Estate Planning

Does marriage, separation or divorce affect my Will?

This blogpost is limited to New South Wales as the laws in each State and Territory differ in relation to these matters.

Marriage

If you get married after you sign a Will, the Will is revoked unless it is specifically stated to have been made in contemplation of that particular marriage taking place.

Marriage will not affect a gift to the person who is your spouse at your date of death or their appointment as your executor.

Entering into a defacto relationship does not have the same impact on a Will as a marriage, but this can give rise to other rights as regards the property of the relationship whilst the parties are alive (and claims in relation to the division of the estate on their deaths).

Divorce

Subject to the contrary intention being expressed in a Will, if you divorce after you make your Will, it only revokes or cancels any gift to a former spouse and their appointment as executor.

It will not however cancel their appointment as trustee of property left on trust for beneficiaries that include children of both you and your former spouse.

Separation

If you don’t update your Will after you separate, your spouse may inherit any property you left to them and they can still be the executor of your estate if named as such in theWill.

The take away

If any time your circumstances change (such as a birth or death in the family, a marriage, separation or divorce or a material change in finances for the better or the worse) you should consider whether your estate planning documents require any updates. It may be that no change is necessary, but it at least should be considered.

FURTHER INFORMATION

For further information in relation to Wills and estate planning, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Am I entitled to a copy of a Will?

At a very emotional time, often there is confusion as to what rights and obligations exist in relation to obtaining a copy of someone’s Will.

Many clients ask us “Am I entitled to a copy of a Will?” or “Do I really need to give them a copy of the Will?

It should go without saying that no-one is entitled to see the Will of a person who is still alive! After death however, the Succession Act 2006 (NSW) provides that any person who has possession or control of a Will of a deceased person must allow any one or more of the following persons to inspect or to be given copies of the will (at their own expense):

“(a) any person named or referred to in the Will, whether as a beneficiary or not,
(b) any person named or referred to in an earlier Will as a beneficiary of the deceased person,
(c) the surviving spouse, de facto partner or issue of the deceased person,
(d) a parent or guardian of the deceased person,
(e) any person who would be entitled to a share of the estate of the deceased person if the deceased person had died intestate,
(f) any parent or guardian of a minor referred to in the Will or who would be entitled to a share of the estate of the testator if the testator had died intestate,
(g) any person (including a creditor) who has or may have a claim at law or in equity against the estate of the deceased person,
(h) any person committed with the management of the deceased person’s estate under the NSW Trustee and Guardian Act 2009 immediately before the death of the deceased person,
(i) any attorney under an enduring power of attorney made by the deceased person,
(j) any person belonging to a class of persons prescribed by the Regulations.”

As you can see:

  • there are a number of persons that have a right to a inspect or to be given a copy of the Will; and
  • the executor or person with possession or control of a Will (which could include a lawyer or firm that holds it in safe custody) have an obligation to provide a copy on request.

Of course, there needs to be proof provided that the person who made the Will has in fact died – ie, provide the death certificate (which usually happens via the executor or next of kin).

The purpose of this access to the Will is partly to allow an persons with a claim on a deceased estate to know if they have been provided for in the Will, that it is the deceased person’s latest Will and who the executor is.

There is sometimes also confusion as to the effect of clauses in Wills that provide for the appointment of a particular person or firm as the estate’s lawyers for the purposes of obtaining probate. The executor is free to choose whichever lawyer or firm they wish to act for them in obtaining probate and assisting with the administration of a deceased estate.

The Probate and Administration Act 1898 provides that the Will of the deceased, once admitted to probate, is a public document and that anybody is entitled to apply for a copy of it from the Supreme Court of New South Wales  (and paying the relevant fee) however, it is generally best to contact the person in possession of the document for a copy, before approaching the Supreme Court.

FURTHER INFORMATION

For further information in relation to Wills, Probate, estate planning or even International Wills, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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What is an Advance Care Directive?

Many people, when thinking of their estate planning arrangements, will have at least thought about:

  • making a Will to direct how their assets in their estate will be distributed on their death
  • putting in place an Enduring Power of Attorney to manage their financial affairs they become unable to do so
  • appointing an Enduring Guardian to make decisions about their healthcare, accommodation and lifestyle if they cannot

but often, they will never have heard of an Advance Care Directive or a ‘Living Will’.

So what is an Advance Care Directive? An Advance Care Directive is a way inform others of your specific wishes in relation to your future care and treatment and identifying steps that you do and/or do not want taken if you become medically incapacitated and cannot state these wishes for yourself.

It is best to put these wishes down in a document and have it witnessed or signed, but it can be verbal.

An Appointment of Enduring Guardians and an Advance Care Directive are complementary powers and there is often no need for an Advance Care Directive at all if the functions of the Enduring Guardian are stated broadly or if there are specific directions given to the enduring guardian in the document appointing them (an Advance Care Directive can be part of the Appointment of Enduring Guardians).

The appointed guardian (and any medical practitioners) must act in accordance with any known Advance Care Directive unless it is clearly revoked or replaced by the directions in Appointment of Enduring Guardians.

People’s views on matters like life support, assisted ventilation, resuscitation, artificial nutrition/hydration and palliative care can, and often do, change over time so documents like Advance Care Directives should be updated when necessary so as to reflect a person’s most current wishes regarding their medical treatment.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to Advance Care Directives, estate planning, aged care issues, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Coronavirus: Remote witnessing of legal documents

On 22 April 2020, the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) came into effect.

The effect of the Regulation is that the signing of legal documents in New South Wales such as Wills, Powers of Attorney, Deeds, Agreements, Appointments of Enduring Guardians, Affidavits and Statutory Declarations can be witnessed by audio visual link, rather than having to be physically present, as is normally the case – that is the law (during the COVID-19 pandemic) now allows the remote witnessing of legal documents.

Some documents have other additional requirements, like Wills which require 2 witnesses, not just one, as is provided for in s.6(1)(c) of the Succession Act 2006 (NSW).

Audio visual link includes Zoom, WhatsApp, Skype, HouseParty, FaceTime and the like.

The witness must sign the document either:

  1. by signing a counterpart of the document as soon as practicable after witnessing the signing of the document; or
  2. if the signatory scans and sends a copy of the signed document electronically, the witness may countersign the document as soon as practicable after witnessing the signing of the document.

The witness must endorse the document, or the copy of the document, with a statement that specifies the method used to witness the signing and that the document was witnessed in accordance with the Electronic Transactions Regulation 2017.

All copies of the document should be stored together so they can be read as the one document.

The Regulations do not change what documents may or may not be executed electronically in NSW – only how documents may be witnessed and attested.  The Regulations also do not affect the laws or requirements of any other jurisdiction, including the Commonwealth (such as company execution of documents under the Corporations Act 2001 (Cth).

Under the COVID-19 Legislation Amendment (Emergency Measures) Act 2020 (NSW), the Regulation were to operate for a maximum period of 6 months from 22 April 2020 however, on 18 September 2020, the Stronger Communities Legislation Amendment (COVID-19) Regulation 2020 came into effect such that, among other things, the operation of the electronic witnessing regulations was extended to 26 March 2021.

Similar regulations are in place in the other States and Territories, such as Queensland’s Justice Legislation (COVID-19 Emergency Response – Wills and Enduring Documents) Regulation 2020 (Qld).

FURTHER INFORMATION

For further information in relation to legal issues arising from Coronavirus, if you had previously held off arranging documents such as for your estate planning due to not wanting to attend our office physically due to social distancing concerns or if you need to discuss how to best to arrange signing of documents under the Regulation, please contact us on (02) 9521 2455 or email help@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice.

Please contact McKillop Legal to discuss your legal concerns or objectives.

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COVID-19: McKillop Legal remains open for business

McKillop Legal remains open for business and is fully operational despite the significant and unprecedented challenges facing our families, the Australian economy and our way of life as a result of the Coronavirus/COVID-19 pandemic.

We remain open for business and available to provide advice either by telephone, email or other services (and, if necessary, in person, abiding by the Government’s social distancing guidelines).

Our staff all have the ability to work remotely from home or in other places using our secure technology infrastructure and systems.

If you or your business has any legal issue it requires assistance with, whether relating to your rights or responsibilities relating to business, shutdowns or employment in relation to the pandemic or in relation to other matters, please call or email us and we will be in touch promptly.

Take care.

International Wills, what are they?

We often have estate planning clients that hold assets in places other than Australia.

Often, those clients will have a Will in the country that they own property in. Others don’t have a Will there or even plan on going back, so they are unlikely to have a Will drawn up that will meet the requirements of that particular country.

A solution to this, and as a means to prevent the need for having multiple Wills in multiple countries (as it is not uncommon to have an Australian Will to deal with Australian assets only and a Will in another country dealing with assets in that country only), is to put in place what is known as an “International Will”.

The Australian Government acceded to the Convention Providing a Uniform Law on the Form of an International Will 1973, which entered into force for Australia on 10 March 2015 and all states and territories of Australia have passed legislation to give effect to the Convention.

The Convention was developed by the International Institute for the Unification of Private Law (UNIDROIT) to harmonise and simplify proof of formalities for Wills that have international characteristics and resulted in a uniform law introducing the International Will.

An International Will, where signed in accordance with the requirements of the Convention, is recognized as a valid form of Will in all countries that are party to the convention.

They are not for everyone though, and there may be very good reasons for not using an International Will and using a more specific Will in each country.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to International Wills, estate planning and dealing with assets outside of Australia, please contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

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No Will – dying intestate

If you were to pass away without leaving a Will, then your estate will not necessarily pass to the people that you may wish to benefit.

Dying without a Will in place is called dying “intestate” and the ultimate beneficiaries of your estate will miss out on important and valuable benefits that could have been provided had you put in place a Will such as asset protection and tax minimisation opportunities like those in Testamentary Trusts.

Making an application to the Supreme Court to deal with the estate of a person who dies intestate is similar to seeking a grant of Probate but it is called applying for “Letters of Administration”. If a Will is left but fails to appoint an executor, it is “Letters of Administration with the Will Annexed” but at least then the Will would explain who you want to benefit following your death.

In addition to the Summons, Inventory of property and Affidavit of Administrator, things that need to be provided to the Court include: proof of enquiry into the existence and whereabouts of any Will; the identity of the deceased’s eligible relatives (death, birth and marriage certificates); proof of notification of the application to interested persons; an affidavit regarding the relationship status of the deceased; and possibly provision of an administration bond.

The reason for this evidence of a spouse/domestic partner is that the law provides for a formula as to how an intestate estate is to be divided and a lot depends on the marital relationship of the deceased.

Chapter 4 (sections 101-140) of the Succession Act 2006 (NSW) provide that the statutory order of inheritance in relation to an intestacy is:

RELATIVES LEFT

​ENTITLEMENT

A spouse and no children

The spouse is entitled to the whole of the estate.

A spouse and child(ren) from that relationship

The spouse is entitled to the whole of the estate.

A spouse and child(ren) from a that (or a previous) relations​​hip

The spouse is entitled to receive:

  • the personal effects of the deceased;
  • a statutory legacy of $350 000;* and
  • half of the residue of the estate.

The spouse also has a ‘right to elect’ to acquire property from the estate.

All of the deceased’s children, including children^ from previous relationships and from the current spouse (whether they are from a previous relationship or from the spouse) are entitled to equal shares of the other half of the residue.

Multiple spouses

The spouses are entitled to equal shares of the estate (unless varied by Order or agreement between them). There may be more than one spouse if the deceased was married and had one or more domestic relationships/de facto spouses. Children get nothing in this case.

Children only (no spouse)

The children are entitled to equal shares of the estate. If a child of the deceased has already died leaving children (ie, the deceased’s grandchildren), the grandchildren are entitled to their parent’s share in equal shares.

No spouse or children

The deceased’s parents are entitled to equal shares of the estate.

No spouse, children or parents

The deceased’s full and half blood brothers and sisters are entitled to equal shares of the estate.

No spouse, children, parents, brothers or sisters

The deceased’s grandparents are entitled to equal shares of the estate.

No spouse, children, parents, brothers, sisters or grandparents

The deceased’s full and half blood aunts and uncles are entitled to equal shares of the estate.

No spouse, children, parents, brothers, sisters, grandparents, aunts or uncles

The deceased’s first cousins are entitled to equal shares of the estate.

No spouse, children, parents, brothers, sisters, grandparents, aunts, uncles or cousins

The State government is entitled to the whole of the estate.

* Adjusted by CPI. If this amount is not paid within 1 year from the date of death, the spouse is also entitled to receive interest on this amount.

^ Children who are not legally the children of the deceased (eg, step children) are not included. Adoptive children are included.

Special rules also apply in relation to indigenous persons.

FURTHER INFORMATION

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

This information is general only and is not a substitute for proper legal advice.

Please contact McKillop Legal to discuss your needs. Stay up to date – LinkedIn Facebook Twitter

Can you just put a caveat on someone’s house?

If you are owed a substantial sum of money by someone, whether because you have loaned them funds or if you have a bill that hasn’t been paid, you would generally like to secure those funds. This way, if the borrower or debtor ends up being a bankrupt or insolvent, you may be in a better position as a secured creditor to those that are unsecured and hopefully you can get paid.

So how does security work? Security is effectively giving notice to the world that you have a claim on that person’s estate or assets so that subsequent people or businesses dealing with the same person are aware that you are to be paid in property, ie before them.

Security can be given in several ways, including:

  • handing over physical possession of certain assets;
  • the granting of  a Security Interest over assets registered on the Personal Property Securities Register (or “PPSR”); or
  • perhaps granting a Mortgage over real property owned by the person owing the money.

The registration of securities grants priority in order of registration, so it is important not to delay in registering any securities granted.

Ordinarily, you would have put in place a Loan Agreement or had Terms of Trade in place to govern your business relationship so that you have the express written consent to do such things to secure the debt, but if these documents are not in place before the financial obligation arises, people often take the step of lodging a caveat on title to property owned by the debtor.

A Caveat registered on title to a property has the effect (subject to the specific wording of the caveat of course) of preventing the owner or registered proprietor of that land from dealing with that land without the consent of the person who lodged the Caveat (the “caveator”). Dealings that can be prevented include lodging other Mortgages, lodging Transfers and the like.

Can you just put a caveat on someone’s house? If only things were that simple!

Many people have taken the step of lodging a Caveat on title to a debtor’s property only to have been unsuccessful in protecting their debt. Why? Well, in order to lodge a caveat (or even a Mortgage or PPSR Security Interest for that matter), you need to have the relevant asset “charged” in your favour with payment of the relevant debt. Creating a “charge” over an asset creates an interest in that asset that allows you to lodge a Caveat to notify and protect that interest.

A Caveat is not a document that gives you priority over previously registered interests, but it does give you some control over the asset such that you can prevent refinancing or a sale of an asset unless satisfactory arrangements for you to be paid have been made as part of that process  Properly drafted documents in relation to the lending of funds or business agreements where credit is extended should include things such as Mortgages, General Security Deeds or other things that create an interest in the asset sufficient to lodge a Mortgage, on title (to land), a Security Interest (on the PPSR in relation to assets etc) or at a minimum a Caveat over land.

Without such an interest being created, the caveator runs the risk that the owner can’t sell or refinance and suffers financially, then pursues the caveator for damages flowing from the caveator’s wrongful act, putting the caveator in an even worse position than they were before!

These things should not be done without proper advice, so take the time to review your current situation and documents now before a problem arises and have the documents updated to best protect you or your business.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to debt recovery, loan agreements, estate planning, any business-related matter or if you have a Caveat lodged on your property without your consent, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

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Contract to Make Mutual Wills

A Contract to make Mutual Wills is an agreement between 2 parties (usually a husband and wife, but can be a same sex couple or a de facto couple) to make Wills in an agreed form.

Usually, they provide that the parties may not act such that those Wills don’t get given effect to, such as:

  • revoking or destroying the Will;
  • making a new Will; or
  • disposing of assets so that they do not pass to the agreed beneficiaries

without the consent of the other party (or the executors/administrators of their estate  if they have died).

Often they are put in place when the parties have had a prior marriage or marriages and there are children of the prior relationship/s and the current relationship.

The benefit of such contracts (or deeds as they often are) is that the parties can take some comfort in providing for the other during their lifetimes (for example by gifting their entire estates to each other in their Wills), but with the overall distribution of their combined estates (on the death of the last of them) passing as agreed in the Wills made pursuant to the document.

Where a party breaches the agreement (such as by changing their Will), that party (or their estate) may be sued by the other party (or their executors/administrators if they have died) for breach of contract.

Whilst mutual Wills can be an effective estate planning tool, they are not for everyone and they can cause unintended complications due to their inflexibility, particularly around subsequent marriages, children and unexpected events following the death of a party.

As with most things, there are also other options or alternatives to consider to get a similar result, including creating life interests in real estate or establishing trusts.

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.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your estate planning needs.

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The difference between joint tenants and tenants in common

You own property with another person and you are in the process of making a Will.

Of course, you want your interest in the property to go to your intended beneficiaries.

Your solicitor asks you if you own the property as “joint tenants” or as “tenants in common“. You stop and think…

Until now, you had no idea that there was any difference between joint tenants and tenants in common and had probably never considered it.

The concepts are the same for any asset, but are more commonly used in relation to land. So what is the difference?

What is tenants in common?

The simplest way to think about owning real estate (or real property) as tenants in common is that each owner has a legal interest in the land in a defined or specific share or proportion.

For example, the phrase “as tenants in common in equal shares” means that each owner has an equal interest in the land (so in the case of 2 owners, they each hold a 50% interest and in the case of 3 owners, they each hold a 1/3 interest).

Where property is owned as tenants in common but in unequal shares, the proportion of ownership is specifically stated (such as “John Smith as to 1/4 share and Bob Brown as to 3/4 share as tenants in common”).

With tenants in common, each owner (subject of course to any Co-Ownership Agreement or encumbrance such as a Mortgage or Caveat) may freely transfer or dispose of their share of the property, including in their Will when they die.

On their death, their interest in the property will be included in the inventory of property annexed to the grant of Probate or if they don’t have a Will, annexed to the grant of Letters of Administration.

What does joint tenancy mean?

Joint tenants however each own the whole of the relevant asset. The concept is that the co-owners’ ownership of the asset overlaps such that on the death of one joint tenant, the remaining joint tenant/s will continue to hold the whole of the asset. This is known as the “right of survivorship“.

A deceased joint tenant’s interest in the property does not form part of their estate and is not available for distribution to the beneficiaries of that person’s Will. Often this is overlooked by those drafting Wills.

The same principles apply to bank accounts held jointly.

It is for this reason that most married couples (or those in longer term relationships) hold their property or at least their principal place of residence as joint tenants. There are however, sometimes good reasons for holding property differently as part of an overall Estate Plan. Blended families for example often necessitate this right of survivorship not being given effect to so as to more fairly distribute their estate on their death.

Other situations where a joint tenancy may be appropriate for those not in a relationship like marriage is a Lease by parties to a Partnership – the death of one partner would then not necessarily affect the continuation of the Lease.

Severing a joint tenancy

If you hold property as joint tenants with another person it is possible to sever the joint tenancy – which then converts it to a tenancy in common in equal shares.

This can be done unilaterally by lodging the appropriate documentation at NSW Land Registry Services (formerly NSW Land & Property Information and the Land Titles Office) and is often done by lawyers when parties to a marriage or de facto relationship no longer wish for the other party to own the entire property on their death, such as when they separate or get divorced.

Mixed tenancies

It is also possible to have a combination of both a “joint tenancy” and a “tenancy in common“, such as where a property is owned by 2 families. For example,  a husband and wife may own one half of the land but they own it jointly as between them (so that if one passes away, the other continues to own it) and the brother of the husband owns the other half absolutely.

The title to the property would show “John Smith and Mary Smith as joint tenants as to 50% and David Smith as to 50% as tenants in common”.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, changing the tenancy of a property or documenting a co-habitation or property use agreement, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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