5 estate planning documents every Australian senior should make

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Estate planning is the process of making end-of-life arrangements and preparing important documents like a Will and appointing a Power of Attorney or alternate medical or financial decision-maker.

Having important estate planning documents in place can provide peace of mind to you and your loved ones. Estate planning ensures your legal wishes are set out for how you would like your estate to be managed after your death. Documents like an Enduring Power of Attorney or Appointment of Medical Decision Maker also allows you to select a person who can make medical or financial decisions on your behalf, if you become unable to do so later on.

This article explains each of the five most important estate planning documents Australian seniors should make. These documents will ensure your wishes are known for your end-of-life care and distribution of your estate and assets after you pass away.

We will explain the following estate planning documents, and in which state each is required:

1. Last Will & Testament
2. Enduring Power of Attorney
3. Advance Care Directive
4. Appointment of Medical Decision Maker
5. Statement of Wishes

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1.Last Will & Testament

A Last Will & Testament is a legal document outlining your final wishes about how your estate will be distributed after your death. Your estate includes your assets such as cash, property and personal effects. Your Will is a legally binding document that outlines how these things will be distributed. It's the only way to ensure your wishes are followed after your death.

While it’s probably the most important document a person will ever make in their lives, only about half of Australia’s adult population (48%) has one, according to comparison site finder.com.au.

Making a Will isn’t as complicated as some people may think. You don’t need to pay a solicitor to make one and there is no official document that needs to be filled in. To make a legal Will, your wishes just need to be clearly stated in writing and the document must be signed by the Will-maker and two witnesses.

What if there is no Will?

If you die without a valid Will, this is called ‘dying intestate’. In this case, certain laws of intestacy apply and your assets will be distributed by default to your family – but perhaps not in accordance with your wishes or preferred allocation.

To avoid unnecessary confusion, fees, delays and family feuds – get a Will!

How to make a Will in 7 easy steps

When making a Will, you need to make some personal decisions.

STEP 1: CHOOSE BENEFICIARIES

A beneficiary is the person or people named in a Will, to be gifted items, or receive an inheritance, from an estate when someone dies. A beneficiary does not need to be an individual – it can be a person, group of people, or an organisation.

STEP 2: APPOINT AN EXECUTOR

Once you have decided on your beneficiaries, the next step in making a Will is appointing an executor.

An executor of a Will is responsible for carrying out the terms of your Will after you die and taking ownership of your estate. The executor is also in charge of distributing the assets to the beneficiaries as per your Will.

STEP 3: APPOINT A TRUSTEE (IF REQUIRED)

If you are leaving assets in a trust, you will need to nominate a trustee to manage the account. A trustee may be the same person who you appointed as your executor.

STEP 4: APPOINT A GUARDIAN (IF YOU HAVE YOUNG CHILDREN)

If you have children who still require parental care, appointing a guardian (or guardians) guarantees that your guardianship wishes about who will care for them if you pass away as their only surviving parent are extremely clear.

It is important to note that while a Will is a legal document, guardianship under a Will is considered a wish and is not necessarily binding.

The trustee may either be the same person you appoint as guardian of your children, or someone else entirely whom you trust with this responsibility. The nominated trustee can administer any money or trust fund you’ve allocated to care for your children or dependants.

STEP 5: SIGN YOUR WILL WITH A WITNESS

A Will is not a valid legal document in Australia unless it’s signed by the Will-maker in the presence of two witnesses.

It’s important to remember to not date or sign the document until the witnesses are present and are watching you do so in front of them. They do not need to know the contents of the Will.

You don’t need anyone official, like a Justice of the Peace, to bear witness to your Will. Witnesses just need to be 18 years old or over and physically present at the time of signing.

STEP 6: KEEP YOUR WILL IN A SAFE PLACE

Your Will does not need to be lodged or submitted anywhere. Just ensure you make one! Keep a copy in a safe place and give another copy (or the original) to your executor or solicitor.

After your death, your executor must be able to easily find your original Will, so you will have needed to store it someplace secure but accessible.

Storing your original Will at your bank, rather than at your home, keeps the document safe if the property is destroyed by fire. Banks usually hold Wills in a safe deposit box or envelope. Storing your Will at the bank also allows you to keep it with any mortgage documents you might have there.

STEP 7: UPDATE YOUR WILL WITH SIGNIFICANT LIFE CHANGES

Your Will shouldn’t be a ‘set and forget’ document. Ensure you update your Will as soon as possible when your circumstances change, particularly with new relationships or previous relationships ending.

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2. Enduring Power of Attorney

An Enduring Power of Attorney (EPOA) is a legal document allowing you to nominate a person/s to act on your behalf. You may wish to authorise someone to make decisions on your behalf relating to legal, financial and personal matters.

Most commonly, an Enduring Power of Attorney is used to pay bills; sign documents; manage, sell or buy property; or make decisions about where the person might live. It can be useful to have an EPOA if you become unwell or lose the ability to make decisions or manage your financial affairs yourself.

Can I make an EPOA any time?

Anyone aged 18 years or over can make an Enduring Power of Attorney at any time as long as they have ‘full legal capacity’ to do so. In other words, they must know and understand what’s involved with appointing an attorney and the implications of their decision.

If a person does not have capacity to appoint an Enduring Power of Attorney, their state tribunal – for example the Victorian Civil and Administrative Tribunal (VCAT) – will make an order appointing a guardian on their behalf.

What should I consider when appointing an attorney?

When appointing an Enduring Power of Attorney, there are a few things you will need to consider.

You can specify when and how your attorney can act for certain decisions – be as specific as you want. Consider when you want them to start managing your affairs: will it be before you lose mental capacity, or after? And will it be only for some decisions, or all of them?

Who should I appoint as my EPOA?: The most important thing you will need to consider is who will be the most appropriate person to make decisions on your behalf. Your designated attorney can be an adult family member or friend, or someone else that you trust. You can appoint one or two attorneys to act jointly or severally – and a back-up or alternative attorney, if your first choice is unable or unwilling to act.

When will the EPOA start?: When appointing an EPOA, you will also need to consider at what point the attorney can begin making decisions on your behalf: Will they come into effect immediately? Or in the event you lose capacity?

Do I Lose the ability to make my own decisions?: Appointing an attorney does not mean that you will lose control over your finances – it simply allows someone else to manage your finances according to your instructions. Your Enduring Power of Attorney can be cancelled (revoked) at any time provided you have the capacity to do so.

Is an EPOA called something else?

All states will deal with legal and financial matters or decision-making under an Enduring Power of Attorney. However, personal and medical decisions will be dealt with differently depending on which state you reside in.

• In Victoria, legal, financial and personal decisions are made under an EPOA. However, medical decisions come under Appointment of Medical Decision Maker (AMDM). Read our Melbourne estate planning guide for more information on other estate planning matters.
• In NSW, personal and medical decisions are made under the appointment of an Enduring Guardian. Read our Sydney estate planning guide for more information on other estate planning matters.
• In Queensland, all decisions (legal, financial, personal and medical) are made under an EPOA. Read our Brisbane estate planning guide for more information on other estate planning matters.
• In South Australia, legal and financial decisions are made under an EPOA. However, personal and medical decisions are made under an Advance Care Directive.
• In Tasmania, legal and financial decisions are made under an EPOA. However, personal and medical decisions are made under an Enduring Guardianship.
• In the ACT, all decisions (legal, financial, personal and medical) are made under an EPOA.
• In Western Australia, legal and financial decisions are made under an EPOA. However, personal and medical decisions are made under an Enduring Power of Guardianship.

Who needs to sign an Enduring Power of Attorney document?

Before it can become a legally binding document, the Enduring Power of Attorney document must be signed by two witnesses. One must be an independent authorised witness, such as a Justice of the Peace, lawyer, doctor, nurse, pharmacist, teacher or public servant. The second witness can be anyone aged 18 years or over.

It’s important to note that a witness for the EPOA document cannot be a relative, your carer or the person being appointed as your attorney.

Do I need to register my Enduring Power of Attorney?

In Victoria, there is no need to register an Enduring Power of Attorney. However, in some states, an EPOA will need to be registered under some circumstances. For example, if there are any property transactions in progress, an EPOA will often need to be registered with the Land Titles Office in that state.

Regardless of registration, the common approach is to make your Next of Kin and family aware that the attorney has been appointed and store the signed document in a safe place. If you are storing the document with your Will, be sure not to staple it or attach it to the Will document in any way, otherwise it can invalidate your Will.

3. Advance Care Directive

An Advance Care Directive (ACD) is a formalised version of your advanced healthcare plan. It is a legal estate planning document allowing you to outline your wishes and preferences when it comes to future medical care and end-of-life treatment. It can contain all your needs, values and preferences for your future care and details of a nominated medical treatment decision maker.

An Advance Care Directive is a tool used by your medical treatment decision maker to guide them through any decision making if they are acting on your behalf when you can no longer make decisions yourself. It can be useful to have one in place if you become unwell later on, or lose the ability to make medical decisions yourself.

When correctly prepared and executed, this legal document will take precedence over other estate documents.

While health care directives differ slightly between states and territories, they outline an individual’s wishes for their future medical treatment in circumstances where they are unable to provide their consent.

When should I make an Advance Care Directive?

You should make an Advance Care Directive if you have an ongoing medical condition; have an upcoming medical procedure or surgery; or if you are elderly or nearing your end of life.

Anyone aged 18 years or over can make a health directive at any time as long as they have ‘full legal capacity’ to do so.

What should I include in an Advance Care Directive?

When making an Advance Care Directive, there are a few things you will need to consider:

• Details of what is important to you: including values and preferred outcomes; and
• The treatments and care you would like or would refuse if you have a life-threatening illness or injury.

Do I lose the ability to make my own decisions?

Making an Advance Care Directive does not mean that you will lose control over your medical decision making. It simply informs others of your end-of-life wishes, including medical decisions, in the event that you can’t communicate these for yourself later on.

Is an Advance Care Directive called something else?

An Advance Care Directive is sometimes also known as a Living Will. The directive is called different things in each state. In addition, the decision making aspect is dealt with slightly differently depending on which state you reside in:

• An Advance Care Directive exists in Victoria, NSW, South Australia and Tasmania.
• An Advance Health Directive exists in Queensland and Western Australia.
• A Health Direction exists in the ACT.

In most states, an advance health directive will deal with your medical preferences only. Most commonly, it will not give the ability for someone to make medical decisions on your behalf.

For example, in Victoria, medical decisions come under an Appointment of Medical Decision Maker (AMDM). However, if both an Advance Care Directive and an Appointment of Medical Decision Maker are in place, the medical decision maker is then bound by the directive.

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4. Appointment of Medical Decision Maker

An Appointment of Medical Decision Maker (AMDM) is a legally binding authorisation allowing you to formally appoint a person to make medical treatment decisions on your behalf, if you become unable to make the decision for yourself. It can be useful to have an AMDM in place if you become unwell later on, or lose the ability to make medical decisions yourself.

Can I make an Appointment of Medical Decision Maker any time?

Anyone aged 18 years or over can make an Appointment of Medical Decision Maker at any time as long as they have ‘full legal capacity’ to do so. In other words, they must know and understand what’s involved with appointing one and the implications of their decision.

What should I consider when appointing a medical decision maker?

When appointing a medical decision maker, there are a few things you will need to consider.

Firstly, consider who you wish to appoint as your medical decision maker.

Will you appoint one, or a number of decision makers? You can appoint more than one person, but only one person acts at any one time. The other people you may appoint will act as alternate decision makers, if your first choice is unable or unwilling to act.

Some states also allow the appointment of joint decision makers, where more than one person would share the role of the decision maker.

Who should I appoint as my medical decision maker?

The most important thing you will need to consider is who will be the most appropriate person to make decisions on your behalf. Consider someone you trust, who will respect your values and preferences.

Your designated medical-decision maker can be an adult family member or friend, or someone else that you trust.

When will the medical decision maker start making decisions on my behalf?

If you are unable to make a medical treatment decision, your medical decision maker can consent to commencement, or continuation, of treatment. They can also refuse treatment on your behalf.

The medical treatment decision maker must make the decision they reasonably believe is the choice you would have made if they were able.

What is a health practitioner’s involvement with an AMDM?

A health practitioner can disclose health information about the patient to their medical treatment decision maker where it is relevant to a medical treatment decision they will make. Health practitioners may also offer advice to medical decision makers.

However, in Victoria, an Advance Care Directive may be in place without an AMDM. Therefore a health practitioner’s involvement with a medical decision maker would generally be higher than in other states.

Do I lose the ability to make my own decisions?

Appointing an attorney does not mean that you will lose control over your medical decision making. It simply allows someone else to make medical decisions on your behalf if you are incapable of doing so for yourself. Your Appointment of Medical Decision Maker can be cancelled (revoked) at any time provided you have the capacity to do so.

Is an AMDM called something else?

Medical decision making is dealt with slightly differently depending on which state you reside in.

• In Victoria, medical decisions come under an Appointment of Medical Decision Maker (AMDM). Read our Melbourne estate planning guide for more information on other estate planning matters.
• In NSW, personal and medical decisions are made under the appointment of an Enduring Guardian. Read our Sydney estate planning guide for more information on other estate planning matters.
• In Queensland, all decisions (legal, financial, personal and medical) are made under an Enduring Power of Attorney. Read our Brisbane estate planning guide for more information on other estate planning matters.
• In South Australia, personal and medical decisions are made under an Advance Care Directive.
• In Tasmania, personal and medical decisions are made under an Enduring Guardianship.
• In the ACT, all decisions (legal, financial, personal and medical) are made under an Enduring Power of Attorney.
• In Western Australia, personal and medical decisions are made under an Enduring Power of Guardianship.

Who needs to sign an AMDM document?

Before it can become a legally binding document, the Appointment of Medical Decision Maker document must be signed by two witnesses. One must be an independent authorised witness, such as a Justice of the Peace, lawyer, doctor, nurse, pharmacist, teacher or public servant. The second witness can be anyone aged 18 years or over.

Do I need to register my medical decision maker?

Your Appointment of Medical Decision Maker form doesn’t need to be registered anywhere. However, the signed AMDM document and an Advance Care Directive (if one exists) can be uploaded to your MyHealth Record. Is recommended that copies are given to your appointed medical decision maker and relevant health practitioners or health services.

Make your Next of Kin and family aware that the medical decision maker has been appointed and store the signed document in a safe and accessible place. If you are storing the document with your Will, be sure not to staple it or attach it to the Will document in any way, otherwise it can invalidate your Will.

5. Statement of Wishes

A Statement of Wishes (SOW) is a morally binding statement that expresses your views and wishes. It’s an informal document that accompanies your Last Will & Testament, assisting your executors and loved ones by providing a greater understanding of your wishes.

This document will be particularly useful for the executor of your Will and family members administering your estate after your death, when you are no longer around for them to ask for context. For example, if someone has been left out of your Will, a Statement of Wishes may give some background about why. This may include the nature of the relationship (or lack thereof) between you and the person being left out.

A Statement of Wishes is only an express wish. It is not legally binding and will not revoke or change the provisions of your Will.

What should I include in a Statement of Wishes?

A Statement of Wishes may include matters such as:

• Unexpected decisions made under a Will (leaving someone out or leaving particular gifts to people);
• Instructions about care for young children or dependents;
• Instructions about the way personal items should be divided (if not already dealt with in the Will);
• Instructions about where important documents are located (certificate of title for property, Will, prepaid funeral documents, insurance documents);
• A record of digital assets (social media accounts; banking and finance accounts, including newer apps such as Raiz; email accounts, etc).

Do I need to register my Statement of Wishes?

Your Statement of Wishes doesn’t need to be registered anywhere. However, it is recommended that the document is kept with your Last Will & Testament and stored in a safe and accessible place. It’s also a good idea to give a copy to your Executor or Next of Kin, or at least let them know that it exists.

If you are storing the document with your Will, be sure not to staple it or attach it to the Will document in any way, otherwise it can invalidate your Will.

Estate planning made simple

For years, lawyers have made things harder - and more expensive - than they needed to be. At Bare, our team of estate specialists offer probate and estate administration services to suit your needs.

To learn more, visit the Bare Law Estate services page‍ or chat with our estate team for a free consultation, on 1800 343 119.

This article is not legal advice. You should chat with a legal professional for specific advice on your personal or financial situation.