Much has been made of panic buying as many Australians rush to protect their families from the perceived risk of dwindling supplies, whether that fear is reasonable or not.
But what about protecting your family financially? Economic risk is not the only issue being faced. What about managing your affairs during isolation or illness?
Government and businesses are implementing crisis management plans and the Smartraveller website recommends:
Now admittedly, that's rather stark. However, although these are difficult times, it does serve as a good reminder of the importance of having your own crisis management in place, and having an up-to-date estate plan is an essential component of that crisis management.
If you do not have an estate plan or you haven't reviewed it recently, then it's definitely time to deal with it. Urgently.
COVID-19
There are arguably more pressing issues than toilet paper and baked beans.
The rules regarding wills and enduring powers of attorney have not been relaxed, despite the challenging circumstances we are experiencing as COVID-19 becomes more wide-spread in our community. Unless documents are prepared and signed strictly in accordance with the law, your documents may not be valid. In the current environment where there is a strong possibility a significant percentage of our population may become self-isolated for a period of time, you may not be able to update your documents as you may not have access to suitable witnesses.
People may have seen recent examples of video wills or text messages being allowed by courts, but these often present more problems than they solve. A court application to confirm something is valid is far more expensive than getting it right in the first place. Relying on badly prepared documents, or no documents at all, is not a strategy, and to do so will not protect your family financially.
Review your will
When was the last time you looked at your will? Check your executors, guardians for minor children, any specific gifts and your beneficiaries.
Is your will enough? Is isolation going to increase existing family tensions? Have you had an advice on how to limit the prospect of challenges against the assets of your estate? If there is a risk your wishes won't be respected, it's important to remember that generally the only people who gain from families fighting are the lawyers dealing with the dispute.
Enduring powers of attorney
Are your attorneys appropriate and does your document deal with all the assets you own and also control? Does it deal with support of people other than the principal from the principal's assets – such as spouse and children? Does it deal with your superannuation interests and the potential for conflict transactions? We know from recent cases there is a focus on attorneys, undue influence and conflict transactions. The terms of your enduring documents should deal with these issues.
If you are concerned about how you might be treated if you are hospitalised, you may wish to consider implementing an advanced health directive. However these must be signed off by your General Practitioner, so sooner is better as their resources become stretched.
Superannuation
There were substantial changes to superannuation in 2017 and, particularly if you were already in pension phase, you'd be forgiven for not reviewing how your superannuation intertwines with your estate plan.
Review pension documents and binding death benefit nominations to ensure your superannuation is going to benefit your intended beneficiaries. A recent rise in disputes relating to the exercise of trustee discretion in the payment of death benefits from self-managed superannuation funds highlights the importance of reviewing death benefit planning.
Family trusts
Who will control the trust if you are temporarily or permanently incapacitated or die? Reviewing your family trust deed and any amendments is essential as assets held by a family trust do not form part of your estate and cannot be bequeathed under the terms your will. If there are large loan accounts to or from beneficiaries in the financial statements of the trust, your assets may not actually be going where you intend.
Property
Unless held in joint tenancy with another person, land registered in your personal name passes to your estate. Reviewing how your property is held is essential to ensure that it passes to your intended beneficiary. This may be done through your will, or through changes to how ownership of the property is registered.
Having an up-to-date estate plan in such difficult and uncertain times is essential to ensure your loved ones will be in the best position to deal with your incapacity or death whilst also minimising the risk of dispute, or expensive rectification action. Our team is experienced in these issues, has a history of having a flexible work environment and has all the technology available to conduct meetings remotely.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
