Estate Planning Guide – NSW
Get your affairs in order! (NSW)
Life’s biggest question – what happens after you die? We don’t mean the after-life, but what happens to your property, cash, superannuation and other assets? You may have heard of ‘estate planning’. This 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.
With that in mind, there are x3 things everyone should have in place – particularly those entering retirement and the golden years. They are a –
- Advanced care directive or end of life preferences
- Alternative decision makers – for health, lifestyle and financial decisions
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. Avoid unnecessary confusion, fees, delays and family feuds – get a will!
Your will can be scribbled on a McDonalds 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! We have prepared a free basic will template here. You can also get a free will kit from most newsagents or get a lawyer to write you one if your situation is complicated.
- Find x2 people to witness you sign – 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 prepaying.
- 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 like NSW Trustees & Guardians.
Life changes! Update your will if you get married, divorced, have children or change your feelings about Cousin Rob.
End of life preferences
Unlike other states, NSW does not have a specific ‘advanced health directive’ form. Instead, you can simply express your wishes verbally to your decision maker or family or write them down. No need for any witnesses. You can find a template here . Whilst it is legally enforceable, ultimately, in NSW, much more emphasis will be placed on the instructions of your appointed decision maker.
Health & 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).
In NSW, you can appoint an Enduring Guardian to make decisions for you about accommodation, health and services if you become unable to make your own decisions later on. An Enduring Guardian cannot make decisions about your money or assets – this requires an Enduring Power of Attorney (see below).
An Enduring Guardian can make decisions in the areas you choose, but most commonly include:
- health care
- medical/dental consent
They cannot make or alter your will or make decisions against the law (e.g. euthanasia). Your Enduring Guardian 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.
To appoint an Enduring Guardian, complete this form. You will need an eligible witness (e.g. lawyer, court registrar etc). You can appoint more than one person with different functions. Note – if you get married, in NSW your Enduring Guardian is automatically cancelled! Unless you get hitched to your Enduring Guardian of course.
If you don’t appoint an Enduring Guardian, 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.
Financial Decision Maker
In NSW, 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 (POA) 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 POA.
Making a POA 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 POA can be cancelled (revoked) at any time provided you have the capacity to do so.
A POA or EPOA does not give someone the right to make decisions about your health, medical treatment or welfare. These decisions are covered by Enduring Guardianship (see above).
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. This is called an “enduring” power of attorney (EPOA).
A POA can be witnessed by anyone over 18 years old but an EPOA must be signed and witnessed by a lawyer, court registrar or NSW Trustee & Guardian.
Your will, AHD and EPOA 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!
This article is not legal advice. You should chat to your lawyer or accountant for specific advice on your personal or financial situation.
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