Probate

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.

in Estate Planning / Probate / Superannuation / Tax Planning  by 14 Dec 2016 0 comments

Planning on giving money to your kids?

THERE ARE BETTER WAYS TO HELP YOUR KIDS THAN A GIFT

Most parents want to give their kids a headstart in life. Often, this takes the form of money for a car or a deposit for a first home.

Have you considered what would happen to that money if your son or daughter either:

  • broke up with their partner,
  • passed away; or
  • ran into financial difficulties or became a bankrupt?

There are better ways to help your kids than a simple gift of money – protect it so it can continue to be used for their benefit even if they get into financial trouble.

If you give money to your kids, it won’t automatically come back to you if any of those things happen

  • on their separation or divorce, it would be an asset of their relationship and be available for distribution between your son or daughter and their partner under the Family Law Actor the Property (Relationships) Act.
  • on death, those funds will flow to their beneficiaries as stated in their Will (or if they don’t have a Will, in accordance with the laws of intestacy).
  • on bankruptcy, their trustee in bankruptcy will be able to use those funds to pay themselves and any creditors.

In order to protect against these types of events, the advance needs to be documented as a loan. In the absence of such a document, the “presumption of advancement” applies because of the relationship of parent and child and it will be considered a gift.

If your child died, got into financial strife or had matrimonial issues, the loan could be called in – and would be available to lend again once things had settled.

Ideally, in addition to a Loan Agreement, some form of security for the loan could be provided, such as a Mortgage or Caveat over land or a Security Interest registered on the Personal Property Securities Register.

FURTHER INFORMATION

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

 

in Estate Planning / Probate / Tax Planning  by 20 Sep 2016 0 comments

So what actually is Probate?

WHAT IS PROBATE?

An application for Probate ought generally to be made with the Supreme Court within 6 months of the date of a person’s death. If more than 6 months has elapsed, the Court may require evidence in the form of an affidavit explaining the reasons for the delay.

Many entities that record asset ownership (such as the Department of Lands, banks, aged care facilities and share registries) will not release or transfer the assets of a deceased estate until Probate is obtained. If real property (land) is involved, a Grant of Probate will be required.

HOW DO YOU APPLY FOR PROBATE?

Probate is obtained by the executor making an application to the Supreme Court. Documents including a Summons, Inventory and Affidavit of Executor are filed and various notices are published. Most people use a lawyer to do this for them.

If the executor’s application for probate is approved or granted, the executor is given a sealed document called a “Grant of Probate”.

If a deceased person does not leave a Will, their estate is not administered after obtaining a Grant of Probate however, a similar document called “Letters of Administration” can be obtained by family members, such as a surviving spouse or children. The estate is then distributed as governed by the laws of intestacy – a statutory formula for how a person’s estate is divided if they don’t have a valid Will.

IS PROBATE NECESSARY FOR JOINT ASSETS?

If the deceased person owned assets jointly with other people (such as a spouse), probate is not required to deal with those particular assets because, at law, those assets pass to the surviving joint owner immediately on the other joint owner’s death.

Where a deceased estate comprises only of a few assets of small value, it is common for banks and the like to dispense with the requirement to obtain a grant of probate provided that the executor provides an indemnity for any claim made by others for wrongly releasing the asset.

WHAT HAPPENS AFTER PROBATE?

After a Grant of Probate is obtained, the executor can get in all of the deceased’s assets, pay any estate liabilities and distribute the estate as required by the Will, subject to there being no unsatisfied claims by creditors or family members such as those under the Succession Act 2006. Often distribution takes place around 12 months after death.

WHAT DOES IT COST?

There are 2 aspects of dealing with an estate and the costs for each part are charged separately: the first part is the cost of obtaining Probate or Letters of Administration; the second party is actually administering the estate as required by the Will.

The cost of applying for probate is determined and fixed according to a scale set out in Schedule 3 to the Legal Profession Uniform Law Application Regulation 2015, with the cost being calculated by applying the statutory formula to the total value of the estate.

The costs of administering the estate after probate (selling or transferring the assets) are not capped, are usually charged at hourly rates and an estimate of costs should be provided.

FURTHER INFORMATION

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

in Estate Planning / Probate  by 15 Sep 2016 0 comments
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