Top Five Legal To-Dos

As we move into our 50s and 60s, our relationships and family responsibilities change. Our lives follow new paths, but many of us fail to alter the legal structure of our lives to reflect this.

We speak with David Tilbury, solicitor at Sydney's Cropper Parkhill and member of the Society of Trust and Estate Parishioners (STEP), about the legal steps we should take from 50 on.

Number One: Will

A will contains instructions on how you want your estate to be managed and distributed after your death.

David: "It is amazing how many people don't have a proper will. There have been reports from time to time that less than half of Australians have a will or one that is up-to-date."

You can write your own will - there are kits available at newsagents and online. But like anything, what you pay for is what you get.

David: "There is no substitute for a qualified person ensuring you have a will that is valid. It is worth spending a bit more money to guarantee the assets you have accumulated in your life are properly dealt with when you die."

The construction of a basic will costs approximately $400, though this can vary. Alternatively, creating a will with your spouse will cost around $700.

It is also important to remember that a will is a living thing - it should be reviewed every couple of years.

David: "The people for whom you have left things may have died, more children or grandchildren may have been born - there are many reasons to change your will as time passes. People often decide to change their will after they have made it - this can happen two, five, 10 or more years down the track. If this involves a simple amendment, you can use a codicil. This is a very simple supplement that updates a will and is less expensive than a new one. I have seen wills with four or five codicils - this can get very confusing, so in such cases it is better to start a fresh new will."

"I was once acquainted with a wealthy widow who, having no spouse or children, left her estate to her nieces and nephews in her will. But in her later years, a philanderer came on the scene, wooed her and talked her into making a new will. Some time after this, she found out the man was having an affair with someone else and burnt the new will, thinking it would revive her initial one. However, she presumed wrongly and died without a valid will - a statutory order eventually stipulating her sister should inherit her estate. To avoid such complications, it is definitely best to re-assess and, if necessary, update your will every few years."

Number Two: Power of Attorney

A power of attorney is a document signed by an individual that gives a person nominated by them the power to act on their behalf should they become incapacitated.

While a family member is usually nominated power of attorney, the responsibility does not have to rest with just one person.

David: "You can say, ‘I appoint my wife as long as she has capacity, but if she doesn't I appoint my children.'"

Power of attorney can further be given to two people who operate jointly or otherwise, depending on the donor's wishes.

David: "If someone doesn't have immediate family or doesn't trust their family, they often appoint a legal representative as power of attorney along with a family member - they often serve as a calming influence."

A power of attorney must be someone you trust implicitly, as they have the legal powers "to clean you out and head to Rio." It may seem daunting to give someone such powers - particularly when you are in fine physical and mental health - but in the case of losing capacity, everyone needs someone to act on their behalf.

David: "It is like having an insurance policy - if you have a car accident, fall down the stairs or have a stroke, your life can go on through this person. They can buy and sell shares or property on your behalf and generally exercise a wide range of powers given under the Powers of Attorney Act."

"I am aware of one case where an elderly lady suffered a stroke that incapacitated her. She had not left a power of attorney, but a close friend believed the lady has wished her to manage her affairs in the event of such a problem. The friend applied to the Guardianship tribunal for orders that she represent the lady in the handling of her affairs, but the Protective Commission was appointed her financial manager instead. Whatever wishes the lady may have had were given no effect."

Number Three: Appointment of Enduring Guardian

An appointment of enduring guardian gives a nominated person the authority to make personal or lifestyle decisions on someone's behalf - an authority a power of attorney cannot give.

David: "While a power of attorney is confined to making financial decisions for you, an appointment of enduring guardian enables the appointee to make lifestyle decisions for you - involving what kind of accommodation you live in, what kind of nursing and medical care you get, what kind of minor procedures such as dental care are carried out, and so on."

"I take the view that if you have a strong family unit, and your spouse and children know what you want and what sort of medical care you will need, then you probably don't need an enduring guardian. But if you are a person that lives on your own or has no immediate family, you might find yourself at the mercy of a beneficiary that might want you to pop off sooner rather than later, meaning you might not receive the care that you need. If you have that document, you have the power to see to these things."

"You may have heard of a recent, well-publicised case in the US which illustrates the importance of choosing a guardian. Terry Schiavo was in a serious accident which left her in a coma. Her husband accepted medical advice that she could not recover and agreed that her life-support should be switched off. The woman's elderly parents did not accept that medical advice, and fought in the courts for several years to keep her alive. The courts finally ordered that the life-support should cease."

Number Four: Advanced Health Care Directive

An advanced health care directive sets out specific instructions on medical treatment, care and health-related issues, including use of life-support systems.

David: "An advanced health care directive or ‘living will' as it is sometimes called, involves saying to your doctor and your family one of two things: ‘If I am being kept alive by artificial means and my condition is regarded as terminal, I want the machines switched off,' or ‘Such are the advances of medical science, I want to be kept going as long as possible in the case of a cure being found.' Overwhelmingly, people choose the first option."

"More and more of these are being asked for. People are increasingly concerned about dying with dignity, avoiding continuing to live although a vegetable, and so on."

Number Five: Information for Your Next of Kin

Finally, it is important to leave a list of wishes and instructions indicating where all your papers are to be found, what assets you have and what particular wishes you have with regard to cremation or burial.

David: "I had an experience with one estate involving an old chap who was quite wealthy and died in a little hut on a huge parcel of land. Upon his death, his somewhat distant relatives planned his funeral and burial. It was only when they came into our offices to discuss the estate that they discovered the man's wish was to be cremated and his ashes scattered."

"You should really make this stuff known to your executors in writing - where your documents are held, what your assets and liabilities are, and any other special things you can think of to help your executors in administering your estate. These days, more and more people are living on their own and do not have strong family networks, so identifying one's final wishes is imperative."

Please contact Cropper Parkhill Solicitors on (02) 9232 5000 or visit www.cp-law.com.au

For more information on the worldwide body STEP, please visit: http://www.step.org