both Mr and Mrs Smith. The second is that only Mrs Smith is required to sign documentation for the fund.

There are other ancillary benefits that come from this approach that relate to issues to deal with bankruptcy and liquidation; but as you can see this strategy does have tangible benefits.

Directors Company Succession

If you have a company as a Trustee for your SMSF, Trust or even just as a business, you need to think about who will be the directors of the company should something happen to you. Unlike assets, you cannot transfer directorships in your will. Therefore, it is important to work out the succession of directorships should something happen to you. Part of our Estate Planning process is to make sure that we have clear Director Company Succession, to ensure that there is continuity with whichever company you have.

Without this you can potentially find yourself without directors for the company, and that means you will not have anybody to run bank accounts and make necessary changes, or take action to allow the company and/or trusts (i.e. Family Trusts, SMSF) to continue to run.

Most overlook this vitally important part of Estate Planning, but without it you can run into some serious issues around the continuity of the company should something happen.

Enduring Guardian and Advanced Care Directive

The purpose of an Enduring Guardian is to provide someone the ability to make medical decisions on your behalf, should you become incapacitated. This gives them full control of your medical choices.

The purpose of an Advanced Care Directive is to provide binding instructions on the medical treatment you are to be given (or not given), should certain medical conditions (comatose, terminal illness etc.) have occurred. It is you providing your wishes in writing and in advance.

Combined, you provide a person you trust the ability to make medical decisions should you become incapacitated, whilst providing binding instructions should your health deteriorate further.

SMSF Wills

Superannuation does not form part of your estate automatically upon your death. It is therefore important to make sure that you put the relevant things in place to ensure your superannuation goes to where you want it to upon your death. If you have an SMSF, we use what we call an SMSF Will to do this.

Our SMSF Will is binding on the Trustee and can provide flexibility on how the funds in your superannuation are dealt with, including allowing the funds to be directed to an SMSF Death Benefits Trust.

An SMSF Death Benefits Trust is very similar to Testamentary Trust, in that the funds are better protected from separation and divorce. Like with all of our documentation, we provide for the funds to be directed for blood lineage (children, grandchildren etc.) beneficiaries only.

If you’re looking to get an estate plan in place, PCR Accounting & Advisory offers estate planning advice and services that can help you decide on important matters. Contact one of our expert estate planning consultants today on 03 9847 7516 to organise your estate plan.

Owner of PCR Accounting & Advisory, Peter Marmara-Stewart is a top-tier accountant and financial advisor dedicated to helping clients reach their business goals and achieve financial freedom. Peter is highly regarded for his client-focused approach and entrepreneurial spirit, catering to a diverse range of professionals across a wide scope of industries all across the country. Peter’s expertise can help you plan effectively, set goals, maximise profits and protect your assets. Get in touch today on (03) 9847 7516.