As the echoes of the holiday cheer fade away, and the calendar flips to 2024, the arrival of the new year brings a flurry of resolutions and fresh beginnings. In the hustle and bustle of the year already off to a brisk start, it’s easy to get swept up in the momentum of life’s demands. However, amidst this chaos, there lies a crucial yet overlooked goal that’s deserving of our attention: your estate plan.
Your estate plan is a roadmap for the future, ensuring that your loved ones are provided for. As we navigate through a busy 2024, taking a moment to assess and update your estate plan becomes a powerful way to safeguard your legacy and secure a foundation for the uncertainties that lie ahead.
What makes a good estate plan?
A well-crafted estate plan ensures that your assets are protected and your needs met during your lifetime and, once you have died. An estate plan can include the following elements:
A Will. This stands as one of the most recognizable features of estate planning, and rightfully so given its substantial role. A will empowers you to decide how you would like your assets distributed on your death and who you would like to appoint to carry out the administration of your estate.
Everyone who has savings or other assets with a value of over $15,000 should have a will.
It’s common to put off the need for a will, but if you want a say in the distribution of your possessions, then a well-crafted will protects the well-being of those left behind.
Enduring Powers of Attorney (EPA).
An EPA allows you to appoint a trusted individual (known as an “attorney”) to represent you in decision making if you are incapable of making decisions for yourself due to mental incapacity.
There are two types of EPAs:
- property: making financial decisions, including managing funds, property transactions, bills, and other financial matters
- personal care and welfare: decisions related to health and overall wellbeing
Getting EPA’s in place is proactive and wise, ensuring the seamless and preferred management of your affairs in circumstances where you are not able to look after yourself. Without EPA’s in place, your family or close friends would need to apply to the Family Court for an order to manage your financial affairs or to make decisions about your care and welfare. This is a time consuming and far more expensive exercise than simply making EPA’s.
Trusts.
These prove invaluable for those seeking to safeguard their assets and ensure ongoing benefits for their family for years to come. Unlike a will which establishes the distribution of your estate upon passing, a family trust establishes legal ownership of assets from the moment of its creation.
A family trust comprises of three essential components:
- trustees: the individuals who manage the trust
- settlor: the person who initiates the trust.
- beneficiaries: those who stand to benefit from the trust.
A trust deed, a legally binding document, outlines these three roles, as well as the instructions on how the trust is to be administered. The benefits of a family trust offer protection against risks associated with business uncertainties, or it can serve to allocate funds for the welfare and benefit of children and grandchildren, as well as the passing down of properties to younger generations.
A family trust may not be necessary or appropriate for everyone so it’s important to seek personalised legal advice.
If you have any questions about these matters, or would like to discuss your situation, please contact our friendly team at Dawsons Lawyers.
Claire Endean – Director/Lawyer | dawsonslawyers.co.nz | 09 272 0002
