Genders and Partners

Wills and Estate Planning Adelaide: Wills, Trusts and Estate Planning for New and Young Parents

Estate Planning, Wills, Wills and Estate Planning, Young Children
Wills, Trusts and Estate Planning for New and Young Parents

New and young parents often mistakenly consider that have too few assets to bother with creating an estate plan.

They probably have a home with just a small amount of equity, and hopefully they have decent jobs, and reasonable prospects for advancement.

Most of us have superannuation, and many super funds carry life insurance.  In dollar terms, it is not uncommon for young people to be worth more dead than alive.

When considering estate planning they should think about naming a guardian for their children and to make sure their money goes to the kids.

Most people grossly underestimate the money it will take to raise their young children and educate them. They frequently only have a small fraction of the life insurance that is needed. Fortunately, term insurance is relatively inexpensive for young people.

They should consider establishing a Trust to receive the insurance and other assets. This can be done through a Testamentary Trust created in their Will, or as a Discretionary Trust.

A trust provides some asset protection, and professional management for the funds.

5 Common Estate Planning Mistakes

Wills and Estate Planning Adelaide: Star Trek and Estate Planning

Estate Planning, Planning for Disability and Incapacity, Wills
Wills-Estate-Planning-slider

Of all the countries in the world, Australia ranks in the top 5 with longest lifespans (17 places ahead of the UK and 33 places ahead of the USA).  Each year, our average life expectancy continues to increase.

And yet, more than half of adult Australians do not have a legal Will, and even fewer have an integrated estate plan.

Life used to be simpler. People worked for the same employer for their entire career. They had government-guaranteed pensions. Medical expenses were manageable. Divorce was rare and remarriages rarer still.  25 years ago, when my legal career began, I can clearly recall the expression “broken home” being used as an excuse for various misconduct. Most people were not invested in the stock market.

But, the trade-off was that although life was simpler, it was also significantly shorter. Retirement didn’t last long, so people didn’t worry as much about having sufficient savings to last a lifetime. Long periods of incapacity were unusual.  You worked, then you died.

When the Australian Government began the aged pension in the 1920’s, they set the age-of-eligibility at 65 for men.  At that time, the average life expectancy for men was only 63, so the Government did not expect to have to pay out much for the pension, nor medical treatment, aged care or publically assisted accommodation.

Genders and Partners | Wills and Estate Planning - Lawyer Adelaide

Wills and Estate Planning Adelaide: Is it Time for The Talk?

Estate Planning, Planning for Disability and Incapacity, Trusts & Guardianship, Wills

Challenging Estate Planning Conversations

Is it Time for The Talk?

In family life there are a number of “Talks” which parents need to have with their children. Remember “Where do babies come from?”

Well, much later in life, older parents need to talk to their adult children about Wills and powers-of-attorney, elder care and end-of-life decisions.

In my practice as a lawyer specialising in estate planning, I have repeatedly noticed that my older clients are generally much more willing to discuss estate planning issues than their adult children.

I have speculated as to the reasons for this, and have come up with a list of possible explanations:

  • Fear of being seen as interfering in their parents’ affairs;
  • Concern at how their interest in their parents’ estates may be interpreted by others;
  • Discomfort at confronting the mortality of their parents;
  • A recognition that parents are getting older, and perhaps their best health is behind them;
  • A perception of “passing the baton” from one generation to the next.

Genders and Partners

Wills and Estate Planning Adelaide: The Benefit of Advance Directives

Estate Planning, Planning for Disability and Incapacity, Trusts & Guardianship, Wills, Wills and Estate Planning
The Benefit of Advance Directives

A recent study in the New England Journal of Medicine, shows one in four elderly people require someone else to make decisions about their medical care at the end of their lives.

These findings support the value of advance healthcare directives as a means of making end-of-life treatment preferences known (sometimes called anticipatory directives or living wills).

The study found that such formal estate planning documents improved the likelihood that a patient’s wishes would be followed and reduced emotional trauma among family members.

The results illustrate the value of people making their end-of-life wishes known in an advance directive (living will) as well as designating someone to make treatment decisions for them before the end-of-life stage.  This is why both a Natural Death Advance Directive and a Medical Power of Attorney are necessary parts of a modern integrated estate plan.  Each document fulfils a specific purpose.

The Associated Press reports: “In the study, those who spelled out their preferences in living wills usually got the treatment they wanted. Only a few wanted heroic measures to prolong their lives. The researchers said it’s the first accounting of how many of the elderly really end up needing medical decisions made for them.”

Genders and Partners

Accommodation after Death?

Death Benefits, Estate Planning, Trusts, Wills

This isn’t the beginning of a joke about the person who died and went to Heaven… It’s a serious estate planning question about how a family-member might continue to live in a property after the owner has died.  This question frequently arises (where a spouse, child or sibling was living with the deceased), and it is often the cause of unnecessary concern & anxiety.

Following your death, family-members may have a challenge in finding new accommodation quickly; they may not have the finances available and if the house is sold quickly, could be rendered homeless.

Is there some way to delay the sale-after-death for a reasonable period to allow the family-member some time to adjust to his new circumstances; to cope with the grief of losing you, and to build-up finances towards a deposit for his own property or to find a suitable home to rent and move out?

Yes – there IS a way!  In your Will, you can create a testamentary trust leaving the house on trust, to be used by the intended person (let’s call that person the Tenant), with a clause in your Will saying that the Tenant can stay in the property for the agreed period.

The trustees of the house won’t be allowed to sell it without the Tenant’s consent.  It is not theirs to sell.

Your Will can contain all sorts of additional conditions, such as whether the Tenant will be obliged to insure the house correctly, pay rent and keep it in good repair.

There may be an agreement that the Tenant can move to a replacement property under the same terms, say if the original property becomes too much for the Tenant to mange and maintain. If a replacement house of less value is purchased the spare funds will go into the deceased’s residuary estate.

This, of course, only works if the property can be passed on this way in a Will and the house isn’t required to be sold immediately for cash for a particular reason, perhaps to clear a tax bill or to pay a specific monetary legacy.

Genders and Partners

Wills and Estate Planning Adelaide: Organ Donation as part of your Estate Plan

Death Benefits, Estate Planning, Trusts & Guardianship, Wills

There are a number of ways in which you can make an anatomical gift, which is a gift of your organs, body parts or your entire body for transplant, therapy, research or education.

Although you can put a clause in your Will or other properly signed and witnessed documents, it is best to sign up on a nonprofit organ donor registry such as the Australian Organ Donor Register.

This registry is a confidential computerised database that documents your wish to be an organ, tissue and/or eye donor. It integrates with the various state Departments of Motor Vehicles to note upon your drivers licence at the time of renewal.

In your medical power of attorney, you could give the power to make an anatomical gift to your medical agent, who would then have the authority to make a gift of all or part of your body in accordance with your previously-expressed wishes.

You may have a concern that your life might be ended prematurely in the interest of harvesting your organs. By law, every effort has to be made to prolong your life in accordance with your wishes, before an anatomical donation is considered. Also by law, the medical team treating you must be separate from the transplant team.

Generally, with the exception of gifts during your own lifetime such as blood, a kidney or bone marrow, body-part recoveries can only be pursued after all life-saving measures have been exhausted and you are officially declared dead.

There are no guarantees with anatomical gifts. Just because you direct that your body or parts be used for transplants, therapy, research or education, does not necessarily make it so. Your anatomical gifts must be examined and be acceptable to the medical school, anatomy department or organ transplant team.

There always is a need for bodies and body parts. There are long waiting lists for people in need of transplants. Even if your eyesight is poor, you may have a good transplantable cornea that could give somebody the gift of sight. You may have skin that can be used to aid a burn victim or bone that could be used for an accident victim.

Genders and Partners

Wills and Estate Planning Adelaide: Estate Planning for Children with Special Needs

Asset Protection, Estate Planning, Trusts, Trusts & Guardianship, Wills, Young Children
Estate Planning for Children with Special Needs

Most parents of disabled children worry about the day they won’t be around to help care for them, whatever their age.  They want to help them qualify for government (state or federal) assistance for medical and other services, and also to provide for their recreation, clothing and other small luxuries that improve the disabled person’s quality of life.

The difficulty for these parents, is in trying to grapple with the too-hard decision of who will look-after their children after the parents have gone. Many cannot overcome this emotional-paralysis, and simply hope against hope they will live just slightly longer than their child, so that neither parent nor child ever have to deal with the situation.

The reality is that most disabled children outlive their parents, so providing for their care after the caregiver’s death is a vital issue. If the parent simply leaves money for the child, it could disqualify the child for government assistance, but still not provide properly for the child’s special needs.

A special needs trust may present a solution. A lawyer specialising in the legal needs of the elderly and disabled, can help the parents or other family members to set up a trust.  With careful planning (both legal & financial), the assets may not be taken into account by the government when assessing the child’s entitlement to assistance, but distributions from the trust are used to provide greater comfort & independence for the child.

In this way, even after the parents have died, they can continue to care for their children. This can assist children with a variety of disabilities, including Down syndrome, autism, cerebral palsy, the aftermath of vehicle accidents, chronic diseases or anyone who may need a combination of government and private services to provide a good quality of life.

Genders and Partners

Wills and Estate Planning Adelaide: More common pitfalls of estate planning and how to avoid them

Blended Families and Divorce, Death Benefits, Estate Planning, Pensions and Retirement Planning, Planning for Disability and Incapacity, Wills
More common pitfalls of estate planning and how to avoid them

In my law practice I see lots of mistakes that people have made when it comes to estate planning, as well as some estate-planning strategies that could be used a lot more.

One of the most common mistakes is a misunderstanding of beneficiary nominations. Nowadays, many assets are transferred at death through superannuation funds, life insurance policies and annuities.

The owner of those investments or insurances (the person who set them up) will often have nominated a particular person(s) to receive the benefits of them, once the owner has died.  This is a separate & binding contract which can bypass the owner’s legal Will.

Many people don’t appreciate how important it is to get the designations of those nominated beneficiaries right.  I typically see beneficiary nominations where at the start of the marriage each spouse nominates the other as the sole nominated beneficiary for the super & the life insurance.  Unfortunately most people forget to keep their binding nominations up to date.  They forget to add the children, or only add some of them, leading to unintended consequences & heartache.

Similarly, if a child dies, most people would want that share to go to that child’s children, ie to the descendants, down the bloodline to the deceased child’s children.  Sadly many people get this wrong, and end up accidentally disinheriting their grandchildren.

And you can’t necessarily rely on “common sense” to sort it out after your death. Unfortunately, there’s little consistency within the financial-services industry. If the insurance plan administrator or superannuation trustee doesn’t know how to handle it, your family will be the ones paying to sort it out.

Wills and Estate Planning Adelaide : The Disinheritance Debate

Death Benefits, Estate Planning, Inheritance Claims & Contested Estates, Planning for Disability and Incapacity, Wills
Wills and Estate Planning Adelaide : The Disinheritance Debate

60 years ago, a baby girl was given up for foster care by her birth mother due to shame about her illegitimate birth.  They did not live together after the first year of the baby’s life, and after the first 7 years shared no relationship at all other than biological.

Now the birth mother has died and left only $100 in her Will to that baby girl (now aged 60). The bulk of the estate was left to two other daughters. The disinherited daughter successfully sued for a third of the estate.

People always say it’s not about the money. But when someone is left out of an estate, they feel hurt, and their emotions take them on a roller-coaster ride.  Money and love get mixed-up.  Heart and head collide.  Grief can very quickly turn to anger, and people can easily relive childhood slights.

Highly charged issues of hurt, shame, pride, greed, love, unfairness, resentment, anger, prejudice and entitlement take over from logical thought.

In my legal practice I have heard hundreds of reasons for excluding family from inheritance.  Older generations were brought up to have different degrees of tolerance for unwed mothers, couples living-together and same-sex relationships.  The rising numbers of step-children provide real challenges to family harmony, and in many cultures it is considered acceptable to leave the bulk of the estate to male children.

Genders and Partners

Wills and Estate Planning Adelaide: Peanuts and Monkeys in Estate Planning

Estate Planning, Wills, Wills and Estate Planning

It’s not hard to find do-it-yourself Wills or Will-kits and other estate-planning materials on the Internet. But the topic is complicated, and the right solution is specific to each individual.

The laws vary from country to country, and even within Australia they vary from state to state.  They also change over time, and the laws related to estate planning have also undergone rapid changes internationally over the past several years and are starting to change in Australia too.  Further changes to the law are expected in the next few years, as Australian governments try to cope with the retirement of so many Baby Boomers.

If you’re creating or updating an estate plan, it’s essential that you seek the advice of a lawyer who’s well versed in the key issues. Not only can a specialist lawyer advise you how to ensure that your assets are properly distributed and that your health care proceeds in accordance with your wishes, but he can also do so with an eye toward protecting those assets (from creditors, bankruptcy, litigation etc).

Of course, any time you hear the word “lawyer,” it’s natural to worry about the legal costs you might incur. But the process is more affordable than people fear. You might be tempted to postpone creating an estate plan, assuming that you need to have a lot of assets to make the process worthwhile. Alternatively, there are plenty of excuses to delay this important process: waiting until after they are married, until the kids are born, until the kids are grown, until they’ve retired, until the grandkids are born etc. But everyone – regardless of life stage or the size of their estate – should think about hiring a lawyer to draft the basic estate-planning documents: a Will, an Advanced Directive, and powers of attorney.

Before you hire an estate-planning lawyer to draft or update your estate plan, it’s important to understand your role in the estate-planning process. Your estate plan will be most effective if you spend some time at the outset finding the right lawyer for your needs and thinking through what you’re trying to achieve as well as whom you trust to see your wishes through.