McKillop Legal Blog

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What is legal tender in Australia?

As you would expect, Australian banknotes are legal tender throughout Australia.

Similarly, a payment of coins is a legal tender in Australia however, there are restrictions, such as those in the Currency Act 1965, about how much can be paid in coins.

Coins are not legal tender if they exceed:
  • 20c where 1c and/or 2c coins are offered (these coins have been withdrawn from circulation, but are still legal tender);
  • $5 if any combination of 5c, 10c, 20c and/or 50c coins are offered; and
  • 10 times the face value of the coin if $1 or $2 coins are offered.

For example, if someone wants to pay a merchant with 5c coins, they can only pay up to $5 worth of 5c coins and any more than that will not be considered legal tender.

The above is of course subject to any agreement between parties – a provider of goods or services is at liberty to set the commercial terms upon which payment will take place before an agreement for the supply of the goods or services is entered into.

For example, vending machines may not accept small denomination coins or payment may be agreed to be made in foreign currency such as USD.

If you would like any more information in relation to any commercial law or contractual issue, please contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au

Source: Reserve Bank of Australia 

Trust & Superannuation Deed Amendments

Do you or any of your clients have a family/discretionary trust, unit trust or self-managed superannuation fund and want to change the deed?

Often the change is to remove and replace a trustee with a new one. In other situations, it may be changing a class of potential beneficiaries, dealing with the power of appointment, bringing forward the termination date or changing the trustee’s rights and/or obligations.

Care needs to be taken not to vest the trust or to cause a resettlement, which can give rise to unintended consequences, including:

  • CGT and
  • stamp duty.

There is no real “one size fits all” solution. Deeds can vary greatly as to the process and requirements.

McKillop Legal can assist in reviewing the relevant Deed/Rules and drafting an appropriate document to give effect to the required change.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to trusts, estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

School zones in operation

REMINDER: School zones will be operational again from Monday, 30 January 2017.

40km/h school zones help protect children on their way to and from schools at the times and places where they are often in high numbers. School zone signs, pedestrian crossings and dragon’s teeth road markings improve the visibility of school zones.

Double Demerits this Australia Day weekend

Those making a long weekend out of the upcoming Australia Day celebrations this Thursday are reminded of the double demerits points scheme that applies for driving offences, including:

  • Speeding
  • Illegal use of mobile phones
  • Not wearing a seatbelt
  • Riding without a helmet

The scheme is designed to encourage safe and responsible driving and will apply from 25 – 29 January 2017 inclusive as well as on other long weekends and holiday periods throughout the year. Drive safely.

What does an enduring guardian do?

An enduring guardian is a person appointed to make decisions about your health and lifestyle for periods in which you are incapable of making such decisions for yourself (for example if you have dementia, are in a coma, are unconscious following a car accident or suffer from some other mental incapacity.)

Appointing an Enduring Guardian is an important step in implementing a proper estate plan (others include having a Will and appointing a Power of Attorney).

HOW DO YOU APPOINT AN ENDURING GUARDIAN?

You can choose who can make decisions on your behalf regarding your medical and dental treatment and decide where you live if you are not capable of doing this for yourself. These are known as “functions”. The easiest way to do this is to appoint an enduring guardian.

The appointment of an enduring guardian takes effect only if and when you become unable to make personal or lifestyle decisions for yourself, such as where you are in a coma, are unconscious or suffer from mental incapacity like dementia.

WHO CAN BE APPOINTED?

An enduring guardian must be at least 18 years of age but cannot be a person who, at the time of the appointment, provides you with medical treatment, accommodation, support or care to you as a professional.

The appointed enduring guardian should be someone that you trust absolutely as they have significant powers. Although an enduring guardian must act in accordance with the provisions of the Guardianship Act 1987 (NSW), you should be satisfied that the person you appoint will act in your best interests.

You can appoint more than one person to act as your enduring guardian – either jointly (together) or separately. You can also appoint alternative enduring guardians in case something happens to your first nominated enduring guardian. For example, people often appoint their spouse and have their children as their joint alternate enduring guardians.

WHAT DECISIONS CAN AN ENDURING GUARDIAN MAKE?

You can give your enduring guardian the discretion to make all decisions for you when you are not able to make them for yourself or alternatively, you can limit your enduring guardian’s functions such as to consenting to certain procedures, limiting their discretion as to the type of nursing home or care facility you want to reside in or requiring specialist consultation or consultation with relatives regarding decisions about your care and treatment.

You cannot give your enduring guardian a function or direction which would require an unlawful act, such as assisted euthanasia. You can provide specific directions regarding turning off life support, ‘do not resuscitate’ orders, assisted ventilation, artificial nutrition and hydration etc.

ENDING ENDURING GUARDIANSHIP

An enduring guardian’s appointment comes to an end when you die or if you revoke the appointment however, you can only revoke it provided you still have mental capacity.

The New South Wales Civil & Administrative Tribunal can review or revoke a person’s appointment as an enduring guardian and can make a guardianship order appointing a new guardian or appointing a representative of the NSW Trustee & Guardian if it is considered that your guardian not making appropriate decisions on your behalf.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any commercial law issues, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

Setting up a new business

Before starting a new business, the first thing that you need to consider is the structure of the entity to operate the business.

There are numerous options to choose from, such as:

  • sole trader;
  • partnership;
  • company; and
  • unit trust.

This is when it can pay to get good accounting/taxation, financial planning and legal advice as there are advantages and disadvantages associated with each type.

WHICH STRUCTURE IS THE BEST?

There is no right or wrong answer to this necessarily, although some are preferred more than others.

To determine the most appropriate structure, you need to consider what is most important for you and your family and things such as what assets/business you already have interests in, whether you intend to be in business with others or you’ll go it alone, how you intend to run the business and whether it is a long term plan or whether you intend to quickly build and sell it.

Each option has different qualities, including:

  • simplicity vs complexity,
  • asset protection vs personal liability,
  • income going to one individual vs ability to minimise tax through income splitting,
  • taxation issues on sale such as CGT exemptions; and
  • business succession planning issues.

OTHER THINGS TO CONSIDER

Once the structure has been determined, and depending on the structure to be adopted, other things that need to be covered off include:

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to starting or buying a business, drafting business documents or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

Merry Christmas

We wish our clients, family and friends a very merry Christmas and a happy new year. Our office is now closed until Monday, 9 January 2017

Superannuation and your estate planning

Did you know that your superannuation does not necessarily form part of your estate when you die? This can cause problems unless it is properly dealt with as part of your Estate Planning.

Your superannuation will not be dealt with in accordance with your wishes (in your Will) unless you have a valid and binding beneficiary nomination in place. The trustees of most funds have discretion as to who to pay benefits to. If you have no dependants, the trustee will likely pay it to your estate, but why take the risk?

Take control of your superannuation death benefits and put in place a beneficiary nomination today.

To avoid applications to the Superannuation Complaints Tribunal or the Supreme Court, make a nomination – they can be binding or non-binding, lapsing or non-lapsing and require formalities such as 2 witnesses etc.

Speak to us about your estate planning and ensure your wishes are properly documented.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

Avoiding dramas at the office Christmas party

Now is the time of year for many businesses to have their annual Christmas parties. Before dusting off your Santa hat, consider your responsibilities in protecting your staff and your business.

Businesses should be aware of the risks that can arise when holding an office party, whether at Christmas or for any other event. Employers can be responsible for the actions of their employees at such events (such as for sexual harassment and the like) and for injuries that arise as a result of such celebrations.

Employees should be made aware that a Christmas party is a work event and that, although it is a time to relax and enjoy themselves, they need to remain responsible and respectful.

HOW TO MINIMISE THE RISKS

To minimise the risks to your business, there are many things you can do, including:

  • Making those members of staff attending aware of their responsibilities and that inappropriate behaviour cannot be allowed;
  • Ensuring responsible service of alcohol – by using a third party venue or hiring suitably trained waitstaff;
  • Having correctly worded Employment Contracts for all employees;
  • Putting in place appropriate Workplace Policies – not just for harassment, intimidation and discrimination, but for social media, taking photographs of others, texting and the like;
  • Reviewing your insurance coverage;

Considering transport arrangements for staff to and from the venue, using a buddy system or inviting partners.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to employment issues or any business or commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

What is a Power of Attorney?

GRANTING A POWER OF ATTORNEY

The Powers of Attorney Act 2003 (NSW) provides for a person to appoint another person as their attorney to make financial and contractual decisions on their behalf. The document granting a power of attorney is a prescribed form under the Act.

general power of attorney does not require a solicitor’s certificate however, it ceases to be of effect if you lose mental capacity (like where you are in a coma or suffer from dementia).

An enduring power of attorney on the other hand continues to be effective if you were to suffer such an incapacity. For this reason, an enduring power of attorney must be explained to you and witnessed by a lawyer who will provide a certificate in the prescribed form. We usually recommend an enduring power of attorney so that if some event happened to you that affected your capacity, your attorney would still be able to assist you.

If you are suffering from any illness, have deteriorating health, are going overseas or interstate or just want peace of mind, appointing an attorney to assist you to manage your affairs is generally a good idea.

HOW DOES IT OPERATE?

The nominated attorney has the ability to decide whether or not to accept that role by signing it.

You can choose when your power of attorney is to take effect. It can be restricted to only take effect if a registered medical practitioner certifies that you are of unsound mind, upon some other event (such as whilst you are overseas), from a date you choose or, it can operate immediately (for convenience).

You can give the power of attorney for specific purpose (for example to assist with the sale or purchase of a specific property or to attend an auction and bid on your behalf), for a specified time (for example, between 2 dates) and you can give directions on how powers are to be exercised (such as not to bid above a certain level or to only sell for a certain reserve price).

You can have a power of attorney for situations of necessity, like where you are ill or absent, or simply for convenience, but you have to appoint someone you trust without reservation.

An attorney may not use the principal’s monies or assets for gifts or benefits to the attorney or third parties unless this is specifically authorised in the document granting the power of attorney

ENDING AN APPOINTMENT

Provided you remain of sound mind, you can revoke a power of attorney at any time by signing a form of revocation and providing the attorney with that revocation.

The New South Wales Civil & Administrative Tribunal can review or revoke a person’s appointment as a power of attorney and can make a financial management order appointing a new attorney (or attorneys) or by appoint a representative of the NSW Trustee & Guardian if it is considered that your attorney not making appropriate decisions on your behalf.

DO I HAVE TO REGISTER THE POWER OF ATTORNEY?

A power of attorney must be registered at the Land & Property Information Division of the New South Wales Department of Lands if it is being used for dealing with land in NSW, such as selling, transferring, mortgaging property and the like.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

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