The Importance of Wills and Powers of Attorney

To ensure that assets are, upon a person’s death, left to the beneficiaries to whom the Testator (the Willmaker) wishes the assets to pass, it is essential that a properly drafted Will is prepared.

By appointing Executors of their choice, the Willmaker ensures that his or her wishes are carried out by persons of their choice. Depending on a person’s situation, the Will may be either simple or more complex. A will containing Testamentary Trusts may be appropriate if a Willmaker wishes the Executors to have a discretion as to distribution of income and assets of the estate or to protect the interests of a beneficiary.

It is important to understand that assets held in a family trust do not comprise assets in the Estate of the Willmaker. The control of the Trust vests with the Trustee of that Trust and if the Willmaker is the Trustee, it is important in the Will to appoint a new Trustee. If the Trustee of the Trust is a company, of which the Willmaker is a Shareholder and Director, it is important to ensure that the shareholding is transferred to the beneficiary of the Willmaker’s choice.

Similarly, shares in a company should be transferred to the person of the Willmaker’s choice. As that beneficiary will be eligible to be appointed a Director of the company at a Shareholder’s Meeting. The Willmaker cannot appoint a Director in their stead.

When making a Will, the Willmaker must consider who is to be nominated as beneficiary(s) of the death benefit in their Superannuation Fund and must ensure that current Binding Nominations of beneficiaries have been made and the Trustee of the Superannuation Fund notified.

Enduring Financial Powers of Attorney are important if a person becomes mentally incapable of managing their own affairs or is, for any other reason, unable to sign documents. Careful consideration must be given as to who would be the person(s) most suitable to be the Attorney(s).

An Enduring Financial Power of Attorney does not give authority in relation to medical treatment.

An Enduring Medical Power of Attorney can be used to appoint a person to authorize medical treatment and to authorize the refusal of medical treatment including the withdrawal of life support if the donor of the Enduring Medical Power of Attorney is unable to do so.

A Power of Attorney, given to a person who is also a Director of a company confers no authority whatsoever for that person who appoints an alternate Director or to enable the Attorney to exercise the functions of the Director of that company.

A limited company can appoint an Attorney of the company to act on behalf of the company to perform specific acts. This is important if the Directors of the company are unavailable to attend to these acts.

If you would like further information please contact Tony Bateman.