by Brian Herd, Lead Legal Professional, Heather Hill Pathways.
When faced with complex life issues, many of us will respond by simply avoiding the problem preferring to leave our lives to luck, fate or the whims of other people to resolve it. This avoidance or doing nothing response has two consequences – you lose control over the solution and the solution is almost invariably more expensive than it might have been if you grasped the nettle and did something early on. Below are the three documents that we strongly recommend absolutely everyone over the age of 50 have in place.
1) Enduring Power of Attorney
An enduring power of attorney (EPoA) is a legal document that authorises another person/s to make financial, personal or health decisions for you should you lose your capacity to do so. Not having one means that these decisions could be made by someone you don’t know. It is a vital tool for personal risk management and will give you the confidence that those you appoint, the people you know and trust, will do the right thing for you should the need occur.
2) Advance Health Directive
An Advance Health Directive (also known as a Living Will) is a legal document that sets out the health care decisions you want others to make for you should you ever lose the capacity to make those decisions yourself. You can give directions in advance, for example, about whether you do, or do not want, life sustaining measures if those decisions have to be made. Importantly, the document will only ever come into effect if you are no longer able to make your own decisions.
The main benefit in having an Advance Health Directive is that it ensures your wishes with respect to your health care and quality of life are respected and enforced. It can however, also prevent disputes in your family about what you would or would not want to happen and gives your family, friends and loved ones much needed peace of mind when it comes to them having to make decisions about your health care, particularly with respect to end of life decisions. It is another vital personal risk management tool for your life.
A will is a legal document that essentially appoints a person/s to manage your estate (the Executor/s) and distributes your property to those you want to give it to (Beneficiaries) when you die. If you don’t have a Will (or it can’t be found) you will die intestate, which means that your property will go to the people the law prescribes should get it and not who you want to get it.
This could mean that people you most want to benefit from your estate might not get anything at all. It may also take longer and cost more to administer your estate without a will. Common reasons for having a will include:
Whilst the making of a Will can just be one step in ensuring the smooth transition of your wealth when you die. You also needs to give separate attention to what happens with your superannuation, the control of any family trusts or companies, and life insurance benefits when you die. Need we say it again, Wills are vital tools in your personal risk management and family planning.