Managing your finances to meet your day-to-day requirements as well as your long-term goals can be a complex task.

From selling your property through to your executor selection, an estate plan helps direct the distribution and protection of your assets.

Just like any high performing sports team, an estate plan isn’t complete without all the team members in place to carry out your plans.

Understanding the roles and responsibilities of each member of your estate planning team may help you decide whose best to carry each role.

General Power of Attorney

If you want someone to make financial and legal decisions for you for a limited time when you are unavailable, you need to make a general power of attorney.

For example, if you are travelling overseas and need someone to take care of your property and finances while you are away you would have to give your chosen decision maker power of attorney.

This means banks and other authorities would follow their instructions. A general power of attorney becomes invalid if you become unwell and as a result are unable to make your own decisions.

Enduring Power of Attorney (Financial)

An enduring power of attorney (financial) is a legal document that authorises a person to make financial and legal decisions on your behalf. The enduring power of attorney (financial) can take effect immediately, on a specified day or occasion, or if and when you become incapacitated.

It can be used for temporary circumstances.  However, because it is enduring, it will also automatically take effect if you become permanently incapacitated.

Enduring Power of Attorney (Medical Treatment)

An enduring power of attorney (medical treatment) is a legal document that authorises another person to make decisions about your medical care and treatment on your behalf.

The enduring power of attorney (medical treatment) takes effect if and when you become incapacitated.

The incapacity can be temporary, for example, due to a loss of consciousness after an accident. Or permanent, for example, due to dementia.

However, it does not take effect if your decision making capacity has been mildly reduced only briefly or mildly.

Enduring Power of Guardianship

An enduring power of guardianship is a legal document that authorises another person to make personal and lifestyle decisions on your behalf.

The guardianship takes effect if you become incapacitated. The incapacity can be temporary, for example due to injury. Or permanent, for example due to mental disability.

Executor of your Will

An executor’s responsibilities include the assets in your estate, paying your debts, and making distributions in accordance with the provisions of your will.

Trustees

If you’ve set up a trust, a trustee is responsible for administering the trust according to the terms you’ve designated.

These responsibilities include, but are not limited to, managing the assets in the trust, making payments to the beneficiaries, and filing all necessary tax returns.

A trustee can be an individual or an institution.

It’s important to give careful consideration to each person you appoint for every role, and have a discussion with each individual. You may also consider assigning a neutral party as your executor or to serve as a trustee, especially in the case of longer term responsibilities.

Alternatively, you many feel strongly about enlisting family members for the responsibility. Either way, communication is key and make sure you have a thorough conversation.

Read more on Protecting your assets: consider intergenerational wealth planning here.

As with anything to do with managing your finances, seeking professional advice from a financial planner is essential to create an effective estate plan.

There are many factors to consider such as taxation, legislation and protecting your wealth and assets. It is vital to seek the opinion of an estate planning expert before taking action.

Image courtesy of Shutterstock.com
IMPORTANT INFORMATION: The information and opinions contained in this article are of a general nature only and does not take into account the investment objectives; financial situation or particular needs of any individual or entity and does not constitute specific or personal advice. The information and opinions herein do not constitute any recommendation. No financial product or financial service should be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances.  Information, forecasts and opinions contained in this article can change without notice. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. This article has been prepared by Modoras Pty. Ltd. ABN 86 068 034 908,  AFSL 233209.

  • I’m the only member if my estate planning team. Don’t need anyone else. I’ve made my will, kids get everything, nothing more to do

    Reply


  • Really interesting read and important clarification on the roles and responsibilities associated with each title

    Reply


  • I haven’t given this a lot of thought but perhaps it is time.

    Reply


  • A very informative article. For those with elderly parents, the power of attorney info is very important. I’ve recently been looking into it so thanks for the reminder to get it done.

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  • A good reminder that we need to get our ducks in a row

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  • We have finally put the effort into having a will drawn up professionally – but stil haven’t taken time to get witnesses so we can sign it! This post is a reminder to me to get on with it

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  • scary stuff

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  • wow it is a lot of people to deal with

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  • Didn’t know there were different types, so this is good to know.

    Reply


  • This is a great article and something I have recently been looking into.

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  • Very interesting article, thanks for the information.

    Reply


  • Great article, sometimes it’s hard to know who to enlist in handling your affairs while sick, or after death. Thanks

    Reply


  • Thanks for sharing this important an informative information.

    Reply

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