One of the key decisions that many people put off for another day is estate planning. With the COVID crisis having such a dramatic impact on all of our lives, Wills and Estate Specialist Ilana Kacev looks at the reasons why it’s so important to get your affairs in order now, and the key factors you need to consider.
Getting your estate planning in order is one of those resolutions that tends to stay on the ever growing to-do list. However, with the spread of Coronavirus globally, getting your affairs in order, particularly estate planning, makes the estate planning task far more relevant.
The sudden and unexpected spread of COVID-19 has made us all realise that circumstances which are out of our control can change so rapidly. We have seen people panic at supermarkets and stockpiling staple foods, toilet paper and hand-sanitiser.
It acts as a reminder of the significance of getting important tasks, including your estate planning, done before they become urgent or simply, futile.
The Estate Planning documents you may need
This is a document whereby you can appoint someone or multiple people to administer your assets upon your passing and nominate who will receive those assets.
If you do not have a Will, your estate would be distributed based on a statutory scheme of distribution (which can vary from state to state). This means someone who you may not have intended to administer and receive your assets could likely inherit them and step into the powerful role of an administrator.
2. Will-kit or online do-it-yourself Will?
There are various formalities in making a Will that need to be complied with in order for a document to be considered a valid Will. To the experienced lawyer, these formalities are basics, but to non-lawyers it could very well be a case of ‘you don’t know what you don’t know’ and one of these formalities could easily be missed.
Whilst a Will-kit may seem like the cheap and easy option at the time, the complications that it can cause when administering an estate and the costs to resolve these complications far outweigh the saving of a Will-kit. I have recently been involved in a matter where the will-maker wrote her own Will and only had one person witness it, instead of the required two witnesses. Further, the division of assets was ambiguous. The process of administering the estate has taken a year and a half and has cost the estate approximately five times the usual cost.
3. Enduring Powers of Attorney or Appointment of Medical Treatment Decision Maker
In the event that a person has become legally incapable of managing their affairs and therefore being unable to make legal, medical and personal decisions for themselves, they need to have at least one of two options in place. The first is an Enduring Power of Attorney. The second is Appointment of Medical Treatment Decision Maker appointing someone to make decisions on their behalf.
If they do not have either of these documents then this will create stress and delay in administering that person’s affairs while someone (who has an interest in their affairs) makes an application to the Victoria Civil and Administrative Tribunal (“VCAT”) for administration and guardianship orders.
Enduring Powers of Attorney can also be useful even when a person has capacity (soundness of mind). For example, if someone is stuck overseas or is in self-isolation, they may want the ability to have someone who can continue on their financial transactions while they are not physically around and available.
4. Ensuring your wishes are fulfilled
An Enduring Power of Attorney has a lot of utility, especially in unforeseen circumstances like we have experienced with self-isolation. It enables a person to act on your behalf in relation to your property and financial affairs now and if you ever lost capacity through unsoundness of mind.
The reasons to update your estate planning documents
You may already have Wills in place, however now is an important time to consider any updates because of the change in values of certain assets, particularly the stock market.
For example, if you have gifted some beneficiaries shares and others cash and/or property, the distributions may no longer be even or fair as a result of the pandemic.
This might necessitate some asset rebalancing or perhaps the inclusion of an adjustment clause in your Will based on the values of the assets at date of death.
6. Changes in priorities
The restrictions in Melbourne made typical life decisions so much more difficult. We have seen a rise in family disputes due to who may or may not have made it on to the list of those allowed to attend a funeral when restrictions provided that only a maximum of 10 people could attend. A year ago, a family would not necessarily need to turn their minds to this. But when faced with a crisis such as a pandemic, it has shown that these decisions can become complex, controversial and a source of dispute.
Grief can have all sorts of effects on people and can motivate them to challenge Wills if they feel mistreated. This again reinforces the reason why it is important to have the right people in charge of your estate and have appropriate estate planning documents in place to minimise the risk of such issues.
7. Holistic approach
At Tribeca our estate planning experts work with specialists like Ilana to ensure your affairs are in order and protected – something COVID has shown is too important to ignore.
If you would like to discuss your situation, you can click here for more details and to speak to one of our Tribe. You can also read one woman’s experience of what happens when your spouse passes suddenly, and doesn’t have a Will, here.
Ilana Kacev is Special Counsel with Russell Kennedy Lawyers. A Law Institute Wills & Estates Accredited Specialist, her well rounded experience spans all aspects of estate matters enabling her to provide clients with strategic and objective advice in relation to both estate planning and disputes. For any queries about your estate planning needs or advice regarding Probate or informal Wills, you can contact Ilana at firstname.lastname@example.org or 03 8640 2370 for further advice.