Estate planning and testamentary capacity – don’t leave it too late!

We all know and understand the importance of having an estate plan in place. However, when we think of ‘estate planning’ we often only think about preparing a Will.

Will

A Will is a legal document which sets out how you wish for your assets to be distributed upon your passing. Where applicable, it also sets out who you wish to be the guardian of infant children and your funeral wishes.

A Will is not the only important document to consider when obtaining estate planning advice. Of equal importance is the preparation of an Enduring Power of Attorney and an Advance Care Directive.

Enduring Power of Attorney

An Enduring Power of Attorney is a legal document which enables you to appoint someone you trust to make legal and financial decisions on your behalf especially when you become legally incapacitated. An example might be if you become of unsound mind or are unable to communicate in any way, for example after a stroke. Actions your Attorney may undertake on your behalf include paying your bills, managing your business and in certain circumstances making relevant decisions concerning your superannuation, amongst other things.

Advance Care Directive

An Advance Care Directive is a legal document which enables you to appoint someone you trust to make health and lifestyle related decisions on your behalf in your lifetime should you lose capacity.  Examples of decisions a substitute decision maker may need to make on your behalf include whether you should be relocated to a nursing home, whether or not to turn off life support etc.

The importance of testamentary capacity

Often the importance of having each of these documents in place is not completely appreciated until we have been affected by a family member or loved one who has lost capacity and/or passed away.

However, to have your estate planning documents prepared you must have capacity. For a Will, the old English case of Banks v Goodfellow (1870) 5 QB 549 sets out the test for testamentary capacity required, which is that the individual understands:

• the purpose and effect of a Will;
• at least in general terms the nature, extent and value of the estate;
• the people reasonably expected to be included as beneficiaries and the basis for that expectation;
• and has the ability to evaluate and discriminate between the strength of the claims of each of those people.

Similar criteria must be met when assessing whether a person has capacity to prepare an Enduring Power of Attorney and Advance Care Directive.

Don’t leave it too late!

As a lawyer working in Wills and Estates I often receive enquiries from concerned family members wishing to assist their loved ones to prepare these estate planning documents due to concerns about their poor health. Often these enquiries are made too late, when the individual has already lost capacity.

We all require an estate plan to be put in place, irrespective of what stage of life we are in. As such, if you are over 18 and do not have an estate plan in place I would urge you to contact a Wills & Estates lawyer to seek advice. Do not leave it too late as this can result in your wishes not being met, and unnecessary pain and worry for your loved ones at a time that is already challenging for everyone involved.

Get in touch!

TGB’s Wills & Estates team can help you with all of your estate planning needs, giving you and your family clarity, certainty and control.

Find out more information about our Wills & Estates services, get in touch with us here, or give us a call on (08) 8212 1077.