Probate

Why you should look at your estate planning

There are at least 3 documents you should consider as part of your personal estate planning:

  1. A will;
  2. A power of attorney; and
  3. Appointing an enduring guardian.

A WILL

A Will is a legal document that details who will take care of your assets and distribute them on your death in accordance with your stated wishes. Consider:

  • Who you would want to control your estate if you died?
  • What would happen to your estate if you didn’t have a Will?
  • Who would look after your children until they are adults?
  • That life insurance proceeds, jointly owned assets and superannuation benefits are likely not to form part of your estate on your death.
  • What would happen to your business if you died? Business succession is often overlooked or not adequately dealt with by lawyers in wills.
  • Who would control your family trust if you died? Have you even read the trust deed?
  • How your family could best receive any inheritance from your estate having regard to such things as:
    • their own estate planning; asset protection measures; and
    • tax minimisation issues.

If your Will does not consider the above issues adequately or at all, then your intended beneficiaries could be receiving far less from their inheritance than you might hope and paying more tax than is necessary each year after you die.

If you pass away without having a valid Will in place (dying intestate), then your estate will be divided up without regard to your wishes at all.

TESTAMENTARY TRUSTS 

Testamentary trusts can save your family thousands in tax each and every year though income splitting opportunities and also provide a level of asset protection to benefit future generations. See our previous article on Wills with Testamentary Trusts.

POWERS OF ATTORNEY

Who would make decisions about your finances or assets if you were unable to (such as if you are in a coma, are unconscious or suffer from mental incapacity such as dementia)?

You can appoint a power of attorney to be able to manage your affairs. If you do not, the NSW Civil & Administrative Tribunal (NCAT) can appoint a person that you do not know to control your assets and make decisions for you.

APPOINTING AN ENDURING GUARDIAN

Who would make decisions regarding your medical and dental treatment and where you live if you are permanently or temporarily incapable of doing so?

If you don’t nominate somebody as your enduring guardian, then NCAT can appoint a person to make those decisions, which can include what medical treatment you get or if life support is not maintained.

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.

in Estate Planning / General / Probate / Tax Planning  by 07 Mar 2017 0 comments

Deceased estate litigation

Succession Act claims

We are often called upon to advise clients in relation to claims on estates in relation to such things as challenging the validity of the Will (such as due to lack of mental capacity when the deceased person made the will or duress) or what is known as a Succession Act claim or a family provision claim (where a person says that adequate provision was not made for them in a Will). We discuss the latter here.

The purpose of the Succession Act is to seek to ensure that “adequate” provision is provided from a deceased’s estate to the family members of a deceased person (and others). Claims under the Act are based on needs.

Important facts

  • Claims must be made within 12 months of the date of death of the deceased (although in limited circumstanced, this time limit can be extended).
  • To make a claim, you must first establish that you are an “eligible person”.
  • Assuming you are an “eligible person”, you must demonstrate needs beyond the provision that was made for you in the Will (if any) for your proper maintenance, education or advancement in life.
Who is an eligible person?

Those who are eligible to make a claim for a provision out of deceased estate include:
  • A spouse of the deceased at the time of the deceased’s death;
  • A person in a de facto relationship with the deceased at the time of death
  • Children (including adopted children) of the deceased;
  • Former spouses of the deceased;
  • Someone with whom the deceased was in a close personal relationship* at the time of their death;
  • Those who have, at any time, been wholly or partly dependent upon the deceased:

– were either a grandchild of the deceased; or

– were, at any time, member of a household of which the deceased a member.

* A “close personal relationship” is a relationship other than a marriage or a de facto relationship between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care but not for reward or on behalf of another person or organisation.

What is involved?

To make a claim, the proceedings are usually commenced in the Supreme Court by way of Summons and evidence will be required in an affidavit setting out the nature and history of the relationship, contributions made to the deceased’s property and wellbeing, details of your financial need and any other relevant factors.

Simply having financial needs and showing some level of dependence on the deceased is not the end of it. The Court will have to weigh up many other factors, such as the size of the estate, the deceased’s wishes (such as those stated in a statement of testamentary intention or other similar document), competing claims from others, circumstances and events that may tend to dis-entitle a person from a benefit and so on.

Time and costs involved

Litigation is a lengthy and time-consuming process and it is an emotional one with family relationships being strained by what may be contained in affidavits or said in the witness box at a hearing. That said, often the estate pays the costs (or a large proportion of them) involved in such cases so it may not be a financial burden to enforce your rights.

Most cases settle prior hearing and usually at a mediation that can be arranged by the Court or by private agreement between the parties. Settlement is often advised to avoid the risks, costs (and emotional cost) of litigation and to help preserve any family relationships.

Often we act for the executors of an estate, but we also act for beneficiaries and those that are not mentioned in Wills at all.
Further information

If you would like any more information in relation to Wills, deceased estate litigation or estate planning/business succession issues generally, please contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au
in Dispute Resolution / Estate Planning / General / Litigation / Probate / Trusts  by 15 Feb 2017 0 comments

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