Estate planning goes beyond a simple will or trust. It involves sorting out how you will be looked after (medically, legally, and financially) if something were to happen to you. As you can see, there’s a lot to account for. Before you panic, keep reading this article to find out what you should include in your estate plan.
The Pre-Work
Before you start thinking about what you want in your estate plan, think about why you want an estate plan. Is it for your family to be looked after? Is it for someone to take over the business?
Take some time to consider your goals and ask yourself:
- What assets do you have?
- What responsibilities/obligations do you have?
- Do you have any dependents?
- Who do you want to be looked after/protected if something were to happen to you?
- Is there anyone you trust to look after your affairs?
The goals you formulate will dictate what you will need to include in your estate plan.
The Estate Plan
Now that you’ve figured out your wants, we can get started with the estate planning. Common components found in an estate plan include:
- A will;
- A trust (if any);
- Power of Attorney;
- Succession Plan and
- Final Arrangements.
A Will
A will is a standard legal document included in any estate plan. A will sets out how your assets will be divided up after you pass away. It should also specify who you have appointed to carry out your wishes (‘executor’) and who you are assigning assets to (‘beneficiary’).
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Get startedA Trust
A trust is an arrangement where one person will hold property (‘trustee’) for the benefit of another (‘beneficiary’). It’s something to consider if you have young loved ones. For example, a parent could direct a third-party to hold a house on trust for their children in the event that they pass away. When their child comes of age, ownership will pass from the third-party to the child.
Power of Attorney
A Power of Attorney is a legal document that allows you to appoint someone to act on your behalf, should you become incapable or unavailable. You can specify the extent of their power; what powers they have and how long they have them. Your power of attorney should be someone that you trust to do good by you. You can appoint a family member, friend, or your lawyer. As a means of last resort, you can even appoint the NSW Trustee and Guardian.
Succession Plan
If you are a business owner, you should have a succession plan in place. A succession plan allows your business to continue even when you have to take a step back. It can identify and train certain people who you’ve selected (“successors”) to step into leadership positions. Alternatively, it could specify who will own the business now that you’re not in the picture. Like an estate plan, it’s never too early to create a succession plan.
Final Arrangements
In your estate plan, you can also include your wishes for final arrangements. Whether you want to be buried, cremated, or have your organs donated. You can also have a plan in place to pre-pay for funeral arrangements. This would take some burden off your family and friends during such a difficult time.
Conclusion
It might not be the happiest topic but estate planning is something you should really consider. Nothing in life can be predicted and you’ll thank yourself for having everything in order. If you have no clue where to start, or what documents you need, reach out to an estate lawyer.
