Basic Rules for Estate Planning and Wills for Families

Basic Rules for Modern Estate Planning & Wills for Families

Don’t know where to start?
Here are some basic guidelines to follow when getting your Family's Estate Planning and Wills sorted.

Over time, most people will have amassed a significant list of valuable assets during their lives, but when they are first starting out, they may use a Life Insurance policy to create an immediate inheritance available now, until their assets increase in value later.


Get your Power of Attorney sorted first

The beginning of all good Estate Planning starts with understanding why everyone needs a Power of Attorney document so you have somebody legally authorised to make financial decisions for you if you're unable to because of a sickness, injury, or absence.


Power of Enduring Guardianship sorted next

While this document's name is slightly different in each Australian state, the intention is the same - to legally appoint somebody authorised to make health and lifestyle decisions for you, if you're ever unable to because you lose mental capacity. While there is a legal hierarchy of who medical staff must consult first to make life-saving decisions about you, you may not wish to give away that power to someone you would not choose yourself. Choose and legally nominate your own ‘Responsible Person’ with a Power of Enduring Guardianship document.


Know who you want to leave your assets to upon your passing

Think about your long term picture. Do you have dependent children? Are your children now adults with their own families? Is your family more a family of choice than a biological one? Do you wish to leave your assets only to a handful of specific people and restrict who can make a claim on your Will?


Know who you do not want to leave your assets to upon your passing

Do you suspect certain people may contest your wishes in your Will? Do something proactive about that and make sure you include a ‘Considered Person Clause’ in your Will to help identify and exclude them. Take action today. Remember only Estate-Assets are transferred via a Will, so learn about Non-Estate Assets.


Is it possible future beneficiaries of your Will may face Divorce, Bankruptcy or Addictions?

Looking into the future and covering all possibilities is impossible, but we can use a Protective Will to address the top 5 risks that future beneficiaries and their families may face - the need for protection for Bankruptcy, Divorce, Addictions, Superannuation Proceeds, and Vulnerable Beneficiary Maintenance Trusts. There are clearly some life events that may unexpectedly affect us all later which could interfere with receiving and keeping a future inheritance. Take action today through your Will to safeguard any future inheritance.


Appoint Guardians for your children under 18, just in case

Possible future Guardians for Children can be nominated in your Will. While such nominations if ever needed must ultimately be approved by the Family Court, your legal nomination of them in your Will now has significant sway with the court's final decision later.


Make sure you fund potential future guardians to care for your children adequately

If you have children or frail-aged parents that require looking after in the event you unexpectedly pass away, make sure you leave sufficient funds (or leave a dedicated life insurance policy for this purpose alone) to fund the care and provision of the vulnerable people in your life.


Insist upon safe storage of Wills & Legal Documents in a Safe Document Service - No exceptions

Make it known to your family and Wills Executor all your original Key Legal Documents are securely stored and held in trust in a dedicated legal document storage facility and that access will require 100 points of ID and a death certificate. Remove any question of lost Wills or assertions of ‘possible tampering with a legal document’.

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Protective Wills – and when you might use them

There are many reasons why you would consider creating a Protective 3-Generation Testamentary Trust Will. We work with two main types of Wills: Protective 3-Generation Testamentary Trust Wills and Simple Non-tax effective Wills. We refer to them as either Protective or Simple as they each provide varying levels of protection to the beneficiaries of your Will.

If you have the budget, it's always better to have a Protective 3-Generation Testamentary Trust Will because it contains 5 Advanced protective measures for your Wills beneficiaries.

  1. 3–Generation Testamentary Trusts – reduces CGT, income tax & transfer (stamp) duty
  2. Super Testamentary Trust – reduces the 17% or 32% tax on Super going to adult children
  3. Bankruptcy Trusts – helps to shield inheritance assets if a beneficiary is bankrupt
  4. Divorce Protection Trust – helps shield inheritance assets if an adult child separates
  5. Maintenance Trust – where beneficiaries are under 18 years of age or unstable

A Protective Will provides the Will Maker with much more in-depth ways to distribute their estate. (This is why the Protective Will document is usually 40+ pages).

If your family home, superannuation, life insurance and other assets, when combined are over $1m in value then you clearly need a Protective 3-Generation Testamentary Trust Will. However, if your assets are under $1m then the benefits, while still there, are not as significant.

When might you need a Protective Will?

There are many reasons people choose a high level of protection for their testamentary decisions but the most common are related to beneficiary protection and asset protection.

  • If you want to protect your Wills nominated beneficiaries from the financial risks of relationship breakdown, divorce, bankruptcy, addictions or unstable or vulnerable situations, and/or
  • If your family home, superannuation, life insurance, and other assets, when combined are over $1 million in value

Pro Tip: As your circumstances change over time, you can always modify and upgrade your Will.

Happy leaving your money to the government?

Every year, Australian tax payers voluntarily pay the Tax Office millions of dollars in “Death Taxes”. Capital Gains Tax earns the Australian Federal Government more money on deceased estates in a single year than in the cumulative history of death duties. Are you going to be one of them? Proper Estate Planning ensures that your estate goes to those you care about, and not the Tax Man.

Looking ahead


How it connects to your other key Estate Planning documents

Modern Estate Planning involves three key decisions that are separately documented in three key legal documents:

Important: All three legal documents have specific powers that can only come into affect during different periods of your life. 

  1. A General Power of Attorney is active only while you have your mental capacity.
  2. Enduring Power of Attorney only comes into force when you have lost your mental capacity, and another person needs to make medical and lifestyle decisions for you.
  3. A Will only comes into effect after you have passed away. (Your authority under your Power of Attorney and Power of Guardianship have ceased at this point in time).

This is why it's important to have all three key legal documents in force, so if there are ever unexpected changes to your personal situation that need the legal assistance of another, you have the 3 required documents in place that reflect your own decisions made and activated ahead of time.

Legally speaking: Mental Capacity is an important legal term.

In making an estate planning document, a person must have the mental capacity to know what they are doing. They must know, by their actions, they are making documents that provide their nominated Attorney authority to make important decisions for them why they are alive, and the Executor of their Will, power to distribute their property after death.

What is Secure Document Storage for Estate Planning & Wills?

Permanent (new) document storage available for Sapience Financial clients

Lifetime storage of the physical signed (executed) copies of your Will and POA documents purchased through Sapience Financial is now available to Sapience Financial Clients.

  • Your estate planning documents are physically stored with a National Safe Custody Register and your name and address details are added to their database.
  • Your documents are allocated a unique number and stored in a separate secure envelope.
  • The service will confirm in writing to you when the original signed versions are received and secured by them, and with your permission, a scanned copy can be sent to us for local electronic storage in your Secured Sapience Customer Portal. This can be made available to you via a mobile device app with 2-factor authentication 24/7.

This is a lifetime service where every 5 years the Storage Service will confirm your Executors details for any changes.

Why is Secure Storage included in my Estate Planning process?

Document Authenticity – With your drafted legal documents, you will receive a cover letter signed by the law firm that created your estate planning documents confirming:

  • these are drafted by an Australian law firm and valid in all Australian states and territories,
  • that the legal advice was provided by a law firm with Client Attorney Privilege and a law firm's Legal Professional Insurance.

Physical Protection – By having the physical signed copies of these documents secured with a National Safe Custody Register, you remove any suggestion of document tampering, document switching or lost legal documents. With secured document storage, you will receive a letter signed by the law firm securing the physical documents confirming:

  • your physical documents are securely stored for life and the filing reference number,
  • outlining the document access process for your future Executors to follow to access these documents when needed

This service also monitors the national newspaper obituaries to cross reference when a call on the documents may be anticipated. This is a complimentary service and clients are not obliged to use it.

How we can help

Building a Will, either Protective or Simple, is an important part of protecting your loved ones and bringing peace of mind that you have an important final piece of your Ultimate Backup Plan in place, just in case.

Contact us for a confidential chat about your needs.

Related: Types of Personal Estate Planning documents we work with

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