You’ve done the work and your property is performing well. Make sure you take the final key steps to ensure you maintain full control over your assets.
If you have invested in property, I recommend that you give serious consideration to ensuring that you have an up to date Will and a Power of Attorney. This article attempts to explain why these two documents are essential.
There are legal rules about what happens to our assets if we die without a Will, known as the ‘rules of intestacy’. Even if we have a Will and it doesn’t cover all of our assets, those assets that are not included in the Will, will be covered by the laws of intestacy. For persons married with children, the rules of intestacy provide that the estate goes to the spouse and children. For single persons, the laws of intestacy set out a number of rules as to how assets are to be distributed amongst members of the immediate family, depending upon who survives. Sometimes the rules of intestacy will be adequate to govern what happens to an estate. Most times however, you may wish to have some control over what happens to your estate.
This can only be achieved by having a valid up to date Will.
If you use a company or trust structure to purchase property, you should be aware of the succession consequences of the structures. That is, if you hold shares in the trustee company to whom do you want control of the trust to pass on your death? If you don’t have a corporate trustee, what does the trust document provide in relation to succession? A Will cannot deal with property that is owned by a trust but the Will should be drafted having regard to the provisions of the Trust Deed. Similarly, a Will cannot deal with company property, but a Will can be effective to pass on shares in a company.
Anyone can make a Will, but it is rarely in your best interests to draft a Will for yourself. A home-made Will may be unclear, or create an un-wanted tax burden on the estate. Skilled professional advice is recommended for possibly one of the most important legal documents you may ever make.
2. Powers of Attorney
A Power of Attorney enables your Attorney to do all legal things in your name and on your behalf, so they can buy, sell or mortgage property. If you travel regularly or engage in risky activities which may result in your hospitalisation, it may be advisable for you to appoint an Attorney to look after your property interests while you are incapacitated or overseas. A Power of Attorney may be for a limited period of time or it may be restricted to certain powers, rather than being a general Power of Attorney over all your legal matters. A Power of Attorney can be useful on those occasions when you are not available to sign necessary documents related to sale, purchase or mortgage or discharge of mortgage in relation to property transactions.
I recommend that you review your Will and Power of Attorney each time you engage in a property transaction to ensure they are up to date. For example, in the case of one estate, where the testator intended his niece to receive one property, and his nephew to receive another, the testator purchased a new property and sold one of the properties and died before he updated his Will. Accordingly, the niece received a property and the nephew received nothing. This was an oversight of the testator, who died suddenly. Always check that your Wills and Powers of Attorney are up to date and if in doubt, seek legal advice.
Susan Parker is an Accredited Specialist in Family Law, with broad experience in general law. Her many years of practice have equipped Susan with skill, understanding and an ability to assist clients to move forward with ease. Further information is available from www.parkerlaw.com.au