The Australian Bureau of Statistics reported that in June 2020 there were 7.2 million families in Australia. Of these 1 million (14.2%) were ‘one-parent’ families. With over 64% of the one-parent families having children under the age of 18 years, there is a growing need for single parents to review their Estate Plans.
An Estate Plan can be as simple as a Will, but can also include directions about powers of attorney and setting up structures that may outlive you and provide for your family going forward while protecting them from unscrupulous investment.
If you are a single parent, we have put together the following questions you need to ask when reviewing your Estate Plan and deciding what is right for you.
Have I updated my Will?
Throughout our lives there are many significant events that require us to review our Wills. Such events include marrying and the process of getting a divorce or separating from a de facto partner. If you pass away without updating your Will, it may be that your assets will be left to your ex-spouse or partner. Therefore it is essential that you review your Will to ensure that you are protecting your assets and your children’s inheritance and future.
As part of reviewing your Will, you need to consider how your assets are to be dealt with. Your collection of assets after you die is known as your Estate. If you have children under the age of 18 years, you may want to instruct your Estate to hold your children’s share of your estate in trust so that their education, health, maintenance and support can be managed for them, and you may want different levels of management as they reach older years as well.
When reviewing your Will, it is important to seek legal advice if you have children under the age of 18 years as it may be worthwhile considering establishing a trust (such as a testamentary trust) to protect your children’s inheritance and provision for future needs.
Have I appointed a guardian?
A guardian is a person who will be responsible for your children’s care, welfare and development upon your death until such time as they reach 18 years of age. A guardian is responsible for making decisions in relation to education, medical care, living arrangements, religion and other issues affecting your child and therefore you need to carefully consider who you wish to be responsible for this.
It is important to understand that including a guardian in your Will is not necessarily binding, however it is still best to include your wishes in your Will as it provides your intentions which will weigh heavily in a decision that a Court may have to may in regards to the guardianship of your children.
To find out more information on how to choose the right guardian, please read our recent article – Choosing The Right Guardian For Your Children.
What assets aren’t covered by my Will?
Not all of your assets can be controlled by your Will. These can include life insurance proceeds or superannuation death benefits. When reviewing your Will, it is important to obtain legal advice on these policies as failure to deal with them properly could result in funds being paid to unintended beneficiaries.
Other assets that need to be considered are those that are jointly held. Whether it be bank accounts or property, should these assets not be dealt with accordingly, upon your death they may not be distributed in accordance with your Will.
What else do I need to think about?
Should you, for whatever reason become incapacitated and are no longer able to make financial, legal or personal decisions, you need someone who you trust to do this on your behalf. It is therefore crucial to consider whether you need include a Power of Attorney in your Estate Plan.
There are various types of Powers of Attorney available however the two that you may wish to consider are:
- Enduring Power of Attorney – this authorises someone to make financial and/or personal decisions on your behalf.
- Appointment of Medical Decision Maker – an adult you have appointed is able to make decisions regarding your medical treatment when you are not capable of being able to do so yourself.
How can Nevett Ford help?
If you are in the process of getting a divorce or separating or have divorced and separated, it is critical that you review your Estate Plan or if you do not have one, make one to ensure protection of your assets and children. Our lawyers specialising in wills understand that dealing with things may be difficult however we will guide you through the process to ensure that you are provided with a customised strategy to best suit your situation. Please email us at melbourne@nevettford.com.au or phone on 03 9614 7111.