5 legal terms you need to understand
As we grow older we’re required to make a range of decisions regarding our health, wellbeing and assets that will be some of the most important we make in our life.
So it goes without saying it’s important to understand the terms.
We’ve taken a look at five legal terms every Australian senior needs to understand. Becoming acquainted with these terms is the best way to get the ball rolling.
1. Power of Attorney
Varying somewhat from state to state, a Power of Attorney is a legal documents giving someone legal authority to manage your financial affairs. This is useful if you find the demands of financial management too much or if you don’t want to burden certain member of your family with the responsibility of looking after your financial affairs.
2. Will
Generally speaking, a will is a formal document that’s designed to provide direction for the distribution of a person’s property and assents when they pass away. Making a will is no simple task, and requires the consideration of a range of complex financial, legal and tax issues, to ensure that your estate is distributed in accordance to your wishes.
3. Beneficiary
A beneficiary is the person who receives your assets when you pass away. It’s essential to make sure you have the correct names and details on your will to ensure the right beneficiary receives the right assets, as that is a mistake a lawyer can rarely fix.
4. Testamentary trust
Testamentary trusts are set up to protect the assets in a will, taking effect when the person who has created the will passes away. A trust is administered by a trustee (appointed in the will), who looks after the benefits of the beneficiaries until the trust expires.
A testamentary trust is useful in the following instances:
- Beneficiaries are minors or have diminished mental capacity.
- Beneficiaries are not trusted to use inheritance wisely.
- Avoid split of family assets in event of a divorce settlement.
- Avoid split of family assets in event of bankruptcy proceedings.
5. Enduring Guardian
An Enduring Guardian can makes decisions on your behalf when you lose capability to do so. And Enduring Guardian has the capacity to make a range of important decisions regarding lifestyles, healthy and medicinal treatments, so it’s important to choose the right person.
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