If you are considering purchasing or selling your residential home, it is also a good idea to consider making a new Will or updating an old Will. Making a new Will is especially important when you are entering into a large financial transaction like buying a house as doing so changes your financial circumstances.
A new Will can be made at any time. However, if you are purchasing a property and contemplating leaving that property as a specific gift to someone, a new Will should only be made after the purchase transaction has been completed.
A Will is a legal document that allows you to express your wishes as to who will inherit your estate (or assets) when you pass away. Having a Will is the best way to ensure that your loved ones and dependants are financially looked after when you are no longer around.
Studies show that at least 45% of individuals living in Australia do not have a Will. Whilst Australian law does provide a legal backup for individuals that pass away without a Will (mentioned below), your loved ones and dependants may not get the financial protection they would have received if a Will was made. The person who ends up inheriting your estate may not be your desired recipient.
Not having a Will means that you are considered to have died “intestate”. This means that your assets will be distributed in accordance to a set legal formula. Intestacy rules include a hierarchy of relatives that can inherit your estate depending on who is considered the next surviving relative. For example, if you leave a spouse and children, your spouse will get the first $100,000.00 and personal chattels. If you have over $100,000.00 in assets, your spouse receives a 1/3 and your children 2/3’s of the balance. If there are no next-of-kin, all assets go to the government.
Another important document that you should consider getting is an Enduring Power of Attorney. An Enduring Power of Attorney is a legal document that gives a person (an Attorney) the power to make decisions on your behalf when you have lost capacity and cannot make decisions yourself. For example, if you have dementia. There are three types of Enduring Powers of Attorney. These are:
- Enduring Power of Attorney – This allows an Attorney to make financial (including legal matters relating to financial matters) and personal decisions (for example where a person lives) on your behalf; and
- General Power of Attorney –are used in cases of a specific purpose and for a fixed period. For example, when someone goes overseas they might need another person to look after their finances;
- Enduring Power of Attorney (Medical Treatment) – This allows an Attorney to refuse medical treatment on your behalf (for example, to turn off your life support).
If you do not have an Enduring Power of Attorney and you lose capacity, your family will not be able to make financial decisions on your behalf. They will need to make an application to the Victorian Civil and Administrative Tribunal who will appoint an Attorney. They may appoint a family member. However, there is no certainty of who they will appoint and they might end up appointing State Trustees.
If you do not have an Enduring Power of Attorney (Medical Treatment), your family can still make medical decisions on your behalf. However, they cannot refuse medical treatment.
Please contact one of our skilled lawyers if you would like to make a new Will and Enduring Powers of Attorney.