Getting Your Legal Documents in Order

Planning for the future is not about giving up control. It is about keeping it, whatever happens. When you put your wishes in writing now, your decisions about your money, your property and your health are the ones that get followed.

It is also one of the kindest things you can do for your family. Clear choices take away stress, and they stop disagreements at the worst possible time.

These rules are set by state and territory law, so they differ depending on where you live. This guide is written with New South Wales in mind.

Step 1: Choose your people

Three roles, and they are not the same job. One person can hold more than one, but if you can, spread the roles across the people you trust.

Your attorney — money and property. They look after your finances if you cannot. Appointed in your Enduring Power of Attorney.

Choose someone who is:

• honest and trustworthy with money
• financially responsible and organised
• willing and able to take it on
• able to keep clear records

Your guardian — health and lifestyle. They make decisions about your health care and where you live, if you can no longer decide. Appointed in your Enduring Guardianship.

Choose someone who:

• understands and respects your values and wishes
• can make hard decisions under pressure
• communicates well, and will speak up for you with doctors

Your executor — your will. They carry out the instructions in your will after you die, and make sure your assets go where you wanted.

Choose someone who is:

• organised, responsible, and can handle paperwork
• fair-minded, and able to deal with your beneficiaries
• able to manage the legal and financial tasks involved

If you have not appointed anyone, this is the priority. Without an attorney or a guardian, a tribunal may have to appoint somebody for you — and that person may not be who you would have chosen.

Step 2: The four documents to have ready

Four documents cover the decisions someone may one day need to make for you.

Enduring Power of Attorney — your money. Lets the person you choose manage your money and property if you cannot. This is the one that matters most for your financial safety, and the one most of this website is about.

Enduring Guardianship — your health and where you live. Lets the person you choose make health and lifestyle decisions if you can no longer make them yourself.

Advance Care Directive — the medical treatment you want if you cannot say so yourself. Your own written statement of what you do and do not want. An Enduring Guardian is a person; an Advance Care Directive is a document. Your guardian follows it.

Will — what happens after you die. States who receives your property and assets. One thing worth knowing now: getting married revokes your will, unless that will was made specifically because you were planning to marry that person — what the law calls being made “in contemplation of marriage”. A will does not expire; what makes one out of date is a change in your life, not its age.

Your will also does not cover your super. Superannuation is not part of your estate, and it is the fund — not your will — that decides where it goes, unless you have made a binding death benefit nomination. Some nominations lapse after three years and have to be renewed; others are non-lapsing. Worth finding out which kind you have. Your fund can tell you.

Each of these has strict rules about how it must be signed and witnessed. Your solicitor will handle that, and it is worth having them do it — a document that was not executed properly may not work at the moment it is needed.

Step 3: Making them safe

Having the documents is one thing. Making sure they work the way you intended is another. These five are what turn a legal document into a safeguard, and they build on each other.

Separate the roles

Where you can, appoint different people as your attorney and your guardian.

It spreads the load. Looking after someone’s money and making decisions about their health are two demanding jobs, and one person doing both — while working, or grieving, or raising their own family — is a great deal to ask.

It also does something more useful. Two people, each responsible for part of your wellbeing, have reason to talk to each other and standing to ask questions. Your guardian knows what care you are receiving. Your attorney knows what is being paid for. Neither is in charge of the other, and between them very little goes unnoticed.

Require two people to agree on big decisions

You do not have to give one person complete control. You can appoint two attorneys, or two guardians, and require them to act together — so neither can act alone on the things that matter most.

Big decisions might include:

• selling your home
• withdrawing a large sum — for example, anything over $5,000
• moving you into aged care

Businesses do the same thing with two signatures on a cheque. It is a simple check, and it keeps each of your attorneys accountable to the other, and both of them accountable to you.

Set limits on what your attorney can do

An Enduring Power of Attorney does not have to be all or nothing. You can restrict it — to particular accounts, particular kinds of decision, or particular amounts. Work out what you actually want them to be able to do, and tell your solicitor before the document is drawn.

Know when your power of attorney starts

You choose whether it begins the moment you sign it, or only when a doctor assesses that you can no longer make decisions yourself. Both are legitimate, and they are very different.

If you already have one, yours may already be active. If you are not sure which kind it is, read the document or ask the solicitor who drew it up.

Build in reporting

Ask whoever acts for you to keep a simple notebook of the significant decisions they make and what they spend. An attorney is legally required to keep records and to keep your money separate from their own, so a logbook is just the easy version of something they already have to do.

Then decide who else sees it. If you have other children, a sibling, or a close friend, you can ask that one of them be able to look at the logbook — or that a short summary goes to them once or twice a year. You decide who, and how much. It can be as little as: my daughter in Perth gets a note each Christmas saying what was spent and why.

And you do not have to leave this to goodwill. Conditions can be written into an Enduring Power of Attorney or an Enduring Guardianship — directions about how the authority is to be used, including a requirement to report. Ask your solicitor what is possible in your documents. A reporting requirement that is written into the document is a very different thing from one agreed over a cup of tea five years ago.

This is not about doubting anybody. It is the best protection the people helping you have. Where one person handles a parent’s money alone and nobody else can see anything, suspicion fills the gap — and families fall out over arrangements that were entirely proper. You are safeguarding your family harmony.

Your action plan

1. Talk to your people. Ring the people you have in mind and ask whether they are willing to take these roles on. Nobody should find out they are your attorney by being handed a form.
2. Book a solicitor. They will prepare your will, Enduring Power of Attorney and Enduring Guardianship, make sure everything is signed and witnessed properly, and talk you through the choices in Step 3.
3. Book your doctor. An Advance Care Directive is a conversation about treatment, not a drafting job. Your doctor can help you think it through, and you complete the NSW Health form yourself.
4. Store the originals safely. With your solicitor, in the Will Safe service at NSW Trustee & Guardian, or in a bank safe deposit box. Not at home, where they can be lost, damaged or taken.
5. Give out certified copies, not originals. Your attorney and guardian do not need the originals. A Justice of the Peace, a lawyer or a notary public can certify copies.
6. Tell your family you have made a plan. For example, tell your executor where the original will is.