Elder Abuse in Australian Estate Planning

The longer we live, the better our scientists & doctors will become at improving our life-expectancies. Australia now has one of the highest life expectancies in the world (higher even than USA and UK).

As a result we can expect to live longer but we must also expect to require increasing amounts of assistance in our later years.

In short we are likely to rely upon an increasing amount of care towards the end of our lives, and this care will be provided by people who will be in a position to influence us regarding testamentary gifts.

The role of carer can be quite an intimate one. Confidences can be shared; friendships are established. It becomes a "trust" relationship. However the potential inequality in the relationship (the reliance that is necessarily placed upon the stronger person by the weaker person in the relationship) creates a ready climate for exploitation.

As a society, we judge the respective "bargaining" positions of many common relationships, such as employer/employee or teacher/student. Where one party is thought to be too weak to properly protect their own interests, the Government & the Courts will intervene to offer protection against unfair or unreasonable behaviour.

It is understandable that we may want to show our gratitude to our carers by providing for them in our Will. However such bequests can be open to challenge by family members and other beneficiaries after our death.

Questions of capacity and influence may arise.

Sadly, "Elder Abuse" is an increasing concern in modern society. "Gold-digging" is seen as a product of bullying, fraud, menace, duress, or undue influence. Advantage is sometimes taken of an elderly person's reducing health, mobility, independence or mental status.

All sorts of rationalisations and justifications are offered by those unscrupulous enough to place their own interests ahead of the elderly person: "It's what they would have wanted" is a common contention. Feelings of expectation & entitlement, or a response to financial desperation, are also commonly seen explanations.

We have all heard of examples where a vulnerable & elderly person changes their Will very shortly before their death, leaving a substantial gift to a "new friend" or carer.

Such gifts are likely to be viewed with considerable suspicion by Australian Courts.

Anyone (especially elderly people) wanting to leave assets to a carer should take considerable care to minimise the risk that the gift will be invalidated. There are steps that can be taken by an experienced lawyer specialising in estate planning to greatly assist your testamentary intentions to be made effective.

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A Will Vs A Revocable Living Trust - Which is Better?

There's a big debate going on over whether a will is sufficient or if people really need a living trust.

What's the answer?

The truth is, both are great estate planning tools and choosing the right one for you will depend upon your individual needs.

Someone who's just starting out for example, may not yet need all the bells and whistles that a living trust can offer. With only a small accumulation of assets and a limited number of heirs, a will might just be the perfect solution.

It's when you start adding in extended family members, mortgages, children, grandchildren, vacation homes, and the like that you begin to see the need for something a little more comprehensive.

Yes, a will can still take care of the basics but you'll be missing out on some very unique benefits that the living trust can offer.

For example, a living trust allows your heirs to skip the probate process and instead, inherit your assets without court supervision. A trust also keeps your estate private, away from the prying eyes of con artists and overly aggressive sales people looking to make a quick buck.

A living trust can do things like offer incentives to your heirs and protect disabled dependents who rely on government assistance programs. It can even protect your assets in the event you suffer from a disability later on in life.

So, is one better than the other? No, but there's definitely a choice that's most appropriate for you.

The only way to decide which tools are best for you is to talk with a qualified estate planning attorney.

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Planning in the Year of No Estate Tax

With the 2010 estate tax phasing out by the year's end, estate planning will now have to incorporate considerable measures to reduce tax implications for deaths that occur in the future. For the majority of individuals, the lax rules do not affect them.

However, in 2011, the exemption for the value of assets you own upon death will drop to $1 million. While there may be a possibility that the tax will be increased through legislation by Congress, it is best to plan for the worst.

When you pass away, the IRS may impose an "estate tax" on your assets, depending on how much they are worth. In California, only the IRS requires the payment of this tax, California has no "death tax". Your assets can be calculated by adding up the total of your life insurance, realty and bank account funds. In 2011, if this total reaches over $1 million, then the excess value will be taxed by the IRS at 55%. For example, if a loved one dies in 2011 and owns assets worth $1.5 million, then their estate will have to pay over $250,000 in taxes within 9 months of their death.

One of the focuses of estate planning is to reduce the amount of ownership interest that an individual has over their property. The government takes into account all property that the decedent owned, controlled, possessed or enjoyed. If you are a married couple, you could have a cumulative exemption of $2 million and through a Will or Trust, shelter all of that amount from the estate tax. Estate planning can also reduce taxes for assets valued over $2 million for a couple and $1 million for a single person through other means like gifting, charitable giving and family limited partnerships. The tools of estate planning employed by a competent attorney could effectively eliminate estate tax burdens on a family after a loved one's death.

For example, every individual is able to gift $13,000 per person, per year without any gift tax consequences. All charitable donations are tax exempt, so if your Will or Trust provided for a charitable gift at your death, the value of that gift would reduce your asset exposure to the estate tax. Many families consider this a better alternative than paying that tax consequence to the IRS. Finally, if a limited partnership is set up around the management of properties and securities, then a family can reduce the IRS value at death due to a discount given on assets that have multiple owners.

Effective planning helps to lower the overall costs that a decedent's holdings have to bear. Tax exemptions and credits are typically utilized in order to maximize asset distribution. In addition, varying trust structures are created in order to shelter property from an excess amount of liability.

A qualified and experienced attorney can assist you in creating a customized solution to your specific issues. Many intricate strategies can be incorporated into a plan that reduces a decedent's total holdings, which then leads to a smaller liability. Having the right legal professional on your side can save your beneficiaries thousands of dollars in estate tax and can keep more of your assets within your family.

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Power of Attorney Legal Information

A power of attorney is a type of legal document in which you declare that you are assigning another person (a close relative or a trusted friend) the authority to make certain decisions on your behalf while you are temporarily unable. The person to whom you give these rights to is called an "agent". You, as the designator, are called the "principal." The agent is a "fiduciary", which means that he or she must perform any decisions with your best interests in mind and completely in good faith. Good faith simply means that something is being done without the intent to deceive.

If a person were going to be hospitalized for a common surgery, or was going to be physically unable to perform certain financial or legal obligations, an agent can be selected for a Limited Power of Attorney. This person could perform such tasks as banking affairs, paying bills or other tasks as assigned by you. As long as you, as the principal, are capable of making decisions with a sound mind, the agent must follow your directions. Once you are able to perform the required tasks on your own, the power and privileges are revoked. In other instances, there should be a time limit set for these powers, with an indefinite time frame or permanency clause avoided. This document is also null and void if you become permanently incapacitated or were to die.

The second type of authority is a General Power of Attorney. This document gives the agent the ability to perform any tasks that you yourself can do including, but not limited to decisions and follow through of banking transactions, opening safety deposit boxes, completing transactions involving securities, stocks and/or bonds, the buying and selling of personal property, purchasing life insurance, settling claims, entering into legally binding contracts, controlling real estate (which would include, selling, buying and/or managing), filing tax returns and decisions related to government benefits. The person acting as your agent should be a trusted individual. Again, the agent is someone who would act with only your best interests in mind.

A Health Care Power of Attorney designates an agent to make health care decisions for you if you are unconscious, mentally incompetent, or otherwise unable to make such decisions. It is important to understand that there is a difference between this document and a Living Will. A Living Will only provides directive in the event that life sustaining decisions are in question. Your agent would be entitled to make decisions including but not limited to surgeries, doctors, hospitals, after care and the amount of life saving efforts performed on your behalf. Again, the agent should be someone you have absolute trust in. With these documents and the power bestowed on the agent, it is imperative that an understanding be in place regarding your wishes before the document is signed. In most states, this person cannot be a health care provider or a hospital/care facility employee, even if they are related.

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What is a Durable Financial Power of Attorney?

A durable financial power of attorney (POA) is a document that grants authority to someone of your choosing to handle your financial matters. This can include paying your bills, accessing your bank accounts and even selling or buying assets and negotiating real estate deals.

A regular Durable POA allows the named agent to step in at any time and doesn't require a disability to be active. For example, your wife could sign a financial document for you while you are out town.

A "springing" Durable Power of Attorney on the other hand, only gives your financial agent access to your finances when a doctor has diagnosed you as mentally or physically unable to handle your own affairs. In the case of a "springing" durable POA, you will be in full control of your own financial matters while you are of sound mind and body.

If your family depends upon you for financial security, a POA can allow them to continue using your assets if you should become disabled. If you do not name a power of attorney your spouse or family will have to get a court order to handle your finances. This will require a judge to declare you "incompetent" and could delay paying bills and paying for any medical care you may need.

Your Durable Financial POA is only valid while you are still alive. Upon your death, control of your financial assets will pass to your estate executor or your trustee if you have named one.

In addition, a Durable Financial POA will also terminate automatically if you cancel it, a court deems it invalid, your spouse was the agent and you divorce, or if the named agent is not available. Considering this last case, it is a good idea to name a back-up financial agent.

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Simple Will Form Information

A person who is at least 18 years of age can complete a Will and is referred to in the Will as the testator. An emancipated minor can also complete a Will. A Will does not have to be worded in any particular way to be legal, as long as it is signed as required by Florida law.

A Will is used to list houses, land, businesses and the names of the persons the testator is giving the property to. The term "devise" in a Will also means to dispose of. The words "gift", "bequest", "give", or "bequeath" may also be used. The person receiving a gift in a Will is called the beneficiary.

A Florida Last Will and Testament Form may also refer to a separate list of the testator's personal property such as cars, jewelry, boats, etc. and it would also include the names of the persons the testator is giving the property to. This separate list must also be signed by the testator. The personal property described in the list would not be listed in the Will and includes only tangible personal property. This list can be made by the testator before or after signing their Will. This separate list can also be changed by the testator without effecting the Will. If more than one list exists at the time of the testator's death giving the same property to two different people, then the most recent list would be used to decide who receives the property.

Although it is rumored that a Florida Last Will and Testament form can contain a statement that would in someway penalize a beneficiary or other interested person for contesting the Last Will and Testament form, it is actually not true.

A Will can be revoked by declaring it in writing, by destroying it or by completing a new Will that contains a statement that revokes the previous Will completed by the testator.

The testator's gifts to a spouse in a Will become void if they're later divorced or the marriage is annulled before the testator dies.

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