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5 Benefits of Engaging An Estate Planning Lawyer

The power of a good estate planning lawyer is often underestimated when people are considering what will happen to their assets when they pass away. For many, the discussion regarding what should happen to their estates on their death is one that is often put on the back burner or is often not considered at all.

A good estate planning lawyer takes both the stress and complexity out of the estate planning process and considers the specific needs of each client when drafting a Will, Power of Attorney, or other estate planning document. In this article we give you the 5 key benefits of engaging an estate planning lawyer for your estate planning.

Benefit 1 – Attempting to cut costs in the short term will cost you more in the long term

In a saturated market that advertises online Will services at too good to be true prices and where home Will kits are readily available, it is easy to fall into the trap of opting for the generic option. The problem with prioritizing cost when it comes to your estate planning, is that quality is often not guaranteed.

In order for a Will to be valid and effective in Queensland, there are certain formalities and inclusions that must be contained in the document. The Will:

  1. Must be in writing.
  2. Needs to be signed by the Will-maker in the presence of two witnesses (who are not mentioned in the Will).
  3. Needs to appoint an executor, being the person who oversees and actions the administration of the Will-maker’s estate.
  4. Needs to provide who will be the beneficiaries of the Will-maker’s estate, as well as identify sufficiently what assets are in the Will-maker’s estate that can be gifted in the Will.

It is often the case that deficiencies in Wills (like those listed above) are not identified until the Will-maker is deceased or has lost capacity, and it is then too late for the Will to be changed and rectified. The impact of this is that your executor (if there is 1 appointed) is left with a Will that is either invalid or ineffective, with this either causing disputes (resulting in costly litigation to attempt to resolve the dispute, which is more often than not paid from the estate) or requiring a Court order (with the costs being paid from the estate) to rectify or give clarity to the clauses of the Will.

In Wills involving complex structures such as companies and trusts, it is common to see Wills that have been prepared by estate planning lawyers unfamiliar with such entities or that are prepared using kits, that purport to gift assets owned by the companies and trusts instead of the control and/or shares of and in such companies and trusts, resulting in the gifts being ineffective and invalid.

Another common misconception that a computer service or Will kit will not correct you on is the belief that superannuation is an asset of your estate that is capable of being gifted under your Will. Superannuation is separate from your estate and is gifted by way of a Binding Death Benefit Nomination (which can lapse every 3 years). If a Nomination is not in place, then the trustee of the superannuation fund has the discretion as to who to pay your superannuation entitlements to, a process that again can be both costly if there are disputes and lengthy.

A good estate planning lawyer will obtain details of all assets owned and liabilities owed in your personal name, as well as details of your involvement in companies and trusts and the net position of such companies and trusts, and will use this information to advise you on how to leave these assets (dependent on your wishes) and will contemplate bespoke items such as loan accounts, unpaid present entitlements and liabilities for any companies and trusts. As part of this discussion, a good estate planning lawyer will also discuss your superannuation with you and assist in updating your Nomination to your super fund if required.

A good estate planning lawyer may come at a higher upfront cost but spending the money to get a set of documents that are effective in recording and achieving your wishes will save your executor thousands in the long run.

Benefit 2 – Advice on asset protection

Every individual has different needs and different family dynamics that may impact the way that a person structures their estate planning. It is the role of a good estate planning lawyer to not only be able to draft a Will or estate planning document that is legally effective, but that also contemplates these family considerations and creates a document that assists in ensuring each family member is taken care of and that disputes (where possible) are avoided.

Some examples of the dynamics that a good estate planning lawyer should identify, and address are:

  1. If there is a family member (such as a child) that is not equipped to handle a potentially large inheritance or that is otherwise not wanting to hold any assets in their own personal name, considering whether a testamentary trust should be set up in your Will to quarantine and hold these assets with a third-party trustee to be appointed.
  2. The equalisation of the gifting of an estate (if equalisation is the intention) where there are companies or trusts involved that carry large liabilities that may result in the gifting of what looks like an asset rich company being disadvantageous given its liabilities. This may include looking at what other assets outside such companies or trusts that can be gifted to equalise that beneficiary’s share.
  3. If there is contention between beneficiaries, whether other estate planning documents such as a Statement of Wishes (which explains the bequests made under a Will) should be drafted so that the gifting of the estate can be explained in the words of the Will-maker after the Will-maker’s death. This could also include, for assets held in trusts and by an individual trustee, a Statement of Wishes for how the Will-maker would want the Trust assets dealt with and may include a mechanism to deal with any disputes between the beneficiaries.

The skill and experience of a good estate planning lawyer, especially when dealing with estate planning that involves complex structures or complicated family relationships, can be invaluable. A good estate planning lawyer will be able to remove themselves from the emotions and provide practical advice and options for how you should structure the gifts made under your Will and if there are any other documents that should be utilised to ironclad your estate planning.

Benefit 3 – Strategic advice

As well as providing advice on asset protection, a good estate planning lawyer should also be able to provide you with strategic advice with respect to your estate planning in relation to your specific assets and current situation.

The specific strategic advice that a good estate planning lawyer can give does not only include the technical advice that the lawyer themselves will give, but also the lawyer’s ability to also collaborate with your financial planner, accountant, and other trusted advisors to:

  1. Understand what you want to do with your estate planning.
  2. Understand your assets and involvement in companies and trusts.
  3. Work with all advisors to craft a Will that properly deals with such assets but does not trigger any consequences (whether this be tax related or otherwise) and that also works (for example, collaborating with your advisors to ensure the proposed gifting of assets such as life insurance policy proceeds can be done).

The strength of a good estate planning lawyer is their ability to recognise the power of your other advisors and to work with them to provide the best strategic advice not only from a legal perspective, but from a practical perspective.

This strategic advice is what will ensure that the Will as drafted will operate as intended when trigged upon death.

Benefit 4 – Estate planning is more than just a will

When most people think estate planning, their minds usually go to Wills. Whilst a Will is one of the most important estate planning documents that you can have in place, there are a whole suite of other documents that should also be considered and implemented as part of your estate planning.

We have already identified some of these documents throughout this article, but we summarise these and others as follows:

  1. Enduring Power of Attorney – a document under which you appoint a person (or persons) to act as your attorney to make decisions for either or both your financial and personal/health matters. This power can start immediately or upon your loss of capacity and can carry limitations or terms to your attorney’s powers that they must consider when making such decisions. An Enduring Power of Attorney is important to have in place in the event that you become incapacitated and cannot make your own decisions and is usually required to be in place for entry into most nursing homes.
  2. General Power of Attorney – being different from an Enduring Power of Attorney, a General Power of Attorney is more commonly used when appointing an attorney to act on behalf of a company. General Powers of Attorney are particularly useful when you are a sole director of a company and wish to appoint a person to make decisions for a period of time when you cannot. A General Power of Attorney ceases to be effective once the person or entity who has made the document has either lost capacity or has been dissolved.
  3. Advance Health Directive – is a document in which you can record your specific wishes as to your healthcare should you be unable to vocalise such wishes yourself. The document asks specific questions such as what medication or resuscitation you would or would not want to receive and is often used in conjunction with your Enduring Power of Attorney, with your attorney for personal/health matters being guided by the wishes recorded in your Advance Health Directive.
  4. Trust Variation Documents – if you are involved in any trusts, documents may need to be drafted to record any amendments or variations to the trust deed to give effect to your estate planning wishes. This can include a Deed of Appointment whereby a successive controller of a trust is appointed.
  5. Binding Death Benefit Nomination – as mentioned above, a Binding Death Benefit Nomination is a key document to ensure your superannuation entitlements are paid to your intended beneficiary.
  6. Statement of Wishes – as also mentioned above, a Statement of Wishes is a handy document to record the rationale behind the gifting of your estate or to otherwise provide directions.

A good estate planning lawyer should in your initial appointment canvas all the documents that they consider need to be implemented as part of your estate planning. This will then ensure you are covered in the event of not only death, but if you have also lost capacity or otherwise cannot given instructions.

Benefit 5 – Peace of mind

The number 1 thing that a good estate planning lawyer can give to you is peace of mind. After you have finished your estate planning, you should feel a sense of reassurance that your wishes for your affairs have been adequately documented and give effect to what you are wanting to achieve.

You will be able to breathe a sigh of relief knowing that you have put in place the necessary documents that will save you and your family stress in the long run, as well as saving time and money.

What next?

At MacDonnells Law, our team understands that estate planning and the initial steps of making that appointment to discuss your affairs can be daunting. Let us guide you through the process and work together to put in place an estate plan that not only accords with your wishes, but which legally works.