Summary of Estate Documents

Very broadly speaking, the various estate documents can be categorised into two groups:

  • those that have effect during the life of the person; &

  • those that only have effect once the person has passed away.

Please note that as estate law differs between each State and Territory in Australia, the names of the estate documents vary between the States and Territories. However, as Acumen Advisers works across all States and Territories, in appointing us you will be provided with the correct documents for your State or Territory.

The first category of documents includes (depending on your state of residence): advance care directives; powers of attorney and enduring guardianships.

The second category only relates to a person’s will.

Below, you will find a summary of these documents.

  • Enduring Power of Attorney

    This is important if you lose the capacity to make financial decisions for yourself.

    A power of attorney document allows the person (or people) that you nominate (known as the "attorney/s") to make all financial decisions on your behalf.

    If you do not have a power of attorney, those that wish to act on your behalf will need to apply to the relevant tribunal to have a suitable legal personal representative appointed. Not only does this take time (at an already stressful time), but the outcome may be inconsistent with your wishes.

  • Enduring Guardianship

    This is important if you lose (either temporarily, or permanently) the capacity to make healthcare and residential decisions for yourself.

    An enduring guardianship document allows the person (or people) that you nominate (known as the "guardian/s") to make all healthcare and decisions such as admissions to care facilities on your behalf.

    If you do not have an enduring guardianship, those that wish to act on your behalf will need to apply to the relevant tribunal to have a suitable legal personal representative appointed. Not only does this take time (at an already stressful time), but the outcome may be inconsistent with your wishes.

  • Testamentary Trust Will

    What is it? - a testamentary trust will is simply a will that creates trust for your beneficiary/ies, as opposed to leaving their share of your estate to them personally.

    What are the tax benefits? - Testamentary trusts provide tax efficiency for your family. Where a minor (person aged under 18 years) receives an income or capital gain distribution from a testamentary trust they are taxed at adult rates as opposed to the penalty tax rates for minors. This means each minor can receive up to $18,200 tax-free every year, and then be taxed at the usual marginal tax rates. So, if each child of yours had three minor children, they would be able to earn $54,600 per annum tax-free.

    What are the wealth protection benefits? - Without a testamentary trust, your estate is left to each beneficiary directly. In so doing, it is exposed to the risk of being split with a child’s spouse (married or de-facto) in the event of a separation and is also exposed to the risk of being used to settle debts owed to creditors on behalf of your children or their spouses.

    Properly crafted, a testamentary trust can protect your estate from these risks.