Estate plans

An estate plan helps make sure that your assets are distributed in accordance with your wishes and that your children, beneficiaries, or others you have responsibility for are cared for when you pass away. It can include documents such as:

– your will;

– a testamentary trust (as part of your will);

– superannuation binding nominations.

Your estate plan should also set out how you wish to be cared for, medically and financially, if you can no longer make your own decisions. This part of your estate plan may be in documents such as:

– a power or powers of attorney;

– a power of guardianship (giving someone the responsibility to make decisions about where you live and your medical care);

– an advance healthcare directive (your needs, values and preferences for your future care).

The documents you choose will depend on your situation, and legal advice is a good idea if you’re not sure.

You must be over 18 and mentally competent when you draw up your estate plan.

Planning for the future with a good estate plan means you and your family can be assured that your wishes are known, and that those you love will be cared for when you are no longer around. Successful estate planning should aim to surround your dependants with people who have a genuine interest in making their lives better. This might include family, friends, health providers, support workers and then financial protections such as wills and trusts.

Testamentary trusts

A testamentary trust is a trust that is written into your will and is often created in order to gift someone an asset or assets when they reach a certain age. A testamentary trust takes effect when you die, and it is administered by a trustee, who you usually name in your will.

It is the trustee’s responsibility to look after these assets (and any income generated by the assets) until your beneficiaries can receive them. This timeframe is set out in your will, and can be when:

– a beneficiary reaches a certain age, or;

– a beneficiary achieves a specific milestone, such as marrying.

You may want to consider setting up a trust if your beneficiaries are under 18 or have diminished financial decision-making capacity.

See Get Started for more information on testamentary trusts.

Special Disability Trusts

If you have a beneficiary who has a significant disability, you may want to consider a Special Disability Trust. This type of trust can assist immediate family members who have the financial means to do so, to make private financial provision for the current and future care and accommodation needs of a family member with severe disability.

Immediate family members may be eligible for concessions when they contribute to the trust, and an asset test exemption is available to the beneficiary of the trust (the person with the severe disability for whom the trust has been set up).

Before a Special Disability Trust is established, it is important to check the person with disability meets the definition of severe disability. See Get Started for more information on special disability trusts and how they work.

Microboards

A Microboard is a small group of people who commit to forming an incorporated association to work with a person with disability and help them to achieve their goals in life. Microboards are typically made up of trusted family and friends who care about the individual and will act in their best interests.

Having a Microboard means your family member with disability does not solely rely on main carers such as parents and siblings to support them in the future, instead they have a team of people around them who know them and are there to support them in building a rich and fulfilling life.

A Microboard might assist the individual with planning their life, advocating for what they might need now and in the future, networking and brainstorming ideas, keeping an eye on services and ensuring safety, and connecting the person to the community. They should meet regularly and keep good records, following the rules for incorporated associations in their state.

As incorporated associations, Microboards have a legal obligation to report on their financial management. The members must be 18 or over, and it is important to ask people you trust and who share your values and vision for your loved one, and who are prepared to work together. Board membership is voluntary, Microboards are not-for-profit entities.

See Get Started for more information about Microboards and how to start one.

 

Estate planning can be complicated. Always seek advice from a registered professional if you are unsure about any legal and financial details. Legal Aid Tasmania provide free legal advice to Tasmanians on 1 3 0 0 3 6 6 6 1 1. Services Australia offers free webinars on a variety of financial topics including estate planning, you can also access recordings of past webinars. See Get Started for more information.