Estate Planning and Wills / Powers of Attorney and Guardianships
Planning For The Future
Should I make a will?
Yes. It is essential to make a will if you are concerned about who will receive your assets and belongings after you die. It is particularly important to make a will if you have a family or other dependants.
Even if you are married with dependants you need a will. If husband and wife are killed together, for instance in a motor accident, the older person is normally presumed to have died first. If you were the younger person, you might have inherited assets from your spouse – even though you were by then dead – but if you had not made a will your assets would be distributed under a rigid formula regardless of what you might have wished.
What is a will?
A will is a legal document that names the people you want to receive the property and possessions you own at the date of your death. These people are known as your beneficiaries.
Your property and possessions include everything you own: your home, land, car, money in bank accounts, insurance policies, shares, jewellery, pictures, furniture, and so on. Making a will is the only way you can ensure your assets will be distributed in the way you want after you die.
What is a ‘valid’ will?
A valid will is one that has been accepted by a court and put into effect by a grant of probate. To be valid your will must be:
- In writing – this includes handwritten, typed or printed;
- Signed – ideally your signature should be at the end of the will;
- Witnessed – two witnesses must be present when you sign your will or acknowledge it and they, too, must sign in your presence, but they do not have to be present together at the time they sign.
If your will is not made in this manner it may not be enforceable; the court has the power to grant or not grant probate (confirm that the will is valid) and your property could be disposed of as if you had not made a will. In exercising this power, the court needs to be satisfied that the document sets out how you want your assets to be distributed.
Can I make a will myself?
You can make a will yourself if you wish; printed will forms are available from stationers. There is no requirement that a Solicitor draft a will. However, it is not in your best interests to draft your will yourself. There have been very many cases where homemade wills were either unclear, not properly drawn up or caused an unwanted tax liability. Many of these cases end up in court and carry on for years, causing distress and perhaps hardship to the family of the deceased. In general, Solicitors do not charge a large fee for making a will, and since it is one of the most important legal documents you will ever make, it is false economy to try to do it without skilled professional advice.
What happens if I don’t make a will?
The legal procedures are more complicated and time-consuming and may cause expense, worry and even hardship to your family. The law provides a formula which sets out who is entitled to the property of a deceased person who has not left a will. The formula may not distribute your assets in the way you would have wanted.
It is not true that the Government takes a deceased person’s property if there is no will. This can happen only in exceptional cases where there are no close relatives or persons in a family relationship surviving the deceased.
How can I make sure my wishes are carried out?
You should appoint in your will a person called an executor to handle your affairs after you die. If you wish, you can name more than one person to act as executor. You can choose anyone to be your executor – your spouse, relative, a friend, your Solicitor – but you should first ask them if they are prepared to take on the task and confirm with them that they have been appointed.
Being an executor is a very responsible position. The executor has to obtain probate of the will and pay any taxes, debts or expenses before finally distributing the balance to the beneficiaries named in your will. An executor who is not a beneficiary may apply to the court for payment for his or her work as executor.
Can I alter my will if I change my mind?
Yes. You are free to alter your will at any time. If your circumstances change, you can and should alter your will. However, you cannot simply make an alteration by, for instance, crossing something out in the original will and writing in your new wishes.
If the alterations are minor, you can make a codicil (a separate document in which you change a provision in your will) but it is usually better to make an entirely new will unless the change is very simple. A codicil must be signed in the presence of two witnesses, in the same way as when you make your will.
What if I marry or divorce?
If you marry it is very important that you make a new will. Generally, marriage cancels any will you have already made, but there are exceptions which are very technical and that you would need to discuss with your Solicitor.
If you are divorced or have been separated for any extended period, you should also make a new will, or have your Solicitor help you make a formal addition (called a 'codicil') to your existing will. Divorce or annulment will cancel any gift you have bequeathed to your former spouse, and also cancel their appointment as an executor, trustee, or guardian under the will. But it will not cancel any appointment of your former spouse as trustee of property left by you for beneficiaries that include your former spouse's children.
Can I leave my assets to anyone?
Yes, but you should adequately provide for your spouse, de facto partner, children, including those for whose long-term welfare you and your partner have parental responsibility, and other dependants. If you do not, they could legally make a claim to cover their maintenance, education or advancement in life.
Where should I keep my will?
Keep your will in a safe place. It is preferable not to keep the will yourself in case it is mislaid. If the will is mislaid, it may be presumed to have been revoked. Solicitors hold wills on behalf of clients, usually at no charge. You should keep a copy of your will and note on it where the original is kept.
It is advisable to tell your executor where your will is kept. If you want to give personal instructions that you do not want to appear in your will, you can simply leave your executor a letter of instructions.
How can Fidelity Legal help me?
Having us draw up your will is in your interest because we will:
- make sure your will is valid – that is, properly drawn, signed and witnessed;
- make sure your wishes are clearly expressed;
- advise you regarding adequate provision for your spouse, de facto partner, children, former spouse, dependents, and any person with whom you are living in a close personal relationship;
- advise you about tax planning and you will, including any possible liability for capital gains tax which might result from provisions you intend to make in your will;
- advise you on choosing an executor and on the executor’s right to be paid for his or her time and trouble in administering your estate;
- advise you on the best way to arrange your affairs;
- keep the will in a safe place.
[Adapted from material prepared for the Law Society of
Authorising others to make your decisions
Power of Attorney
A power of attorney gives some-one who you trust (the attorney) the authority to make legal and financial decisions and enter into legal transactions on your behalf. Your attorney can buy assets in your name, and can sell your assets, such as real estate or shares, or can operate on your bank accounts and spend your money. A power of attorney usually operates from the moment it is signed but does not operate after your death.
A power of attorney cannot be used for health or lifestyle decisions. This is dealt with in more detail below under the heading Decisions on Medical Treatment.
Your attorney must always act in your best interests. Unless the attorney is expressly authorised, the attorney cannot gain a benefit from being an attorney. Your attorney should keep his/her own money and property separate from your money and property (unless he/she is a joint owner, or operates a joint bank account). Your attorney should keep reasonable accounts and records about your money and property.
The law relating to powers of attorney is State-based law. A Power of Attorney prepared in NSW is for use in
If the attorney is signing documents that affect real estate, the power of attorney must be registered at Land and Property Information NSW.
Decisions on Medical Treatment
When can you consent to medical treatment?
You can validly consent to medical treatment only when your consent is freely given. For example, if you consent merely because you believe you will be refused further treatment if you do not consent, your consent has not been validly given. In addition, you should receive accurate and appropriate information about your condition, treatments and proposed procedures.
To ensure that your consent is valid, you should be provided with as much information as possible. Amongst other things, you should be told and understand:
- your condition, or illness, including its severity or the result of any tests which you undergo;
- the diagnosis of your condition and the accuracy of the assessment;
- the various treatments which are available and the relative advantages and disadvantages of each, the risks associated with these, including possible side effects and likely outcomes;
- what will be done, how long it will take and expected recovery;
- the financial cost of any procedures or treatment; and
- the qualification and experience of doctors and other workers who may be treating you.
Consent must be given for the particular procedure or treatment. If you consent for a particular course of action, the doctor (unless special circumstances arise) cannot carry out a different treatment.
Consent is not required in emergencies where treatment is life saving, to prevent serious damage to a patient's health or to prevent the patient from suffering significant pain, and the consent cannot be obtained, for example if you are unconscious. In these cases doctors and other health workers are under a duty to act in your best interests. Also, consent is not required if the treatment has been authorised by the Guardianship Tribunal.
Can you withhold consent?
Yes. A fully competent patient is capable of refusing treatment or medical procedures. You, as a patient, have a right to self-determination and personal autonomy.
However, where a guardian is appointed for a patient, the failure to consent may be overridden by the Guardianship Tribunal and a Court.
Euthanasia
Euthanasia is the active and deliberate intervention by a second party to end life, with the express wish of the first party. This is distinct from discontinuing treatment or failing to consent to the commencement of treatment at the patient's request. Euthanasia is illegal in all states and territories in
What happens if you are unable to consent?
In most cases, a doctor can only give you medical treatment if you have consented to that treatment. If you lack capacity, you cannot give consent to that treatment, unless you have specified your wishes about the treatment before losing capacity.
Capacity
What is capacity?
Decisions about your health care, whether it be immediate treatment, or long term health care, are only valid if you have capacity when you make the decision. To 'have capacity', you must be capable of understanding the nature of the decision you are making and the effects that that decision will have on you and on others. If you have capacity, you are described as being 'capable'.
How is capacity measured?
There are no numeric measures or tests which can be done to determine if you have capacity. Capacity is not determined by whether you can perform a certain task, or by whether your decision is seen as wise by the people around you.
Capacity is measured by your ability to understand the consequences and nature of a specific decision. For example, you may have capacity to make a decision about whether to be treated for a particular health problem, because you can understand what is wrong with you, what the treatment will involve, and what the long term consequences of the treatment will be, but at the same time not have capacity to manage your financial affairs, because you are not capable of understanding the extent and nature of your finances, and the consequences of the decisions you are making about your finances.
People with mild intellectual disabilities may still be capable. It is also possible that you may lose capacity temporarily, for example if you suffer from an illness, but later recover from it. People in the early stages of dementia may lose capacity on a temporary basis.
Your capacity to make a decision is assessed at the time that you need to make that decision. If you are assessed as not being capable, this does not necessarily mean that you will never have capacity again.
What happens if a person doesn't have capacity?
If you don't have capacity and you have not specified how you want to be treated before losing capacity, someone else will make the decision about whether you should receive medical treatment, and if so, what sort of treatment that should be.
The Guardianship Act 1987 (NSW) sets out a list of people who will make that decision for you if you lack capacity. The decision will be made by a "person responsible" who will be either:
- a guardian or enduring guardian, or, if there is no guardian or enduring guardian,
- the most recent spouse, de facto spouse or same sex partner with whom you have a close and continuing relationship; or, if there is no spouse, de facto spouse or same sex partner,
- an unpaid carer who is now providing support to you or provided support before you entered residential care; or, if there is no carer,
- a relative or friend who has a close personal relationship with you
When appointing a guardian the Guardianship Tribunal must be satisfied that the proposed guardian's personality is generally compatible with the person under guardianship, there is no undue conflict between the interests and the guardian is willing and able to exercise his or her functions.
If there is no one falling within any of these categories, the Guardianship Tribunal may act as a substitute decision maker.
The decision maker gives consent if minor medical or dental treatment is required.
If the decision maker is not available, the doctor or dentist can proceed with minor treatment without consent if they can see from the patient's record that the treatment is necessary to promote the patient's health and well being and that the patient is not objecting to the treatment.
For major medical treatment, only the decision maker or the Guardianship Tribunal can give consent.
Consent cannot be given for treatments which are administered for the benefit of health carers, or health professionals. For example, a nursing home that is short of staff cannot ask a decision maker to consent to sedate residents to make it easier to care for them.
How can I retain control over my health care decisions if I lose capacity?
As discussed above, every person has the right to refuse or accept medical treatment, but the difficulty arises when you wish to ensure that you receive the treatment that you desire, when you are not in a position to make your preferences and desires clear.
You need to make clear your wishes about your future health care while you still have capacity. Some informal ways of doing this are by making your wishes known to friends, relatives and your doctor, and by writing your wishes down.
There are also some formal legal steps that you can take to ensure that your wishes are respected.
Consider the following possibilities:
- enduring guardianship; and
- advance health care directives.
Enduring Guardianship
An enduring guardian is someone who you appoint to make personal and lifestyle decisions and/or decisions about medical treatment on your behalf, if you are unable to make those decisions yourself.
Appointing an enduring guardian determines who can make a decision on your behalf, however it does not deal with the content of those decisions. You may choose to rely on your enduring guardian's ability to make decisions and have confidence that he or she will act in your best interests. However, you may prefer to write down your wishes in the form of an advance health care directive. This is discussed further below.
The appointment of an enduring guardian must be in writing and in approved form. Both you and your appointed enduring guardian must sign the document in front of your solicitor, barrister or a clerk of a local court.
The appointment will only take effect when you no longer have the capacity to make decisions and are incapable of understanding the general nature and effect of proposed treatment and incapable of indicating your consent or opposition to the proposed treatment. You may appoint more than one enduring guardian, to act on your behalf or different enduring guardians with separate functions.
Your enduring guardian must be over 18 years of age and not directly or indirectly involved in any aspect of your medical treatment.
Enduring guardians appointed to consent to medical and dental treatment can only act under Part 5 of the Guardianship Act, which authorises them to consent to major and minor treatments that will promote and maintain the health and wellbeing of the person who has appointed them.
An enduring guardian can consent to a medical or surgical procedure, operation, examination and any prophylactic, palliative or rehabilitative care customarily carried out by a medical practitioner. The authority to consent depends on the specific type of treatment. In particular, an enduring guardian cannot commit on your behalf for special treatment which includes any new treatment that has not yet gained the support of a substantial number of medical practitioners or dentists specialising in that area.
The appointment should detail the functions the enduring guardian is to exercise, and any conditions or limitations you desire.
An enduring guardian does not have the authority to override your objections.
The appointment may be revoked in writing until you no longer have the capacity to understand your decisions. Any revocation must be witnessed by a solicitor, barrister or a clerk of the local court and be given to the person previously appointed as your enduring guardian.
An enduring guardianship appointment can be reviewed by the Guardianship Tribunal or the Supreme Court that can suspend, confirm, revoke or vary the enduring guardianship appointment.
Advance Health Care Directives
An advance health care directive (sometimes called a "living will") is a written statement which contains detailed information about the medical treatment which you desire.
It comes into effect only when you are no longer able to make your own decisions.
In NSW, advance health care directives are not supported by legislation, unless they are part of the appointment of an enduring guardian. However, if a potential decision maker, such as a health care worker or guardian appointed by the Guardianship Tribunal is aware of the existence of your advance health care directive, it is likely to be influential when decisions about your health care are made. An advance health care directive should be up to date and consistent with anything you have said to the decision maker previously.
As an advance health care directive has no set format, it is desirable to consult a solicitor about preparing one. You should discuss your proposals with your doctor, health care worker, friends and family as well as disclosing the contents of any directive to them after it is made.
[The above notes are based on material prepared for the Law Society of NSW]
Deceased Estates / Probate
Executor of a deceased estate?
If you have been named as an executor in someone’s will, it means the deceased wanted you to administer his or her estate, perhaps in conjunction with another person.
There can be any number of executors named in a will, though one or two is usually considered sufficient. Your fellow executor could, for instance, be the Solicitor who drew up the will; in this case the Solicitor may charge for services performed in connection with the administration of the deceased’s estate, provided the will permits this.
If you are the sole executor, we can assist you to deal with the duties and obligations of administration.
Will I be paid for being an executor?
You are entitled to apply to the Supreme Court for commission for your work as executor. But if you are named also as a beneficiary in the will the bequest will usually be presumed to be payment for your administration unless there are circumstances or something in the will to overturn that presumption.
What if I don't want to be an executor?
Even if you earlier agreed to the deceased’s request, circumstances can change and it may no longer be convenient for you to act as Executor. You can renounce the executorship by signing a ‘renunciation’. The necessary documentation is filed with the Probate Registry of the Supreme Court.
What are an executor’s responsibilities?
In general terms, an executor's duty is to take charge of the deceased's assets and property, see that the funeral and administration expenses as well as debts and taxes are paid and finally to distribute the assets to the beneficiaries in accordance with the will.
You will have to begin by finding out and making a list of everything which the deceased owned or in which he or she had an interest. The list could include a home, car, money, bank or building society accounts, furniture, household appliances, jewellery, shares and other investments, insurance policies, superannuation, and holiday pay owing from an employer. In addition, if the estate is to be divided between a number of beneficiaries, the assets may have to be valued.
Next you will have to apply to the Probate Registry of the Supreme Court for a grant of probate. Probate is an order of the court saying that the will is valid and that the executor has the right to administer the estate.
When applying for probate you will need to complete a number of prescribed forms. You will also need documentary evidence of death, proof of proper signing and attestation of the will, and details of assets and liabilities.
What if the estate is small?
Banks and other financial institutions have varying rules which allow access to the deceased's funds without a grant of probate if the estate is very small. However, the financial institution will require undertakings and indemnities from you.
When we act in relation to a deceased estate we make enquiries as a matter of course of the financial institution concerned to ascertain at what level it will insist on a grant of probate before the executor can deal with the funds.
Where the estate is small, that is less than $50,000, no court fees are payable if an application for probate is necessary.
What do I do after probate is granted?
Once probate has been granted, the executor must collect the deceased's assets and take steps to pay the funeral and administration expenses and any debts or taxes – including income tax – the deceased owed.
In view of possible liability for capital gains tax, it is important to find out the date and cost of acquisition of the deceased's assets.
Funeral expenses are to be paid first and there is a particular order in which any other debts must be paid. After funeral expenses are paid, the executor is entitled to payment of any actual expenses incurred relating to the administration of the estate before other debts are paid.
Once debts have been paid, assets are either distributed according to the terms in the will or they are sold so that money can be divided among the beneficiaries.
As executor you might have to contact financial organisations and companies in which the deceased had money invested in order to realise those assets, and become involved in selling various pieces of the deceased's belongings such as jewellery, a boat or car.
A bank account may need to be opened, in the name of the estate, into which all funds belonging or due to the estate must be deposited and from which debts must be paid.
When and how are the assets distributed?
When all assets have been identified and, if necessary, sold to raise cash, and all debts have been paid, the remainder of the estate can be distributed to the beneficiaries.
The executor may distribute the assets if at least six months has passed since the date of the deceased's death and a notice has been published requiring anybody with a claim against the estate to provide particulars of the claim with a specified period – not less than 30 days.
The executor must prepare a distribution report and statement for the beneficiaries – given to them when they receive their share of the estate – showing what the assets were, how much money resulted from any sale of assets and what expenses and debts were paid from the proceeds.
Where an executor is applying to the court for commission for his/her administration, detailed accounts have to be filed at the same time with the Probate Registry and all payments and receipts by the executor properly approved.
What if there is no will?
There are rules laid down by law about how assets are to be distributed when there is no will. Briefly, a surviving spouse (this includes a domestic partner) receives the whole estate if there are no children or the children are those of the spouse. However, if there are children of another relationship, for example children of an ex-spouse or ex-domestic partner, the estate is divided according to a formula between the spouse and all children.
How can we help you?
We can:
- inform you in detail about the rights and responsibilities of an executor;
- prepare and help you to complete the forms needed to apply for probate;
- assist you to identify and collect the deceased's assets;
- advise you on the possibility of tax liability;
- advise you about the legal order in which debts must be paid and the remaining assets distributed;
- explain the legal order of distribution of the estate in a case where there is no will;
- assist you with any claims that may be made against you over administration of the estate;
- help you draw up a statement of assets for realisation and distribution to the beneficiaries.
[Based on material prepared for the Law Society of