Archive for the ‘Wills and Estates’ Category

Estate planning for blended families

Most of us appreciate the importance of making a Will and having an estate plan that sets out how we would like to provide for our loved ones when we die.

If, like many Australians, you belong to a blended family, there are additional considerations when planning your estate. Most typical will be ensuring that the competing interests of children from past and present relationships are addressed, whilst ensuring a current partner is provided for.

Following are our top estate planning considerations for members of a blended family.

Make a family tree and identify potential issues

Because of the complexity of some blended families, the importance of making a family tree cannot be over-emphasised. The tree should identify immediate family members, former spouses, children from past and present relationships (biological, adopted and step-children), as well as anybody else who is, or has been, financially dependent on the Will-maker.

Making a family tree helps to:

  • consider the testamentary wishes of each partner and identify those they wish to benefit from their estate;
  • acknowledge the potential for disputes and family provision claims and, as far as practicable, safeguard against these;
  • identify those that may have a moral claim on the Will-maker’s estate.

Look at your major assets

Real estate and superannuation interests are often our most significant assets. Understanding some legal concepts regarding these assets can greatly assist with planning your estate.

Real estate

If you hold real estate as a joint tenant, the principle of survivorship applies. This means that your share of the property will immediately vest in the surviving joint tenant when you die no matter what your Will states.

If this is not your intention, you and your partner may consider severing a joint tenancy and instead holding the property as tenants in common. In this case, either of you may leave your share of the property to whomever you wish by a direction in your Will.

Your lawyer can advise and assist in severing jointly held real estate.

Superannuation

A common misconception about superannuation is that it automatically forms part of your estate. This is not the case. A superannuation fund is only permitted to directly pay a death benefit to a ‘dependant’ of the fund member or otherwise, to the estate.

A ‘dependant’ includes a spouse (including a de facto partner of same or opposite sex), a person with whom the fund member had an interdependency relationship, a child of any age or a person who is financially dependent on the member. A child includes a biological child, adopted child, step child and ex-nuptial child.

Fund members can choose who receives their death benefits by completing a Binding Death Benefit Nomination. This circumvents the trustee’s discretion and directs it to pay benefits to the dependant nominated by the member.

In a blended family, it may be appropriate for fund members to direct the trustee to pay all or some of their death benefits to their child or children to guarantee that they receive an inheritance immediately after they die. In this case members will need to consider whether there will be sufficient funds for the surviving partner as well as the tax implications. Advice should be considered from a lawyer or financial professional.

Consider different types of Wills

An example of a simple Will for a married couple is one that provides for the estate to go to the surviving partner in the first instance and then upon his or her death, to their children. This may not be ideal for blended families as the children of the deceased partner will need to wait until the step-parent dies before inheriting under the Will. There is also a risk that the surviving partner may subsequently change his or her Will to the effect that the children of the partner who dies first miss out altogether.

Different types of Wills can be used to avoid these issues and your lawyer can advise on the most appropriate for your situation. The following are some examples.

Testamentary trust

A testamentary trust is a trust contained in a Will that is created upon the testator’s death. In the case of a blended family, a separate trust can be created for each child which effectively separates assets allowing each beneficiary to receive and deal with their respective share via an appointed trustee (which may or may not be the beneficiary).

Testamentary trusts can also provide for asset protection and have taxation advantages. They are however complex and require ongoing management. Consequently, the benefits should outweigh the costs of creating and administering the trust.

Mutual Wills Agreement

A Will may leave assets to each partner and, on the surviving partner’s death divide the combined assets between all children (from former and present relationships). This may technically be ideal however there is nothing to prevent a surviving partner altering his or her Will after the first partner dies, effectively leaving out a child or children of the first-deceased partner. A Mutual Wills Agreement can help to prevent this.

Essentially, the partners agree on the beneficiaries (for example children from both partners’ past and present relationships) and how their assets should ultimately be distributed. This is reflected in reciprocal Wills and a binding agreement to the effect that neither party will alter his or her Will after the other’s death.

The surviving partner has an obligation to hold the assets on trust for the beneficiaries named in the Will and is bound by that agreement. Those benefiting under the Will should be aware of the agreement so enforcement action can be taken if necessary.

Conclusion

Effective estate planning takes time and careful consideration. Every family is different and there is no one perfect solution. Talking to an estate planning lawyer helps to identify the potential issues that may arise and to devise strategies to address these issues to ensure that your intended beneficiaries are protected when you die.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Wills for blended families

Making a Will is important, particularly if you are part of a blended family. A blended family is a family in which one or both partners have a child or children from a previous relationship. Careful estate planning now should ensure that all of your intended beneficiaries are provided for when you die and that the potential for conflict within the family unit is minimised.

There is no one-fit solution when it comes to estate planning for the blended family. The dynamics and needs within families evolve and personal assets may fluctuate from year to year. However, by identifying the potential issues that might arise within each family unit, and considering some options to address these, an effective estate plan can be accomplished.

The important thing is to discuss your circumstances and objectives with your legal advisor so that your wishes can be properly set out in your Will and other estate planning documents. These documents should be reviewed regularly to take account of changing circumstances.

Competing interests – the common issue

The most typical issues faced by a Will-maker within a blended family are the competing interests of past and present partners, biological children and step-children. The Will-maker is likely to want to look after the current partner and also children from previous relationships. There may also be children of the present relationship and children from the partner’s prior relationship to consider.

Traditionally, a Will for a married couple provides for the estate to go to the surviving partner in the first instance and then upon their death, to the children. This is likely to be inappropriate for blended families – not only must the children of the deceased wait until the step-parent dies before inheriting, but there is a risk that the surviving partner may change their Will so that the deceased’s own children miss out. A further risk is that the assets may over time diminish, leaving little for the deceased’s children.

In some instances, if adequate provision is not made from a deceased estate, an eligible beneficiary may be able to make a family provision claim causing distress, delay and uncertainty during an already stressful time.

The following may provide some helpful suggestions when considering these complex issues.

Immediate gifts and interests in real estate

When making your Will, you may choose to provide an immediate gift to your children upon your death rather than your children waiting to inherit after the death of your partner. A life insurance policy nominating the children as beneficiaries might be appropriate in this instance.

If the estate is significant, the Will could provide for an immediate gift of real estate, money or other valuable asset to the children. This will safeguard against the possibility of your children missing out on an inheritance should your partner later change their Will or your estate assets diminish.

If you and your partner hold real estate as joint tenants, you might consider changing this to a tenancy in common. A joint tenancy means that the share of property held by a deceased tenant automatically goes to the surviving tenant. This cannot be altered by Will. However, if the property is held as tenants in common, your share may be left to your children subject to leaving your partner a life interest in that share of the property.

A life interest will provide your partner a continued right to reside in and use the property until he/she dies at which stage your share will revert to your children. Note however, that life interests can be complex due to circumstances such as health and aging of the surviving partner who may need to downsize or move to an aged care facility. These issues should be carefully considered and discussed with your legal advisor.

Testamentary trust

A testamentary trust is a trust contained in a Will that comes into effect upon the testator’s death. A testamentary trust provides flexibility and control in asset distribution amongst beneficiaries and assists in protecting your assets from third parties and creditors. Assets can be preserved so that they can pass through future generations and the trust can provide for different scenarios.

Testamentary trusts are generally tax effective and may be worthwhile considering in your estate planning if the value of your likely assets warrants the establishment and administrative costs.

Choosing your executor

Your executor is your personal legal representative when you die. He or she has the role of ensuring that the wishes set out in your Will are followed. Your executor will deal with your estate lawyers, accountants, financial advisors and real estate agents. He or she will maintain estate accounts, pay bills and generally oversee the administration of your estate.

Generally, a person’s spouse or child will be nominated for this role. However, because of the dynamics involved in blended families it may be preferable to appoint one or more neutral friends or professionals so that the role may be carried out with impartiality.

Conclusion

These are some important points worth remember when considering estate planning for the blended family:

  • Talk to your partner about your estate planning objectives.
  • List all assets including those held separately and jointly.
  • Consider everybody from the family including spouses, previous spouses, biological and step-children, and identify those whom you wish to benefit – preparing a family tree may be helpful.
  • Contemplate if your choice of beneficiaries might leave open the potential for a family provision claim. You may need to discuss this with your legal advisor.
  • Choose impartial executors.
  • Discuss your objectives with your lawyer so the relevant documents can be prepared.
  • Ensure that you have binding death benefit nominations in place for your superannuation and life insurance policies.
  • Review your Will and plans regularly, and immediately if your personal, health or financial circumstances significantly change.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au

Do you know when to update your Will?

Do you know when to update your Will?

Most people are aware that a valid Will determines how their assets are dealt with after they are gone. Wills generally provide for the appointment of a trusted executor/s and gifts to chosen beneficiaries. They may also appoint guardians for minor children and give direction for specific funeral and burial arrangements.

When to review your Will

Many people make a Will, arrange for it to be safely stored and then forget about it. However, in many situations reviewing your Will is just as important as preparing it, particularly when events occur and your Will no longer reflects your wishes.

Your Will should be reviewed when your personal or financial circumstances change.

The following events might prompt you to review your Will.

Marriage

Generally, the Succession Act 1981 (Qld) revokes a Will upon the marriage of the testator but not provisions of gifts to the testator’s spouse at the time of the testator’s death nor the appointment of that person as executor, trustee or guardian. Similar provisions apply upon the registration of a relationship.

A Will made in contemplation of marriage is not revoked when the marriage takes effect.

If you have married since preparing your Will you should have it reviewed to determine whether it still reflects your wishes. Even if the Will was made in contemplation of marriage to your present spouse, if some time has passed since preparing it, certain other terms of the Will may no longer be desired.

Be aware also that older Wills may fall under previous provisions of legislation and have different effects. As a general rule, Wills older than three years should be reviewed.

Separation

The divorce of a testator revokes a Will to the extent of gifts to the testator’s former spouse, the appointment of the former spouse as executor, trustee or guardian and the grant to the former spouse of a power of appointment. The divorce however does not affect the appointment of a former spouse as trustee of property held for the children of the testator and spouse.

Changes in marital status or relationships should always prompt you to review your Will.

As a divorce will result in some provisions remaining valid and some not, your Will should always be reviewed to take into account your new circumstances.

Note also that many partners are separated for some time before finalising a divorce so your Will should be reviewed once you determine that you and your spouse have separated indefinitely.

Birth of a child

Obviously the birth of a child will warrant revision of your Will to ensure that child is adequately provided for. Your Will can be drafted to distribute assets equally amongst your children, even those born after your Will is made.

Death or ill health of an executor

You may have appointed an executor/trustee of your estate who is no longer alive, aging, mentally or physically unwell, or who has moved away. In these circumstances you might consider appointing a new executor. Your Will can provide for a substitute executor if your appointed executor is unable or unwilling to act. There is no limit to the number of executors you may appoint. Your executors should be capable of administering your estate in accordance with your wishes, which is often carried out under the guidance of a solicitor.

Death of a beneficiary

A gift to a beneficiary who dies before, or within 30 days of the testator, may fail unless a contrary intention is stated in the Will.

If the beneficiary was a child of the deceased then the Succession Act 1981 (Qld) provides that the deceased child’s children will instead take the gift. If the testator has no children and a substitute beneficiary is not nominated the gift falls to the residuary estate. This can have unintended effects.

A Will that nominates a beneficiary who has passed on should be reviewed to ensure that it still has the desired effect.

Disposal of a specific gift

A specific gift is clearly identified and separate to other property of the estate; such as a prestige motor vehicle. If you sell or dispose of such an asset after you make your Will then the gift fails.

The result is that the intended recipient of the gift may receive nothing at all or a much lesser share of the estate than what you intended. This may have a significant effect, particularly if the asset is of substantial value.

Acquisition of interests in a company or partnership

Property owned by a company cannot generally be disposed of by Will however the shares in a company may be gifted. If you acquire an interest in a partnership you should consider what happens to that interest when you die. Most partnership agreements set out what happens when one partner dies and how that partner’s share of the partnership is distributed. New business interests should always prompt reviewing your Will.

Increased wealth, potential challenges to a Will, vulnerable beneficiaries

Your Will may incorporate a testamentary trust to provide for minors, protect beneficiaries under legal incapacity, safeguard beneficiaries’ assets from creditors or family provision claims and provide certain income tax advantages.

If you would like these protective measures incorporated in your estate planning and the value of your assets warrant the administrative and accounting costs of a testamentary trust then it is worthwhile discussing this option with your solicitor.

Summary

Life is unpredictable and change inevitable. For better or worse life changes are likely to impact upon your estate planning. For good measure, you could diarise to review your Will each time your tax return is prepared. Remember that your superannuation, binding death benefit nominations, appointments of power of attorney and enduring guardians also form part of effective life and estate planning. These should also be regularly reviewed.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Can your ex-de facto inherit under your Will?

Once upon a time you were happily living together with your de facto partner. Roses were bought, dinners were cooked, finances were shared and Wills were signed leaving all your assets to the other partner in the event of what you then thought of as the far away time of your tragic passing. Thoughts of either of you dying were such a melancholy distraction from the happiness of your lives together, that you put your Wills away in a bottom drawer and never looked at them again.

Unfortunately, however, there wasn’t a fairytale happily ever after ending to this story. You and your partner decided to take your lives in different directions. Joint bank accounts were closed, furniture and other assets were divided; but all the while, your Wills stayed in the bottom drawer, unread and forgotten. Until one of you died.

What happens now?

Your ex-de facto wants his or her share; your other family members think “They were never married. Why should she/ he be entitled to anything?”. It looks like this might get messy.

Are your other family members right?

Many people think that, because they weren’t married, their ex-de facto has no future financial claim on them or their estate. Some people might also think that if they and their ex-partner have divided up their assets, neither one could have a further financial claim on the other. Unfortunately, those assumptions aren’t always correct.

The laws relating to division of assets after a couple separates are completely distinct from those dealing with Wills and inheritances. A Will is not affected by a family law property settlement, which, of itself, cannot prevent someone receiving a gift left to them in their ex-partner’s Will.

So, can your ex-de facto inherit?

According to a recent Western Australian case, the answer might depend on exactly how you referred to your ex-de facto in your Will.

In Blyth v Wilken the Court considered a situation where, in his Will, the deceased left his assets to his now ex-de facto partner, with the parties having separated some three years before the deceased’s death. Eleven years before his death, and at a time when the couple were living together, the deceased made a Will leaving the bulk of his estate to “my de facto wife Kathrine”. The Will had not been changed after the parties separated.

The Court found that by using the words “my de facto wife Kathrine”, the deceased didn’t merely intend to benefit Kathrine; he intended to benefit Kathrine because she was his de facto wife. Accordingly, the Court found that, notwithstanding what the Will said, the deceased would not have wanted Kathrine to benefit from his estate as she was no longer his de facto wife at the time of his death. The gift to Kathrine, therefore, failed and other family members benefitted from the deceased’s estate.

Would different words have made a difference?

The decision in this case depended on the use of the words “my de facto wife Kathrine” in the deceased’s Will. If the Will had merely referred to Kathrine by name, without also describing her as “my de facto wife”, the outcome could well have been very different. That is, despite separating from the deceased almost three years before he died, Kathrine could have received the bulk of her former de facto partner’s estate.

A word of caution

The case of Blyth v Wilken is only one decision of a single Master (not a Judge). The decision is not binding on the West Australian Supreme Court, nor other Courts, which could come to a different decision on similar facts.

Just because your Will refers to “my de facto partner such and such” that is not necessarily a guarantee that that person will not be able to benefit from your estate in the event that you die after ending your relationship with him or her.

Conclusion

In most Australian States and Territories (NSW, Victoria, South Australia, Western Australia and the Northern Territory), separating from your de facto partner will not change your Will.

Any gift in your Will to your ex-de facto could still be valid, despite the fact that you have separated and divided up your assets. It is possible that, based on the decision in Blyth v Wilken, the Court could overturn a gift in your Will to your former de facto, depending on how that gift was worded.

In the ACT, Tasmania and Queensland, termination of a registered de facto relationship will revoke any gift in your Will to your ex-de facto partner. However, this only applies to registered relationships and registered terminations of them; and in the ACT it only applies to registered same sex relationships.

Regardless of where in Australia you live, the safest course of action is to review, and if necessary change, the terms of your Will as soon as possible after the ending of any relationship, even a friendship.

If, for example, your Will leaves your jewellery to “my friend so and so”, would you still want “so and so” to receive that jewellery if you’ve de-friended each other by the time of your death?

Blyth v Wilken suggests that the jewellery may not end up in your former friend’s hands, but would you want to leave that to chance and to the question of whether a Court would follow the Blyth v Wilken decision?

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Testamentary trust

What is a Testamentary Trust and should I have one

Incorporating a Testamentary Trust within your will can provide significant flexibility along with asset protection and tax minimisation for those who benefit from your estate

What is a Testamentary Trust?

It is a Trust established under a will but it does not come into effect until after the death of the person making the will.

A Trust describes a structure whereby assets are managed by one person (or persons) i.e. a Trustee, for the benefit of others (the beneficiary or beneficiaries).

Under a Testamentary Trust the Trustee has the discretion to distribute capital and income between a group of beneficiaries nominated in your will. We try to include a wide number of potential beneficiaries to give greater flexibility to the Trustee in distributing the capital and income between such beneficiaries.

There is no standard format for a Testamentary Trust and they are adapted to suit the needs of a particular person/family.

What are the benefits of a Testamentary Trust?

There are many benefits as follows:

    1. Flexibility for your beneficiaries

The Trustee may distribute capital and income to any nominated beneficiary at any time and in any proportion. A Testamentary Trust gives the beneficiaries both flexibility and control over when and how they take their inheritance.

  1. Protection of AssetsThe assets form part of a Trust and therefore they cannot be taken out of the Trust without the Trustee agreeing to distribute them to the beneficiaries. None of the assets are legally owned by the beneficiaries which may protect the assets of the Trust from some of the following circumstances:-
    1. Divorce/breakdown in relationship of a beneficiary – if an intended beneficiary is in a “shaky” relationship (such that the marriage or de facto relationship will dissolve in time), then if the assets are held in a Testamentary Trust, they are not classed as assets of any individual and therefore the Family Court cannot make an order requiring the distribution of those funds. In other words the spouse or partner of an intended beneficiary will not reap the benefits of an inheritance.
    2. Creditor protection – to protect the bequest from creditors of a beneficiary. If an intended beneficiary had a number of creditors and/or is likely to be at risk of being made bankrupt, the Will maker can protect the bequest of monies under a will to them so that the inheritance will not be at risk of being required to be given to the Trustee in bankruptcy or creditors.
    3. High Risk Beneficiaries – if an intended beneficiary is in a high risk profession or business where negligence claims are likely, a Testamentary Trust will protect the inheritance.
    4. Will challenges – if an intended beneficiary receives monies in your estate via a Trust then, as it is not in that beneficiaries estate, it cannot be subject to a Will challenge when they die.
  2. Protection of Beneficiaries
      1. Vulnerable Beneficiaries

    (a) Social Security Entitlements – if an intended beneficiary receives a social security entitlement such as a pension or disability support pension, they would be at risk of losing such entitlements if they were to receive a lump sum inheritance and therefore a Testamentary Trust enables them to have monies distributed to them or to others on their behalf to meet their needs from time to time with the effect that they are not at risk of losing their social security entitlements.

    (b) Vulnerable beneficiaries – if one of the intended beneficiaries is either a spendthrift or has gambling/drug addictions, you can provide for such a beneficiary through a Trust ensuring that his/her share of your estate is kept in tact.

    (c) Remarriage of spouse – in this situation the Testamentary Trust is useful for families who wish to provide for their spouse but are concerned that the spouse may remarry and divert the family assets to the new family or, as sometimes happens, uses the family assets in risky or unprofitable ventures at the suggestion of the new spouse.

    1. Taxation Advantages
    2. Taxable income generated by the trust can be allocated to the beneficiaries of the Trust in a tax effective way. Under the Trust, the Trustee has the power to distribute the Trust income to any of the persons nominated as potential beneficiaries under the Trust. Therefore, for example if the spouse, partner or dependant of an intended beneficiary is not working or receiving an income, the Trust may allocate income to such a person (provided they are nominated as a potential beneficiary under the Trust). A child (minor under the age of 18 years) is currently entitled to receive a tax free annual income from a Testamentary Trust of $6000 (this is tax free only if the child has no other income).

Who can be a Trustee of a Testamentary Trust?

Anyone you wish, including the executors of your Will, their spouse or partner or their children. The Trustee has effective control of the Trust, so the Trustee should be a person or persons who the Will maker knows and whom the Will maker Trusts are acting in the best interests of those who will receive the main benefit of either the whole or part of the estate that the Will maker left subject to the testamentary Trust.

It is possible to establish a number of testamentary Trusts under a Will and name different Trustees for each of them.

What should I consider before establishing a Testamentary Trust under my Will?

There will be ongoing administrative costs involved in maintaining a Trust, such as accountancy fees for preparation of Trust taxation returns. Factors that you should consider include whether the income generated by your estate will be sufficient to warrant a Testamentary Trust, whether you have sufficient assets in your estate and whether any of the above apply to one or more of your intended beneficiaries.

If you have any questions or would like to speak with one of our solicitors, please contact us.

Estate Planning & Administration

By its very definition, the word ‘estate’ means the whole of one’s possessions, more particularly, all the property and debts left by one at death.

When added to make the term ‘Estate Planning‘, it means you will attempt to ‘speak from the grave‘, and plan the process whereby your earthly assets are divided/distributed amongst those you deem worthy or in need.

In other words, trying to ensure the chosen beneficiary (the right person/entity) receives the appropriate gift (or asset), so that either the recipient has a great home and/or be looked after, or a share in a business, or other assets, end up in the right hands, so the enterprise may continue.

Whilst sometimes difficult in a corporate setting, it is usually problematic when regarding a family business, because of the emotion that may be attached to any discussions in this matter.

If you are merely discussing cash, furniture, cars, collectables and inanimate objects, that usually comprise someone’s bequest, it is usually a cut-and-dried matter for the testator to gift, in a properly written “Last Will and Testament”.

There are many opportunities to structure your estate planning to make sure your loved ones are looked after.

Our attitudes about what makes up a family have advanced well past the traditional concept of a mum, dad and two kids. The era of blended families and same-sex and single parenting has well and truly arrived. In contrast with our parents’ generation, there are a lot more factors to take into account when making a will.

Willing out of family disputes

While not the most pleasant of financial tasks, making a will with clear instructions and keeping it up to date can save disputes with grieving family members later. It will also give your loved ones certainty and clarity about their financial position.

A solicitor can draft and execute your will, and will likely suggest things you may not have already considered. They may also offer to store your will securely for no extra fee.

If your beneficiaries have more complex family, financial or business needs (for example if your child has a disability or you’re in a family business), a testamentary trust can protect their interests.

These trusts offer flexibility regarding the distribution of income and assets, and this structure may provide tax advantages too.

However, if it is a business, this process becomes a part of another process called ‘Succession Planning’, where likely individuals are tested to see if they have the strength, integrity and fortitude necessary to take over from the founder, or their successors.

Maybe the identified successor doesn’t have the necessary skills, and must be groomed, mentored, educated and tempered over a period of time. When that time passes, maybe this individual does not yet measure-up, and must stay in a sub-ordinate role until ready.

This may mean a search for others within the business, or an outsider, to come in and to continue the mentoring role until the person is ready.

There may be no likely family member. Maybe the best option is to sell to the staff as a Management-Buy-Out (MBO); or a Management-Buy-In (MBI), where you sell to a team from the outside. It may be a Leveraged-Buy-Out or a Leveraged-Buy-In. These deals are usually done with a higher, or lower , level of equity and/or debt, respectively. This is where you may control the process a little. Else, you look for a Trade Sale, where a competitor (looking for larger market-share), or a new entrant buys the business.

In this way, the business goes out of the family and the cash and other assets realised, may go where directed/needed.

However, if the business will stay in the family, in whole or in part, maybe a Corporate Will is necessary to ensure the right people receive the correct share holding.

If any of the above resonates with you, and you need to understand more, come in for a conversation with me, about what the options are for you, and a Lawyer with commercial nous will be contacted if necessary or appropriate, to take matters to the next level, and document the process.

Regardless, as individuals, please ensure your Will has been revised by your lawyer, to ensure it is current; at least within the last five years, preferably three.

You should review and change the plan whenever you circumstances change, such as:

  • You get married, divorced, begin living with or separate from a partner;
  • You have children, or they pass away;
  • You set-up, buy or sell a business;
  • You incorporate a company;
  • You set-up a trust;
  • If you have family members with special needs;
  • If you have a change in superannuation;
  • If you buy real estate or other valuable assets.

Other matters to consider are as follows:

  1. Have you planned to give your organs as a Donor to the transplant program?
  2. Have you discussed your wishes with your family members?
  3. If any dependent children under the age of 18-years old know with whom they will live in the event of your passing?
  4. Do you have a current and valid will?
  5. Have you appointed Limited and/or Enduring Powers of Attorney?
  6. Do you have a suitable executor, and have you spoken to this person(s) to tell them of their responsibilities?
  7. Do you have a plot to be buried in?
  8. Are there explicit instructions regarding your funeral?
  9. If you have a Self-Managed Super Fund, do you understand the effects to this structure, and the assets held within, upon your passing?
  10. Have you made a Binding Death Nomination in regards your superannuation; either to the estate or individual dependents?
  11. Should you set-up an actual Testamentary Trust for each dependent, like an Endowment, to look after their needs until age 25?
  12. Do you want to make an in-specie or cash gift to a particular charity?
  13. Do you understand the income and capital gains tax implications of your passing

What happens if someone makes a claim on your estate? Who might do this? How successful may they be?

The above is not an exhaustive list of the types of scenarios required to be considered in your estate plan. Estate Planning is more than just a will!

If you have any questions or would like to speak with one of our solicitors, please contact us.

Advanced Health Directive

An Advance Health Directive enables you to give directions about your health care in circumstances where you cannot personally tell your doctor or your family.

Every competent adult has the legal right to accept or refuse any recommended health care. This is relatively easy when people are well and can speak for themselves. Unfortunately, during severe illness people are often unconscious or otherwise unable to communicate their wishes—at the very time when many critical decisions need to be made. By completing an Advance Health Directive, you can make your wishes known before this happens.

What is an Advance Health Directive?

An Advance Health Directive is a document that states your wishes or directions regarding your future health care for various medical conditions. It comes into effect only if you are unable to make your own decisions.

You may wish your AHD to apply at any time when you are unable to decide for yourself, or you may want it to apply only if you are terminally ill.

Can anyone make an Advance Health Directive?

Yes, anyone who is over eighteen years of age and is capable of understanding the nature of their directions and foreseeing the effects of those directions can generally make an Advance Health Directive.

What do I need to consider before making an Advance Health Directive?

You should think clearly about what you would want your medical treatment to achieve if you become ill. For example:

  • If treatment could prolong your life, what level of quality of life would be acceptable to you?
  • How important is it to you to be able to communicate with family and friends?
  • How will you know what technology is available for use in certain conditions?

It is strongly recommended that you discuss this form with your doctor before completing it. In addition, a doctor must complete Section 5 of the form.

The purpose of an Advance Health Directive is to give you confidence that your wishes regarding health care will be carried out if you cannot speak for yourself. However, a request for euthanasia would not be followed, as this would be in breach of the law. Under the Queensland Criminal Code, it is a criminal offence to accelerate the death of a person by an act or omission. It is also an offence to assist another person to commit suicide.

Can I cover all possible health-care decisions in this form?

No, it would not be possible to anticipate everything. However, if you wish, you can give someone enduring power of attorney to make health-care decisions on your behalf. If you have already given someone enduring power of attorney for personal/health matters, all you need to do is discuss this directive with that person and complete Section 6 when you come to it.

If you have not yet appointed anyone and you wish to do so, you will need to complete Section 7 of this form when you come to it.

You may also wish to give someone enduring power of attorney for financial matters in case you need someone to manage your property or money, e.g. if you are in a nursing home. If you wish to do that, you will need to complete a separate enduring power of attorney form.

Can I change or revoke my Advance Health Directive?

Yes, your wishes as stated in an Advance Health Directive are not final; you can change them at any time while you remain mentally capable of doing so. It is wise to review your AHD every two years or if your health changessignificantly.

If you do want to make changes to your directive, you should destroy the current one and make a new one.

You may also totally revoke your directive at any time. This must be done in writing, but no specific form is required and the person witnessing your signature does not need to be a justice of the peace, commissioner for declarations, lawyer or notary public. If you have any questions or would like to speak with one of our solicitors, please contact us.

Power of Attorney

It is important that someone else can look after your affairs if you cannot do so (eg you are overseas, or you lack mental capacity) whether for a short time (eg you are ill), or permanently ( eg because you have dementia or you are in a coma). An Enduring Power of Attorney continues to be in force after you lose capacity and can provide the Attorney with wide or limited powers.

What does a power of attorney do?

A power of attorney is a legal document in which you can appoint someone to act on your behalf in your financial matters such as payment of bills or legal matters or in some cases your personal matters such as where you live and other day to day affairs or health matters.

When you appoint somebody you are called the donor or principal and the person appointed is called a donee or attorney. A power of attorney does not give the attorney the right to execute a will on behalf of the donor, or to vote on behalf of the donor.

What is a general power of attorney?

The general power of attorney is used for financial decisions but not for personal or health decisions. A power of attorney can be appointed for a specific purpose or for a specific period of time eg while overseas or for just the sale of a house or it can be unrestricted. A power of attorney can also be restricted by law (for example an attorney cannot act in certain investments which are governed by the Trusts Act).

The general power of attorney is revoked (cancelled) if:

  • the donor loses the mental capacity to manage their own affairs, or
  • it is cancelled (revoked) by the donor using a document called a deed of revocation, or
  • the donor dies, or
  • the attorney becomes bankrupt, or
  • the attorney loses the mental capacity to act.

What is an enduring power of attorney?

Enduring powers of attorney can cover financial matters or personal matters including some health matters. The other difference is that under an enduring power of attorney, the attorney can continue to act even if the donor becomes mentally incapacitated.

An enduring power of attorney comes into effect on the date it is made for financial matters. In the case of personal matters, it comes into effect on the date of incapacity. If you want it to start on another date you need to specify that in the document.

The following events will end the enduring power of attorney:

  • it is cancelled (revoked) by the donor, using a document called Revocation of an Enduring Power of Attorney, or
  • the donor marries. The power of attorney is revoked unless the donor’s new spouse is also their attorney. If so, then the power of attorney is only revoked for any other attorney they might have.
  • the donor divorces. The power of attorney is revoked to the extent it was given to their former spouse.
  • the donor dies
  • the donor makes a later document such as another power of attorney which is inconsistent with the first document
  • the attorney withdraws by giving the donor a signed notice
  • the Queensland Civil and Administrative Tribunal appoints a new attorney
  • the attorney becomes the donor’s paid carer or health care provider
  • the attorney becomes incapable ie of understanding their decisions and communicating the decisions
  • the attorney becomes bankrupt or insolvent
  • the attorney dies.

Who can be an attorney?

An attorney does not have to be your lawyer. They can be the Public Trustee, Adult Guardian, or a friend or relative provided they are:

    • over 18 years of age and understand the nature of the document
    • not bankrupt
    • not a paid carer or health care provider (does not include a person in receipt of a Carers Pension).

If more than one attorney is appointed, then the document should specify whether the attorneys can act individually or must act together.

Who cannot make a power of attorney?

A person who has an incapacity, which means that they do not understand the nature of the legal document.

The Power of Attorney form?

Powers of attorney must be prepared in the approved form and executed in the presence of an appropriate witness.

A copy of a power of attorney or an enduring power of attorney may be required to be lodged with banks, financial facilities, Centrelink and similar organisations before allowing the attorney to act on behalf of the donor.

A power of attorney must be stamped and registered with Land Titles Office in the Department of Natural Resources if it is to be used for dealing with real estate.

I have been appointed an attorney in an enduring power of attorney for a person (“the principal”) who has lost capacity. Their original enduring power of attorney has been lost. What do I do?

Where possible, you should search your home and business as well as the principal’s home and business to see if you can recover a certified copy of the enduring power of attorney. This includes any safes and safe deposit boxes you may have access to.

Alternatively, you should inquire with the principal’s solicitor, accountant, bank, financial planner or stockbroker to see if they hold a certified copy of the enduring power of attorney in safe custody.

If you cannot recover a certified copy of the enduring power of attorney, and the person has lost capacity, you will need to apply to the Queensland Civil and Administrative Tribunal (QCAT) to be appointed as their attorney. Depending on the complexity of the matter, you may need legal advice.

What are the obligations of an attorney?

The attorney has an obligation to keep the donor’s property separate to theirs and should keep a written record of all dealings with the donor’s affairs. The attorney must act honestly and keep confidentiality.

An attorney takes on serious responsibilities. If they do not observe their responsibilities they may be removed or even convicted of an offence or required to pay compensation.

Anyone who suspects that the power of attorney is not being used properly can inform the Adult Guardian. The Adult Guardian has the power to protect the donor’s interests when the donor is unable to do so. They can require the attorney to provide accounts and details about any decisions that have been made.

An application can also be made to the Queensland Civil and Administrative Tribunal where an attorney is acting improperly. An attorney who does not protect the donor’s interests adequately can be removed.

Is a power of attorney valid interstate and is an interstate power of attorney valid in Queensland?

Powers of attorney are made under state laws and a power of attorney made in one state may not be accepted in another. You should seek legal advice in the state you want to use the Power of Attorney in.

If you have any questions or would like to speak with one of our solicitors, please contact us.

Wills and Estates

Wills

Every adult or married person should have a Will and should regularly consider the contents of their Will, as their circumstances change and particularly when a person marries or separates or has children.

What Is A Will?

A will is a written document in which you state how you want your property distributed after you die. A person who makes a will is called a “testator”. Making a will allows you to choose what happens to your assets after you die. It also allows you to nominate an executor, who is the person responsible for making sure your wishes are met.

What Happens If I Die Without A Will?

If you die without having made a will, you are said to have died intestate. If this happens, your next of kin will have to apply to the Supreme Court for Letters of Administration, which will allow them to distribute your estate in a certain way. If you are the next of kin of someone who has died intestate, you should seek legal advice.

Who Can Make A Will?

You can make a will if you are over 18 years of age and are of sound mind. You must know that you are making a will, understand the nature and effect of the proposed will and that you are distributing your property according to your own intentions.

If you wish to make a will and you are under 18 years and have never been married, you can apply to the Supreme Court. If you are under 18 years and married, you can make a will. Also, if you are under 18 years and are about to be married, you can make a will in contemplation of that marriage. Your will becomes valid when that marriage takes place.

Formal Requirements For Making A Will

The key requirements for a valid will are:

  • the will must be in writing;
  • the will must be signed by the testator at the end of the will;
  • the testator’s signature must be witnessed by two witnesses. (A beneficiary or their spouse cannot witness a will. If they do they will lose their entitlements under that will);
  • the witnesses must sign the will in the presence of the testator and each other.

As the formal requirements for making a valid will must be strictly adhered to, it is recommend that you have your will drawn up professionally.

What Should Be In A Will?

The will should specify that it is your last will and that you revoke any previous wills. It should appoint one or more persons to be your executor/s. Wills often include other requests such as funeral arrangements, preferences for disposal of the testator’s body and the appointment of a guardian to look after the testator’s children. As wills are only meant to deal with property, wishes such as these are not strictly binding on the executor, but can demonstrate the testator’s intention. If a court is asked to determine the residency and guardianship of any children, the testator’s wishes will be taken into account.

Your will should provide for payment of funeral expenses and any debts. It should then state how you want your property distributed, either by naming the item and to whom it is given, or by giving a person a certain amount or percentage of the total value of your property. If your will contains specific gifts, it should also state what is to happen with the residue (remaining assets) of the estate.

Executors

An executor is a person named in your will to look after your estate. An executor must be over 18 years of age. It is easier, although not compulsory, if the executor lives in the same state as the testator. It is also preferable to name two executors in a will. This will be of assistance if one executor dies or no longer wishes to act as executor. When considering people to be your executors, it is preferable to choose someone close to you, trustworthy and of a similar age. These are simple safeguards against possible complications later. If no executor is named in your will, the Supreme Court will appoint an administrator.

Changing Or Updating A Will

Once a will has been signed, there can be no alteration, either by crossing out or writing in new clauses. Alterations such as these will have no effect. The best way to amend or alter a will is by doing so in a separate document called a “codicil”. For a codicil to be valid it must also meet the formal requirements of making a will. In many ways it may be easier to make an entirely new will.

How Marriage Or Divorce Affects Your Will

Your will is automatically revoked, or made invalid, when you get married and on the day you are formally divorced by a court. However, wills made in contemplation of marriage or divorce are valid. If you do not wish to make a will in this way, a new will must be made after you marry or divorce, otherwise you will die intestate.

Contesting A Will

A person may challenge your will on a variety of grounds including that you were not of sound mind, or were unduly influenced or pressured by another person when making your will. Wills can also be challenged if they do not meet the formal requirements for making a valid will.

Another reason for challenging your will is on the ground that you failed to make adequate provision for the proper maintenance and support of a dependant. If one of your dependants expected to be a beneficiary under your will and has been left out, they may be able to make a claim under the Testator’s Family Maintenance Act 1912. This is called a testator’s family maintenance claim (“TFM claim”). The following people are able to bring a TFM claim: your surviving spouse or de facto; your children (including ex-nuptial, adopted and stepchildren); your parents (if you die without a spouse or children); and a divorced spouse who is receiving or entitled to receive maintenance from you at the date of your death.

If you have been left out of a family member’s will and believe you should have received a share of their estate, you should seek legal advice. If you have any questions or would like to speak with one of our solicitors, please contact us.