The complete guide to Estate Planning in Australia.

It’s one of life’s biggest questions – what happens after you die? We don’t mean the after-life, but what happens to your property, cash, superannuation and other assets? 

You might have heard of estate planning. Estate planning is the process of making those end-of-life arrangements. It aims to give peace of mind to you and your loved ones by ensuring your assets are distributed as efficiently and quickly as possible when you pass away. And if you don’t have anything in place, it will be a stressful process for your beneficiaries to receive your assets. 

With that in mind, there are three things everyone should have completed – particularly those entering retirement and the golden years. They are:

• 1. Last Will & Testament
• 2. Advance Care Directive or end of life preferences document
• 3. Alternative decision-makers – for health, lifestyle and financial decisions.

Estate Planning can help everyone, but particularly older people get prepared and reduce the stress and burden on their loved ones when the time comes.

1. Last Will & Testament.

A Will is a legally binding document that explains how you wish your property and assets to be distributed when you die. 

If you die without one (or an invalid Will), this is called ‘dying intestate’. In this case, certain laws apply and your assets will be distributed by default to your family – but perhaps not in accordance with your wishes or preferred allocation. It also can make the whole process more expensive and time consuming. Avoid unnecessary confusion, fees, delays and family feuds and write your Will!

Your Will can be scribbled on a McDonald’s napkin or handmade Japanese ganpi and laminated – it just needs to be in writing and signed by you and two witnesses. How do you get started?

• Take stock of your assets. Think about how you want your property, superannuation, cash, trusts and personal possessions to be distributed when you pass away.
• Write it down and make a Will.
• Find two people to witness you sign your Will – they must be over 18 years old, not a beneficiary under the Will and competent. Best practice – get together with your witnesses in the same room and use the same pen when you sign.
• If you are particularly ‘advanced in years’ or have a condition that may affect your mental capacity, it’s best to get a letter from your doctor confirming you are of ‘sane mind’ when making your Will. Avoid any possibility of a disgruntled family member challenging your sanity.
• Include details of your pre-paid funeral. We highly recommend prepaying your funeral to ensure you don’t pass on the financial and emotional burden to your family. Read more about the benefits of pre-planning your funeral.
• Pick a responsible person to be your executor. They will need to pay any debts and distribute your assets to the beneficiaries when the time comes. You can choose a friend or relative or appoint an independent trustee organisation.

Life changes! Update your Will if you get married, divorced, have children or go through any significant life changes.

2. Advance Care Directive or end of life preferences document.

As we get older, some of us may lose the ability to make decisions for ourselves, particularly concerning our health. An Advance Care Directive allows you to express your broader preferences and values for end of life and future medical treatment – like what ‘living well’ means to you, what treatments you would/wouldn’t like and any other preferences in terms of spiritual care or cultural beliefs when the time comes.

You can express your values in regards to medical treatment and organ, tissue and body donation through your Advance Care Directive. Outlining your wishes and preferences for medical treatments will guide your decision-maker when the time comes for them to make decisions on your behalf.

Depending on where you live, your state may have a different term for Advance Care Directive, which also may be slightly different in terms of what’s included.

• 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.

3. Alternative decision makers.

Health and lifestyle decision maker.

Everyone has the right to make their own decisions about where and how they live, including what medical treatment they wish to receive. Sometimes, an injury or illness can leave you unable to make those decisions yourself. It is a good idea to think about who you would like to make decisions on your behalf, if you lose “capacity” (i.e. your marbles or consciousness).

You can appoint a Medical Decision Maker to make decisions for you about accommodation, health and services if you become unable to make your own decisions later on. This person cannot make decisions about your money or assets – this requires an Enduring Power of Attorney (see below).  

A Medical Decision Maker can make decisions in the areas you choose, but most commonly include:

• Accommodation
• Health care
• Medical/dental consent

They cannot make or alter your Will or make decisions against the law (e.g. euthanasia). Your Medical Decision Maker can be an adult family member or friend or someone else that you trust. You can appoint one or more guardians to act jointly or severally – and a substitute guardian, if your first choice is unable or unwilling to act.

You can appoint more than one person with different functions. 

If you don’t appoint a Medical Decision Maker, the law determines a default decision-maker for you. It will be the first person in this list that you have a close relationship with:

• Spouse or domestic partner.
• Unpaid carer.
• A relative or friend who you have frequent personal contact with and has a personal (unpaid) interest in your welfare.

Health and lifestyle decisions are very personal and even the closest friends and relatives can disagree on the ‘best’ decision. Help avoid any ambiguity by making your wishes clear and nominating your preferred decision-maker.

A  Medical Decision Maker may have different names across Australia. 

• 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.

Financial decision-maker: Power of Attorney.

You can also appoint someone to manage your financial, legal or property affairs (e.g. paying bills, making investments, purchasing property etc). A Power of Attorney allows someone to sign legally binding documents on your behalf. 

This is handy if you are travelling overseas and need someone to access your bank accounts to pay your bills or manage your finances. It can also be useful to have a Power of Attorney if you become unwell or lose the ability to make decisions or manage your financial affairs yourself. This is called an Enduring Power of Attorney.

Making a Power of 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 Power of Attorney can be cancelled (revoked) at any time provided you have the capacity to do so.

A Power of Attorney or Enduring Power of Attorney does not give someone the right to make decisions about your health, medical treatment or welfare. These decisions are covered by Medical Decision Makership. However, in Queensland and the ACT, an Enduring Power of Attorney has the power to make all legal, financial, personal and medical decisions.

Your designated attorney can be an adult family member or friend or someone else that you trust. You can appoint one or more attorneys to act jointly or severally – and a back-up or alternative attorney, if your first choice is unable or unwilling to act.

You can specify when and how your attorney can act for certain decisions – be as specific as you want. You can also choose for them to start managing your affairs even before you lose mental capacity – or only for some decisions.

A Power of Attorney can be witnessed by anyone over 18 years old but that person must be someone authorised by law to witness affidavits, such as a lawyer or court registrar.

A Power of Attorney may have different responsibilities across Australia.

• In Victoria, legal, financial and personal decisions are made under an Enduring Power of Attorney. However, medical decisions come under the Medical Decision Maker. 
• In NSW, financial and legal decisions are made under the appointment of an EPOA.
• In Queensland, all decisions (legal, financial, personal and medical) are made under an EPOA.
• In South Australia, legal and financial decisions are made under an EPOA. 
• 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. 

Estate planning: What now?

Your Will and Power of Attorney do not need to be lodged or submitted anywhere. Keep a copy in a safe place and give another to your appointed decision-maker, a trusted family member or lawyer/accountant. And get back to living!

To learn more, visit our Probate and Estate Services here or chat with our estate legal team for a free consultation, on 1800 343 119.

This article is not legal advice. You should speak with your solicitor or accountant for specific advice on your personal or financial situation.

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