What is Estate Planning?

What will happen to your family and affairs?  Estate planning is the process of providing the answer to that question.  Estate planning is a lifelong process of reviewing your situation and planning for the future. It includes planning for your retirement, for the possibility of disability and for death. Estate planning considers a wide range of legal, financial, emotional and practical issues.

What is a will?

A Will is a written set of directions for the disposal of your affairs after your death.  A Will appoints someone responsible for carrying out those instructions.  A Will provides for your financial affairs. It may also provide for other wishes to be dealt with after your death, for instance, disposal of your body and appointment of guardians for your children.  The provisions of the Will take effect only on death.  You can change your Will at any time during your life.

The first step is to consider the responsibilities you have and the means you have available to fulfill them. Map out a plan for your affairs after your death.  You need expert advice to properly draw a Will.  It is unwise to attempt to draw your Will without professional assistance.  It can be hard to express your wishes precisely and without ambiguity. There are precise rules on making a Will, which if broken may leave the Will ineffective.  With professional advice you have the benefit of experience and expertise.

What is Power of Attorney

If you were to fall seriously ill, by a stroke for instance, what would happen to your affairs?  If you are lying unconscious in a hospital bed who would deal with your finances?  How would documents be signed? How would your bank account be operated?

You can authorise someone else to deal with your affairs by giving specific authorities, say to operate a bank account or deal with social security.  You could also give a general authority to deal with your affairs. This can be done by a written authority appointing someone as your attorney.

A Power of Attorney will authorise another person to act on your behalf.  People often give a Power of Attorney to someone they trust while they are in hospital or if they will be overseas for a period of time.  The person who gives the power is called the Donor or Grantor. The person who receives the power is called the Attorney, Donee or Grantee. Some people put in place a Power of Attorney as a precaution to protect against the possibility of becoming incapable of handling their own affairs, particu­larly if you are infirm or elderly.

What type of Power of Attorney

A standard Power of Attorney lapses with the incapacity of the person giving the power.  Under a standard Power of Attorney, if you are not capable of conducting your affairs your attorney cannot act for you.  An application would need to be made for the Court or the Guardianship and Administration Board to appoint someone to administer your affairs.

Under an Enduring Power of Attorney, the power to act survives the incapacity of the person giving the power.  For this reason most people will want to grant the power in the form of an Enduring Power of Attorney.

Under a standard Power of Attorney the Attorney is not bound to take action. If it is too hard, the Attorney may refuse to act.  This is not so under an Enduring Power of Attorney if the person giving the power has become incapable.  In that situation the Attorney must act.  The Attorney in such a case is like an executor of a Will and is bound to act as trustee to protect the best interest of the incapable person.  There are special rules to make an Enduring Power of Attorney.

Who do I appoint?

You should appoint someone you trust.

Make sure your Attorney is willing to carry out the responsibili­ties under the power.  An Attorney is bound to deal with his responsibilities with utmost good faith and tell you the nature and extent of any interest which may conflict with the duties under the power.  Any capable adult can be an Attorney.  You could appoint a trustee company or some other professional adviser. Professionals are likely to charge a fee. Find out the terms of the retainer.  Professionals offer independence and expertise but will they be expert on the dynamics of your situation and family.  Think twice before appointing a professional carer or health service provider as your Attorney. Your trusted spouse or partner is a common choice as Attorney.

A Power of Attorney should not be given lightly.  The Attorney has great power.  The Attorney should be carefully selected and trustworthy.  Often a trusted family member or friend is the best choice.  Typically such persons do not charge a fee but consider leaving directions if there are likely to be significant expenses.

What is an Enduring Guardianship?

Adults have the right to determine where we live, who to see or visit, what medical treatment we want or need and what services we will have.  This right relies on our mental capacity to make reasonable judgments about these and other lifestyle matters.

A guardian appointment enables the nomination of a substitute decision maker for necessary lifestyle decisions to make sure that wishes in respect of these matters are known and carried out.  The person or persons is empowered to  make lifestyle decisions if you subsequently lose the capacity to make those decisions for yourself is called your Enduring Guardian.

For example: Due to your worsening condition, you can no longer live at home on your own. Mentally, you are unable to make a decision about where to live. Your daughter wants you to live at her home and she has made arrangements for this. Your son believes you will be best cared for in a nursing home. Prior to losing capacity, you appointed your very close friend as your Enduring Guardian. The decision of where you will live, once you have lost capacity, is now up to your good friend as guardian to make.