My first-year Law School class was full of fresh-faced students. As an adult student, I felt far more prepared and experienced for what life has in store for us. Our Property Law professor introduced us to the topic by saying “if you don’t think you have anything of value, feel free to leave it all to me in your Will”.
As a great lecturer, well versed in property law, he understood what most of his students did not. Besides a wardrobe full of used clothes or an iPhone, we all have property rights beyond what we consider worthless.
That was the long way of saying yes, we all need sufficient and up to date Estate Planning.
What is an Estate Plan?
In Australia, at a high-level, Estate Planning consists of three key documents.
- Will: the primary purpose of your Will is to detail how you wish for your estate is to be distributed after you have passed away. The Will can include other instructions such as guardianship arrangement over under-age children or your funeral arrangement and organ donorship wishes.
- Enduring Power of Attorney: using the Enduring Power of Attorney, you grant another person the authority to handle your personal and financial decision making in the event of your death or mental incapacity.
- Advance Health Directive: also referred to as a Living Will, the Advance Health Directive is the legal means with which you give direction on your future health care. Like the Power of Attorney, in the Living Will, an individual is assigned the responsibility of making decisions in line with your health care wishes.
4 Reasons Why You Need an Estate Plan
There are generally three main reasons why people put together an estate plan: (1) taking care of loved ones, (2) avoiding unnecessary probate costs, or (3) protecting assets.
Taking Care of Loved Ones
No one wants to leave a mess for their family after they have passed. We all strive to make sure our spouses, children or grandchildren are not emotionally or financially adversely affected by our departure. You can protect minors by putting in place a comprehensive guardianship agreement, complete with financial backing, to empower your children into adulthood.
Australian property law allows for property held in multiple names, for example by spouses, to automatically transfers ownership to the living spouse.
Avoiding Unnecessary Probate Costs
Once a person has passed away, even if they have a complete Will and complete Estate Plan in place, a Probate will likely be required.
Probate is the legal process for the Supreme Court to validate the Will. Once complete, the Supreme Court will issue a ‘Grant of Probate’ which is the legal document confirming the authority of the executor and validity of their instructions. Financial institutions who hold the deceased’s assets will often require a copy of the Grant of Probate to release those assets.
If you do not have a Will in place, or if you have multiple different Wills at the time of your death, the application for a Probate can take considerably longer which of course comes hand-in-hand with hefty estate planning attorney costs.
Go to the bottom of this post to see a high-level overview of the Probate requirement for all Australian states.
More aligned to Financial Planning, complex asset structures need to be included and frequently reviewed as part of comprehensive estate planning. Family and discretionary trusts often set up to protect your assets and to protect your family from unanticipated lawsuits and taxes can add complexity to the distribution of those assets upon your passing.
To set up an estate or to ensure your complex arrangements are included, engage a qualified Estate Planning Attorney and Financial Advisor.
Don’t forget to include your digital assets in your estate planning.
Bonus: How Do I Apply for Probate?
To apply for probate in Queensland, you must advertise your intention to apply for probate to allow others to disagree with your right to obtain probate. You must also file several legal documents with the QLD Supreme Court.
New South Wales
In NSW, you will need to publish an online notice of your intention to apply for probate. After waiting a minimum of 14 days, you can file your probate application with the NSW Supreme Court.
In Victoria, you will need to declare your intention to apply for probate. After at least 14 days, you will need to complete the required documents and submit them to the VIC Supreme Court probate office.
To apply for a grant of probate in South Australia, you will need several documents:
- The original Will
- Death Certificate
- Details of assets and liabilities of the deceased person
- Credit card to pay the lodgement fee
You will then need to complete the application on the CourtSA website.
In Northern Australia, you will need to submit your application for probate to the NT Supreme Court.
The Supreme Court of WA has an online portal with which you can prepare your application. The application can take 3 to 6 weeks for processing.
Australian Capital Territory
A checklist for all the things you will need for probate is available on the ACT Supreme Court website.