If you're considering estate planning, you've probably encountered the terms Powers of Attorney and Wills. In this blog post, we explore in-depth information about these two aspects to enhance your understanding in this area.
Powers of attorney
In your life, there may be a time where you are faced with an event - such as an illness or an accident - that might take away your capacity to make your own decisions about things like how you spend your money, where you live and what support services you may need.
What happens if you don't have a power of attorney?
- it could lead to conflict over who should take responsibility of the decision making process if you are unable to this yourself
- making the choice of who should make decisions on your behalf could not be yours to decide
- the Victorian Civil and Administrative Tribunal (VCAT) may be asked to appoint an administrator or guardian to help you
So now you understand why you might need a power of attorney, how do you go about choosing an attorney?
With a power of attorney, the person giving the power is called the 'principal' and the person granted the power to act is called the 'attorney'. You should choose a person who you think will make the right decisions for you and who you trust. You are able to choose more than one person to be your attorney.
You are also able to choose someone to make decisions about your medical treatment and if you are ever unable to make these types of decisions because of illness or injury. The person with the powers to make medical treatment decisions on your behalf is called a 'medical treatment decision maker'.
Now you have chosen a trusted attorney, how do you go about making a power of attorney?
A power of attorney gives you control and choice over who makes important decisions for you when you no longer have the ability to do so. This could be because you are travelling overseas and need someone to make decisions whilst you are away or because you have lost the legal capacity to make decisions.
There are 3 types of powers:
- supportive powers of attorney (for help with decisions) The supportive power continue until you either cancel the power or you lose legal capacity to make particular decisions.
- general non-enduring powers of attorney. The non-enduring power continue until you either cancel the power or you lose legal capacity to make particular decisions.
- general enduring powers of attorney (for financial, legal and personal decisions). An enduring power of attorney means that your power of attorney continues when you are unable to make decisions on your own.
Each of these types of powers are different and better suited to different situations.
The Office of the Public Advocate has resources and information including downloadable forms to help you make a power of attorney.
A Will is a written document that states what you want to happen to your 'estate' after you die. It gives clear instructions for the person or organisation distributing your property about how this needs to happen.
Who can make a Will?
A will can be made by anyone over the age of 18, as long as they have the mental capacity to entirely understand what they are doing. A person under the age of 18 can only make a will if they are married or get a court order to authorise the making of a Will.
What can you leave in a Will?
Your estate includes any property you own at the time of death including things like investments, savings and cash. You can include in your Will the following:
- right and powers. For example, the right to appoint the trustee of a family trust
- assets. For example, cars, money, shares, houses and cash
- specific belongings. For example, books, photos, jewellery
- organ donation
- who you would like to act as guardians of your children
- how you would like your remains to be dealt with
What can't you leave in a Will?
Some assets do not pass from the deceased to another person through a Will. Examples of these include:
- assets from your superannuation or insurance fund. Normally these are handled by nominating a beneficiary when you take out the policy.
- assets that are held in family trusts or companies. Although these assets are under your control, you do not technically own these assets so they are not able to be distributed according to your Will. The Will would pass the control of the company or trust to the trustees or to some other listed beneficiary.
- property owned as joint tenants
What happens if someone dies without a Will?
If you die without a Will the law decides who gets your assets. This is called 'dying intestate'
Find out how you can get other support for Wills and powers of attorney. We recommend getting expert guidance on how to plan for your estate.