Wills and Estates Archives - Page 2 of 2

May 14

What Happens if You Die Without a Will?

By OMB Solicitors Videos, Wills and Estates

We are often asked the question ‘What happens if I die without a Will?

In this video, Wills & Estates Solicitor Richard Dawson takes us through the issues that arise from not having a will when you die

Contact our Gold Coast Lawyers team for more information on Wills & Estates.

Transcript

Hi, I’m Richard Dawson, Partner of OMB Solicitors and today I’d like to talk to you about what happens if you die without a will. When a person dies without a will or without a valid will, they are called dying intestate.

Under the intestacy laws, a person has to apply to the Supreme Court in Queensland for what’s known as a grant of letters of administration on intestacy. It is the law which says who will be entitled to apply for that grant of letters of administration.

In most cases, it will be the surviving spouse. However, where the spouse may not be able to act, or he or she may be unwilling to act, then it would fall to the children. If there are no children available to act, then there are usually other next of kin, in an order of priority who apply for court.

One way to avoid having to apply for letters of administration is for a person to do a will prior to their death. This is very important and should be done by all adult people. An application to the Supreme Court can be a very costly exercise.

It’s an application to the Supreme Court, It can take several months to obtain, and during that period, there may be a downtime in which the estate can be administered, or worse still, there could be a contest over who actually has the highest right to apply for letters of administration.

Under the intestacy rules, the estate must be distributed in accordance with those rules and not in accordance with the person’s will, because there is no will. In Queensland, the spouse is entitled to the first $150,000 of the estate and the household chattels and depending if there are any children, that spouse would be entitled to either a half or a third of the residuary estate.

If there are no children, then the spouse is entitled to all of the estate. This can potentially create problems because a deceased person may, in fact, have more than one spouse. You could imagine the fights that would erupt where you have an ex spouse and a current spouse feuding over a deceased person’s estate.

This can be easily avoided by doing a simple and straightforward will through your solicitor. If you would like to prepare a will, please contact our office on 5555 0000, or email the estates team at estates@omb.com.au.

May 14

Differences Between Single and Multiple Testamentary Trusts in a person’s Will – Video Part 4

By OMB Solicitors Videos, Wills and Estates

What are the differences between Single and Multiple Testamentary Trusts in a person’s Will?

In Part 4 of our Part 5 series Wills & Estates Solicitor Richard Dawson takes us through those differences of a single and more complex multiple Testamentary Trust Wills.

Contact our Gold Coast Lawyers team for more information on Testamentary Trusts.

See Part 1
See Part 2
See Part 3

Transcript

Hi, it’s Richard Dawson, partner with OMB Solicitors. Today, we’re continuing our five part series on testamentary trusts. Today is part four of that series, and we’re going to be talking about the difference between a single testamentary trust versus multiple testamentary trusts in a person’s will.

Like most estate planning, there is no correct approach and it must be dealt with on a case by case basis. For example, use a will maker who is leaving his estate to three children who are going to be the beneficiaries of the estate.

The first question the lawyer needs to ask is, is it appropriate to use a single testamentary trust for the three children? Or if circumstances permit, would it be more appropriate that three separate testamentary trusts be used, one for each child?

In the case of using a single testamentary trust, it would be appropriate if all of the children were under 18 years of age and there was a trustee or preferably co trustees managing the testamentary trust on behalf of those minor children until they turned a responsible age, usually 25. Another reason for using a single testamentary trust would be to protect the assets going into the trust, which we call the trust fund.

Now, this might consist of shares, cash, a property portfolio, and the family home. Where there is risk of a child entering into a divorce or a family relationship breakdown situation, the single trust offers the most robust protection in that situation because there is a great deal of protection from the family court because there is more than one primary beneficiary, namely the three children and their children who are all beneficiaries of that one testamentary trust.

Another reason you might use a single testamentary trust is where the will maker wants to pass it to the next generation, but also for them to act as custodians for future generations, and this would be quite often the case in very large estates.

Another circumstance where a single testamentary trust is appropriate is where there is one large asset which is difficult to split. For example, you might have the family home and a business premises which earns rental income, it’s very difficult but not impossible to split that real property arrangement.

Moving to circumstances where we might use a multiple testamentary trust arrangements, that is, one testamentary trust for each child. Circumstances which the lawyer would need to consider would be the geographical location of the adult children.

For example, if you had one child on the Gold Coast, one child in Melbourne, and one child in London, it’s very inappropriate to have one testamentary trust if those three children were the trustee, it’s very impractical. Each of those children will always have a different risk and investment strategy, depending on their personal circumstances.

So, that has to be factored into consideration, if one was a high risk investor and one was a low risk taker, you’re going to get conflict. So it might be appropriate in that instance to set up a multiple style testamentary trust will.

One practical but quite often overlooked consideration is the relationship between the children. Whilst we hope our children get along with one another, quite often they don’t, and this will create legal and practical issues and complications down the track if the siblings fight amongst themselves.

You also have to look at the beneficiaries themselves, the children themselves and their children and you might have a happily married couple with three children in the white picket fence scenario versus the other child who might be a bachelor and loves to roam the world, traveling at will. So there’s different styles of trusts being set up for those different types of children.

Probably lastly, and most importantly, is the various controlling mechanisms for that multiple testamentary trust, and that will depend on the child themselves. You might have, for example, a very responsible, capable, and intelligent child who can act as a sole trustee of their own trust with little or no risk.

Then you might have the wayward child who is likeable and loveable but probably needs a little big brother looking over his shoulder, therefore, you would have a co-trustee arrangement. For example, that child and maybe a sibling, or that child and an independent trustee, such as the family lawyer, or the family accountant, or a trusted aunt or uncle, so to speak.

The third situation is where you have the spend thrift beneficiary or the beneficiary that has various troubles like alcohol, drug addictions, or a gambling problem, or has the very high risk of entering into a family relationship breakdown down the track.

In that instance, you would strongly consider not having that child as a trustee at all and have them have that trust arrangement with two independent trustees, for example, a brother or a sister, and an independent, experienced trustee like the family lawyer or the accountant or both.

So, as you can see, there are many different arrangements that can be put in place with testamentary trust wills, essentially, it depends on a case by case basis. If you’re planning to come in for an estate planning meeting, expect to put aside at least an hour because they’re the type of questions that I’m going to ask you about your family dynamic so that I can recommend to you the most appropriate testamentary trust will for your family and future generations.

Thank you and I look forward to speaking to you at the next session, which will be the last series of our five part series on testamentary trust.

May 14

Tax Advantages to setting up a Testamentary Trust within your Will – Video Part 3

By OMB Solicitors Videos, Wills and Estates

The benefits of having a Testamentary Trust for Tax Advantages.

In Part 3 of our Part 5 series Wills & Estates Solicitor Richard Dawson takes us through the benefits of using the structure of a Testamentary Trust for Tax advantages.

Contact our Lawyers Gold Coast team for more information on Testamentary Trusts.

See Part 1
See Part 2

Transcript

I’m Richard Dawson, Partner at OMB Solicitors, and I’m in charge of the estate planning team. Today, I want to talk to you about setting up testamentary trusts within your will and the tax advantages of doing so. A testamentary trust is a trust that is established in a person’s will.

It comes into effect when the will maker passes away and the executive administers their estate. There are a number of advantages of having a testamentary trust in your will, and one in particular is income splitting for tax advantages.

For example, let’s say a deceased estate was worth one million dollars, and it left that million dollars to a testamentary trust. In that testamentary trust, there may be a number of beneficiaries. For example, the deceased person’s children and grandchildren.

One of the advantages in a testamentary trust is that children and grandchildren under the age of 18 are taxed at adult marginal rates. This is different from family trusts, which are more commonly used to run family businesses and the like. So let’s use an example, let’s say the million dollars was invested and the return on the investment was 5 % per annum. That will generate $50,000 a year in taxable income.

The trustee of the testamentary trust, which more often than not is the deceased person’s child or potentially grandchildren, they have the day to day management and responsibility of administering the testamentary trust. One of those responsibilities is to ensure that a tax return for the trust is lodged after 30 June each financial year.

Using the $50,000 income as an example, let’s say we had three grandchildren under the age of 18. The trustee has the ability to split that $50,000 to each of those three grandchildren, and the first $18,200 for each grandchild is tax free. Therefore, you can see the $50,000 a year in income from that testamentary trust is completely tax free.

One of the advantages and peace of mind for the will maker is instead of paying the tax that would otherwise have been paid if that million dollars was left to an adult child on a high taxable income, the tax savings can be used for the grandchildren’s education.

Therefore, I like to say, let the tax man pay for the grandchildren’s education. Think of it this way, instead of paying the tax that would have been payable to the ATO, the testamentary trustee can pay it to the school headmaster to be used for private school education, sporting needs, or any other maintenance that these young children or grandchildren may need in their life.

So, If you would like any further information about testamentary trusts or the advantages and disadvantages as to why they are used, please get in contact with me or one of my estate team members, and we’ll be more than happy to assist.

Thank you.

May 14

The Benefits of a Testamentary Trust – Video Part 2

By OMB Solicitors Videos, Wills and Estates

The benefits of having a Testamentary Trust and using it to your benefit.

In Part 2 of our Part 5 series Wills & Estates Solicitor Richard Dawson takes us through the analogy of using the structure of a Testamentary Trust as a Bank Model.

Contact our Lawyers Gold Coast team for more information on Testamentary Trusts.

See Part 1
See Part 3
See Part 4

Transcript

Today, we’re going to talk about part two of our five part series regarding testamentary trusts. Today’s topic will discuss the benefits of a testamentary trust and using it in a similar style as a bank.

For example, if I use the scenario where a testamentary trust has been set up in a will maker’s estate and a million dollars, for example, has been placed into that testamentary trust following the completion of an estate administration then the trustees of the testamentary trust in effect can act as a bank manager and they are able to loan the beneficiaries of the testamentary trust with money under certain circumstances.

For example, let’s say one of those beneficiaries wanted to purchase a principal place of residence but there was risks in that beneficiary’s marriage. For example, if it was a bit rocky, they may wish to put a loan agreement in place to ensure that if in the event of a divorce, that the trust’s capital loaned to purchase that principal place of residence could be repaid.

So, think of the trustees as a bank manager and the beneficiary as a customer. If that customer ever went to the bank manager and asked for a loan on terms to purchase a property, then the bank manager is going to ask for two things.

One, a formal written loan agreement with various terms such as interest repayments, interest rate and the term, and they also asked for a first registered mortgage to be placed over the property so that the bank’s interest, or in this case, the testamentary trust’s interest, is secured by the mortgage.

The advantages of having a loan agreement and a first registered mortgage on title is that the trust’s capital will always be protected. So, assume the beneficiary comes to the bank manager and says, I want to purchase a principal place of residence for $800,000, will you lend me the money? The trustees, who act as the bank manager, will then say, yes, we do, on these terms and conditions.

They will complete a loan agreement and a first registered mortgage, and the money will be lent to the beneficiary to buy the principal place of residence. The advantage of this is that the customer, namely the beneficiary, can, one, save on stamp duty because they will receive the primary place of residence exemption, which is a lower stamp duty rate than if purchasing in the name of the trust as an investment property.

Secondly, as it is a principal place of residence, there will be no ongoing land tax obligations, which could save thousands of dollars a year.

Thirdly and probably most importantly, when the property is ultimately sold, hopefully under good terms and conditions, not under a family court property settlement, but when the property is sold, if there has been any capital gain achieved during the course of ownership, then that capital gain is 100 % tax free because the person owns the property as their principal place of residence.

So, practically speaking, if they purchase a property for $800,000 and there is, say, for example, over 10 years, there might be $400,000 or $500,000 capital gain, the property is now worth $1.2 or $1.3 million. The loan has to be repaid.

So there’s $800,000 has to be repaid to the testamentary trust bank account, and at the discretion of the trustee, depending on the terms of the loan agreement, they may also wish for the compounding interest, which may or may not have been paid along the way, that can also be repaid back to the trust.

Therefore, there might be several hundreds of thousands of dollars in unpaid interest, which can be accumulated and paid back to the testamentary trust. So not only has the trust provided a principal place of residence for the beneficiary over many years, the beneficiary may not have had to pay interest or principal repayments depending on the loan agreement, and the trust’s investment in the principle property has been secured by way of a first registered mortgage.

So overall, there are some very good benefits with using the testamentary trust as a bank account and allowing the beneficiaries the use and enjoyment of their principal place of residence, knowing that their investment is secured. There are a number of other ways that we can use the trust as a bank, but if you need further information, please contact me at our office and I’ll be happy to discuss those benefits with you.

Essentially, that is the benefit of using a testamentary trust account as a bank. Next series, we’re going to talk about the roles of a testamentary trust in a person’s will, protecting the beneficiaries from a family court property settlement, and also protecting a beneficiaries from various creditors and predators.

I look forward to speaking with you then. Bye for now.

May 09

The Difference Between a Power of Attorney and Enduring Guardianship

By OMB Solicitors Wills and Estates

Power of attorney and enduring guardianship are different legal documents designed to take effect if you are sick, absent or become incapacitated and are unable to make certain decisions for yourself.

While a power of attorney is generally considered to be a device by which you empower a chosen ‘attorney’ (a person you grant authority to) to make financial and legal decisions on your behalf, an enduring guardianship specifically empowers your nominated ‘guardian’ to make lifestyle, health and welfare decisions for you, such as deciding where you live or what medical treatment you should receive if you are unable to make these decisions yourself. In Queensland, however, it should be noted that an enduring power of attorney can be nominated to do both of these things.

In the simplest terms, both are legal documents that empower someone you trust to conduct your affairs on your behalf should you not be able to.

The power of attorney

There are a number of different types of powers of attorney, as well as differences in the meaning of the term between each state and territory in Australia.

In Queensland, a power of attorney is governed by the Powers of Attorney Act 1998 (the Act). The Act sets out two types of power of attorney: General power of attorney under Chapter 2 of the Act; and enduring power of attorney under Chapter 3 of the Act.

General power of attorney is a legal document that gives your attorney the authority to make decisions about financial and legal matters on your behalf. This power lasts only for as long as you, as the person who appoints them, has ‘capacity’ — the general power ceases to operate should you lose capacity to make decisions. This type of power is often used for short-term purposes and as a means of convenience, for instance when you need someone to look after your financial and legal affairs in Australia while you’re travelling overseas.

A general power of attorney can be revoked by you, as the principal, by deregistering a registered power of attorney; when you die; or if the attorney resigns, has impaired capacity or becomes bankrupt or insolvent.

An ‘enduring’ power of attorney most significantly differs from the general power in that the powers continue should you, as the principal, lose capacity to make your own decisions. Essentially, you appoint your attorney while you have capacity in order to make important decisions for you if you later lose that capacity.

Under the Act in Queensland, an enduring power of attorney must:

Be at least 18 years old;
not be a paid carer or a health provider for the principal;
not be a service provider for residential services where the principal is a resident; and
if the person would be given power for a financial matter, not be bankrupt or taking advantage of the laws of bankruptcy as a debtor.

An attorney can also be the public trustee (if you have no-one else you trust) or a trustee company.

In Queensland, an enduring power of attorney can also be used to authorise medical and health decisions, also known as an advance health directive (AHD). An AHD would take effect if your capacity becomes impaired, and works as if you had personally given the direction or had capacity to make the decision.

The AHD could include directions to the attorney(s) consenting to your future health care, including matters as serious as whether a life sustaining measure is to be withheld or withdrawn.

Enduring power of guardianship

This power involves appointing a guardian to make certain personal and health care decisions on your behalf when your decision-making capacity becomes impaired.

Family members, close friends, professionals or anyone who has a genuine and continuing interest in the welfare of an adult with impaired decision-making capacity can apply for a guardian to be appointed. Adults with impaired decision-making capacity can also apply on their own behalf. If you have no-one who fits the description above, a public guardian may be appointed for you.

Your guardian must be over 18 years of age and should be someone you trust implicitly. It could be for example, your spouse, children or significant person in your life.

In Queensland this power is covered under the Guardianship and Administration Act 2000. Under this Act, guardians cannot make decisions on:

Financial or property matters, unless they have also been appointed as your attorney for financial matters under an enduring power of attorney described above.
Special health care matters, including sterilisation or tissue donation.
Special personal matters including making or revoking a will, consenting to marriage or relinquishing a child for adoption.

Generally, guardians can be given the authority to make decisions for an impaired adult such as:

where they live;
what support services they receive;
with whom they have contact or visits;
general health care matters;
the approval of containment and seclusion in certain limited circumstances;
the approval of chemical, physical or mechanical restraint;
restricting access to objects;
other day-to-day issues.

Guardians are appointed by the Queensland Civil and Administrative Tribunal and can take the form of a single guardian to make decisions on all, or only, specified personal or health care matters; two or more guardians to make decisions together or to make decisions separately on specifically nominated matters on your behalf.

You can revoke your appointment of a guardian at any time by putting this decision in writing and making sure a copy is given to your guardian.

Questions around power of attorney and guardianship are often clarified by speaking with a legal professional experienced in the area of estate planning. Contact our Gold Coast Lawyers today for information or advice on any of the issues raised in this article.

Mar 06

The Importance of Sole Company Directors having a Will

By OMB Solicitors Articles, Wills and Estates

As adults, most of us are probably aware that dying intestate (without a valid will) can complicate matters for our families and loved ones. But did you know that dying without a will can also complicate things when it comes to your business matters? It’s true, especially if you are the sole director and shareholder of a company which operates your business.

Immediate concerns

Generally speaking the death of a sole director and shareholder who has not left a valid will has a significant impact on the company because:

it creates an immediate void in leadership;
there are immediate financial and logistical ramifications;
who takes over the directorship and how long will that take.

A closer look

Directors are in charge of managing a company’s business activities. Specifically they are tasked with:

acting in good faith and in the best interests of the company;
avoiding conflicts between the company’s interests and their own personal interests;
preventing the company from conducting business during insolvency;
taking certain steps to facilitate the process when the company is being wound up.

Legally, a proprietary company must have at least one director and he or she must live in Australia. Any company with publicly-sourced funded shareholders must have at least two directors, most of whom must live here. Any public company must have at least three directors (exclusive of alternate directors), and at least two of them must live here.

In most cases, if there are several directors and one passes away, there is minimal disruption. This is because the surviving director/s can simply step in to run the company on a daily basis. Or, in some cases, they will select one of their peers to do so on an interim basis, usually until the shareholders/members choose a permanent successor.

In companies where there are several shareholders, the death of one also tends to cause minimal disruption. This is because the directors can usually continue the daily management of the business until the shares are distributed to the beneficiaries of the will.

By leaving a will, a sole director can also ensure that there is a smooth transition in the company leadership and operations following his or her death. The reason is that section 201F of the Corporations Act 2001 permits the executor to appoint the successor. Put simply, the executor is authorised to address this matter quickly, thereby avoiding any prolonged disruption. Under these circumstances a replacement director can usually be appoint within 24-48 hours.

Whereas, if the sole director has not left a will, a relative must make an application to the Supreme Court to apply for a Grant of Letters of Administration and this usually take months thereby leaving the business in limbo. What is more, the Court decides who is granted Letters of Administration not the deceased director. Imagine the ramifications for the company if the bitter and estranged spouse was appointed, which is highly possible given their right of priority to apply, unless there is a divorce.

The effect on operations

During this time, operations may cease entirely. This usually happens when the lack of a duly authorised manager results in the inability to continue daily operations, including routine business and financial transactions. When this occurs for a protracted period, the results can be devastating. Among other things, employees who can no longer be paid will leave, and the company’s reputation will suffer.

Even if someone wants to buy the company, the lack of a recognised shareholder may hinder their ability to do so – or at least their ability to do so quickly. Without someone to authorise the transfer of shares, any sale would be put on hold pending the appointment of the deceased’s legal personal representative and the settlement of the estate.

Complications may also arise if the final decision to wind up the company is made so all beneficiaries can be paid out. Specifically, a lengthy delay may have an adverse effect on the company’s value compared to what it would have been if operations remained unhindered.

The significance of a valid will

Of course, a will isn’t valid unless it is:

signed by the person who made it;
appoints an executor (up to 4 persons)
witnessed in front of at least two other adults who are not beneficiaries;
made when the deceased was of sound mind, memory and understanding.

To learn more about making a valid will and the importance of having one if you are the sole director or shareholder of a company, contact the Estate Planning Partner, Richard Dawson, or our Gold Coast Lawyers team on 07-5555 0000 or estates@omb.com.au

Feb 15

The Importance of an Up To Date Enduring Power Of Attorney

By OMB Solicitors Articles, Wills and Estates

What happens if you are outside the country and you need someone to urgently act on your behalf, or are incapacitated and unable to make decisions for yourself?

An Enduring Power of Attorney (EPOA) is the legal document which appoints someone (known as your Attorney) to make these decisions on your behalf. An EPOA can also appoint more than one person – either severally, jointly or unanimously. An Attorney can be appointed in two ways – to handle your financial matters, to handle your personal health matters or to handle both (recommended). The ‘enduring’ nature of an EPOA means that it continues in the event you lose capacity to make decisions for yourself.

You can nominate when your Attorney’s power for financial matters begins. For example, you may wish for it to begin immediately upon you signing the EPOA or at a nominated date (for example, if you were travelling overseas) or not until a specified occasion, such as when you were certified by a medical practitioner in being incapable of handling your own financial affairs.

Your Attorney’s power regarding your personal/health matters begins only when you are incapable of making those decisions for yourself.

An EPOA could prove invaluable if you are outside the country and require a document to be executed as a matter of urgency (contracts of sale, transfer documents etc.).

On the other hand, what happens if you have previously appointed someone as your Attorney and they are no longer able to act, or you have lost faith in them acting in your best interests (divorce, estrangement etc.)?

The consequences of not having an EPOA, or not having an up-to-date EPOA, can be far-reaching because this could involve you missing an important deadline, or decisions being made on your behalf by persons who you would not otherwise appoint.

Up-to-date EPOA’s are not just reassuring; it is the one document that provides YOU with the legal authority to appoint someone to act in your best interests and protect your financial interests and personal health matters.

If you are incapable of making your own decisions and do not have an EPOA, or your appointed attorney is not willing to act on your behalf, your family will likely be forced into costly and time-consuming delays.

An application to the Guardian and Administration Tribunal (GAAT) may be required for the appointment of your Attorney (known as your Administrator). If an agreement between the parties cannot be reached, the GAAT may appoint the Public Trustee to handle your financial affairs or the office of the Adult Guardian for your personal/health matters.

This predicament is easily overcome by preparing a simple EPOA and ensuring it remains up-to-date.

We strongly recommend that you prepare, or update, your EPOA as part of your Estate Planning review. We welcome you to contact our experienced Gold Coast lawyers team on (07) 5555 0000 to discuss your EPOA and other estate planning matters.

Sep 03

Statutory Wills: Making A Will For Person Who Lacks Capacity

By OMB Solicitors Articles, Wills and Estates

Let’s face it, as responsible adults there are certain things we simply have to do whether we like it or not. We have to work. We have to pay bills. We have to pay taxes. We have to plan and save for retirement. And at some point, we have to put our affairs in order. For most of us, that final obligation involves making a will – a legal document in which we specify how our assets should be distributed and, in some cases, who should look after our children after we die.

But what happens when someone makes a will and then suffers a catastrophic injury or a sudden illness, such as a stroke, that profoundly affects their ability to comprehend and communicate? Or what if the person who made the will is now suffering from Alzheimer’s disease or another form of dementia? In other words, what happens if someone lacks the capacity – the legal term for intellectual ability – to make or change his or her will?

In such cases, Queensland law may allow for the creation of a ‘Statutory Will’. Also known as a ‘court-authorised will’ or a ‘court-made will’, this type of document is actually a Supreme Court order that permits “making, alteration or revocation of a will on behalf of a person who lacks the capacity to make, alter or revoke their own will”.

Technically, anyone can ask the court to issue this type of order on behalf of the testator (the person for whom the will must be made, changed or revoked). But there is a qualifier, which is that the court must agree that the person making the request has the right to do so.

In most instances, the person petitioning for a Statutory Will is related to the testator. However, courts have also established legal precedent for others, such as caregivers, powers of attorney, lawyers representing testators and – in some cases – close friends of testators, to make such requests.

Before you can actually apply for this type of will, you must ask permission to do so. Making this preliminary request allows the court to verify that you are acting in the testator’s best interests, and that you have legitimate reasons for seeking a Statutory Will. The initial part of this process is also designed to reduce or eliminate unnecessary and/or inappropriate applications.

For example, in a 2013 case heard by the Queensland Supreme Court, the issue at hand was whether the application for a Statutory Will had been made to safeguard any assets that may be passed on to the testator’s son, who was facing potential bankruptcy. After considering the arguments and evidence submitted, the Court determined the applicant’s reasons for pursuing changes through a Statutory Will were valid and allowed the application to go forward.

Once you have permission to file the ‘main application’, you may proceed. In general, this application should demonstrate that:

the person is incapable of making a will and/or making necessary changes to a will; and
the proposed will (or changes or revocation) is a truthful representation of what the person would want, as if he or she was capable of making a will and/or required changes to a will; and
in light of all of the circumstances, it is logical for the court to authorise the will and make the orders.

Acceptable evidence that someone is no longer capable of making a will and/or making changes to an existing will may include written reports issued by their personal physician or specialist. The court will also accept medical opinions as to the potential for the person in question to gain or regain their essential abilities in the future. This is especially significant in cases where there does not seem to be an immediate need for a Statutory Will.

As a friend, family member or acquaintance, your testimony pertaining to the individual’s inability to make or change his or her will may also be considered. The court, however, will not regard it as highly as medical evidence.

Because the legal standard to determine intention in Queensland is whether or not the proposed will “is or may be one that would have been made by the proposed testator if he or she had testamentary capacity”, you should provide information that will help the court understand what the testator hoped to accomplish. This may include but is not limited to:

an estimate of the size and nature of the estate;
a draft of the proposed will;
copies of any previous wills made and/or signed by the person in question;
material that serves as proof of the testator’s wishes;
verification of how the estate would be handled if the person in question died without a will;
information about any relatives who are likely to make a family provision claim against the estate, and whether the proposed will would instigate or deter this type of claim; and
information pertaining to anyone, including relatives and non-relatives, who can realistically expect to be included in the will.

The court may deny the main application (proposed will) if, for example, it concludes based on its review of all of the evidence that the person in question never planned on making a will at all.

That situation occurred in a 2017 case heard by the Queensland Supreme Court. In that matter, which involved a sizeable estate, the Court determined that it couldn’t approve the proposed will because the person in question didn’t really care whether he had a will – even when he had the ability to make one. Key to this determination was evidence that the man never followed through on making a will even though he had been earlier advised to do so, and even after he had consulted a solicitor about it in 2013.

If you are concerned about an ageing family member and his or her ability to make or update his or her will, don’t leave anything to chance. Speak with one of our qualified Gold Coast lawyers for a comprehensive assessment of the situation today.

Aug 30

superannuation estate planning lawyers gold coast

The Ticking Time Bomb in Your Estate Plan

By OMB Solicitors Podcasts, Wills and Estates

When it comes to estate planning, you might be surprised that often the biggest asset that you may leave behind might not be your property pool, but rather your superannuation. In this context, you may not be aware that it does not automatically fall into line with your estate planning wishes unless you take care of a few things first. In this podcast, Steven Mahoney from Gold Coast Lawyers at OMB Solicitors discusses the ticking time bomb that may lie in your estate plan.

Podcast: Play in new window | Download

TRANSCRIPT

Dan: Steven, many people make a mistake by forgetting about their superannuation when it comes to estate planning. Is that your experience?

Steven: Thanks, Dan. Yes, that’s certainly the case. A lot of the clients that I deal with on a daily basis think that their superannuation automatically forms part of their estate and therefore they don’t need to deal with it. They think by doing a will, that will obviously encompass all their death benefits attached to their super, and that’s certainly not the case. They’re governed by independent pieces of legislation. You’ve got both the Succession Act, which deals with all of your personal assets, and then also the Superannuation Act, which deals with all of that separately. It’s important that we deal with both of these at the same time.

Dan: Steve, so for people listening to this podcast, and the penny has just dropped that they need to clean this up, where do they start?

Steven: Really good question. A lot of it depends whether or not you’re involved with an industry super fund, so whether it might be Sunsuper, QSuper, or whether or not you have a self-managed super fund. That’s the starting point. Once we assess that, we work out whether or not with your industry super fund, whether or not you have what’s called a binding death benefit nomination. Now, that’s just essentially lingo for a will for your super, and we then must establish who are the dependents, who are the potential people that you can distribute your death benefits to, and what’s the most appropriate format to do that.

Dan: Steve, what about those questions like, “Who will be the beneficiaries,” etc., Do they need to be asked as well in the context of considering your super?

Steven: It’s one of the main questions I get asked, because a lot of people wish to leave their super to someone they’re not actually legally able to do that. Let’s say, for argument sake, you’ve got a young person who has their super and wants to leave it to their parents. Their parents aren’t actually what’s classified as a dependent for the purposes of superannuation. The only dependents are either a spouse or a child or stepchild. That’s one of the main classes there. To make sure they’re a dependent, you can legally pass it to them, or if they do want to pass it to someone else, we need to pass it to their estate, which we can do via payment to their legal personal representative and can have the death benefits dealt with under the context of the will.

Dan: Steve, is there this inherent risk that perhaps if somebody tries to go and do this work themselves, that they could possibly make the nomination to somebody that isn’t eligible?

Steven: Absolutely, and then that may be, if there is an industry super fund, that reverts to the trustee’s discretion, so if, in the first instance, there isn’t, this isn’t taken care of, and you don’t have a binding death benefit nomination, which only lasts for three years, and that’s another very important point, because a lot of people complete these and think, “Okay, I never need to deal with that again,” but a lot of these nominations are only valid for three years. Once that time frame’s up, we go back to the drawing board.

Dan: It could be a bit of a ticking time bomb for some people, couldn’t it?

Steven: A lot of it is, and that’s exactly right, so especially with blended families, if you’ve got a vanilla family affair, husband and wife, three kids, it might not be such a complicated matter, but if there is blended families, or de facto wives, children to other partners, it really does become a complication, and we need to make sure we give this some serious thought.

Dan: Legal advice in this respect, Steve, is a no-brainer.

Steven: It is a no-brainer, and they think that spending the money might cost at the outset, but it saves considerable heartache and can keep families together if this is dealt with at the outset, dealt with properly, dealt with by a person who, obviously, has experience in this industry in estate planning matters.

Jul 19

Are you left out of a will? Call us today.

What Can I do if I Have Been Left Out of a Will?

By OMB Solicitors Articles, Wills and Estates

If you have been excluded from a Will, it probably seems like a slap in the face. You may be feeling hurt and angry – especially if the person who passed away was a parent or another close relative. As a result, you may be wondering if there’s anything you can do. In Queensland, the answer is “yes.” In fact, there are a few ways in which you can challenge – or contest – a Will.

One way to do so is by making a Family Provision Application – but only in certain circumstances.

You may qualify to make this type of application if you were:

The deceased’s spouse (including a de facto partner);
The deceased’s child (including step and adopted children); and/or
The deceased’s dependant (In order for any person to be a “dependant” they must have been “wholly or substantially maintained” by the deceased person at the date of the deceased person’s death).

and your needs have not been properly addressed through his or her Will, or because he or she died without making a valid Will.

If you meet any of these criteria and wish to pursue this option, you have nine months from the time the person died to file this type of application. However, it is important that you notify the Executor of the estate that you intend to do so as soon as possible. This is because he or she has the authority to make the allocations specified in the Will and wrap up related matters six months after the person’s death as long as he or she has not been notified about any potential claims on the estate.

Missing this deadline does not automatically invalidate your ability to make a Family Provision Application. However, you’ll have to convince the Court that you had a valid reason for missing the deadline before you can proceed.

It is also important to note that just because you feel you have been treated unfairly doesn’t mean the Court will agree. Ultimately, it is up to the Court to decide whether or not the Will fully addresses your needs. It will make this determination based on:

Any provisions previously made to you by the estate
Your financial situation and other circumstances specific to your case
How much money the estate has on hand
Whether anyone else is contesting the Will based on lack of adequate provision
Your relationship with the deceased

Courts will also consider challenges based on some other contentions. The first is that the person who created the Will – and left you out of it – was bullied, intimidated or coerced into doing so. The second is if the person who made the Will in question was mentally or intellectually capable of doing so. And lastly, the Court will consider a contention that the person who made the Will made a legally binding agreement to craft the Will in a certain way, a breach of the agreement ensued and you were adversely affected.

Keep in mind, however, that you can only challenge a Will in Queensland if the person who died had land and/or a home in the State; or if he or she was a permanent resident of Queensland at the time of death, but held his her assets elsewhere.

Having said that, you do not have to live in Queensland in order to contest a Will here. In fact, you can do so without leaving home. Before you initiate the process, however, it is important that you fully understand it – so if you do live somewhere else, be sure to consult a Queensland lawyer before pursuing this option.

Finally, you may be wondering how much all of this costs. Generally, the Court decides who must pay the legal costs associated with the contention of the Will. In most cases, if the Judge rules in your favour, the estate will pay for any legal costs you have incurred. However, if the ruling goes against you, the Court may order you to pay the legal costs incurred by the Executor. This underlines the importance of seeking legal advice from a reputable law firm who have experience in this type of litigation.

Clearly coping with the death of a loved one is never easy – and discovering that you have been left out of his or her Will while you are grieving complicates matters even further. If you feel that you have been wrongfully excluded, it is important to consult a qualified Gold Coast lawyer about these and any other legal remedies that may be applicable to your case.

Jun 18

What is an Executor and How Do I Choose One?

By OMB Solicitors Podcasts, Wills and Estates

If you’re like many people when it comes to estate planning, you probably don’t give the attention that’s necessary in choosing who your executor will be but rather simply opting for your partner or adult child. But it’s an onerous job, and the choice is very important. In this podcast, Gold Coast Lawyers at OMB Solicitors‘ Jessica Thomas helps you consider your choice.

Podcast: Play in new window | Download

TRANSCRIPT

Jessica: Well, Dan, the first step in choosing an executor is to choose someone that is honest, that is organised, and that is able to communicate with the beneficiaries in your will. So, suppose we can go back to basics, what is an executor? An executor is someone named in your will who is given the legal responsibility to take care of any remaining financial obligations that the deceased may have had. So what the executor, their job is to do is to bring in the estate, pay off any debts that there may be, and then distribute in accordance with the terms of the will.

Jessica: The key qualities, as I said before, are that you firstly need someone that you can trust. A lot of the times, people will appoint their spouse, their adult children, or sometimes their [inaudible 00:01:12]. It’s a big job. It’s very important that the executor is organised and able to communicate with those beneficiaries.

Dan: Jessica, I was just sort of thinking that not only is it challenging in the respect of trying to distribute the estate generally, but also there must be some family dynamics or relationships that can possibly be difficult to navigate for the executor, as well.

Jessica: That’s right, Dan, so we always say when there’s a will, there’s a family. The difficulty with appointing say, for example, one adult child as opposed to both of your adult children, is that the other adult child could potentially feel that they’re being left out of making the important decisions. So if you do appoint someone impartial to the estate, such as a solicitor, or an accountant, even for that matter, you’ve got someone there that they don’t actually have the emotion attached to actually distributing that estate. They can use their professional judgement as to how the matter needs to be essentially wrapped up as soon as possible for the benefit of those beneficiaries.

Dan: Now, here’s why it’s important, I suppose, to speak to your lawyer about this as opposed to going online and jumping in for a free will kit or going down to the newsagent and just filling in the details.

Jessica: Yes, it’s very important to speak to your solicitor when setting up a will, obviously. Post office will are better than nothing, but in saying that, if you don’t actually completely understand how the succession of Queensland or any state, for that matter, works, it’s very important to speak to a solicitor so they can set up your estate planning properly. Also, on the other hand, when someone does die and you are appointed the executor of that estate, to speak to your legal professional or your accountant as to what the process is. We handle these matters daily, assisting families with the administration of their loved ones’ estates. Being an executor, as I said before, it’s a very big job. You essentially are liable if you do anything wrong, so it is so important to have a solicitor there acting in your best interest as the executor of the estate and assisting you with the administration of that.

Dan: Jessica, thanks for joining me.

Jessica: Thanks, Dan.

May 31

A Ten Point Strategy to Make Sure Your Estate Planning is Up to Date

By OMB Solicitors Articles, Wills and Estates

It’s one of those things that we all know we should do – but we don’t necessarily want to do it. As adults we’re all aware that it’s important to have a will – and other measures – in place to ensure that our affairs are handled properly if something horrible were to happen. So at some point, most of us bite the bullet and “put our affairs in order.” For those of you who are still procrastinating, however, here are some tips to help you create an effective estate plan, and manage it once you’ve done so.

Begin by taking stock of your personal circumstances. Do so by making a comprehensive list of all of your assets, including but not limited to your investment portfolio, and all personal and real property.

Then consider the following:

How do you want you assets to be distributed?
Have you nominated a beneficiary under your superannuation policy?
Who will look after your children if something happens to you and/or your spouse?
Who can you trust to ensure that your wishes are carried out as stipulated in your will?
Who will handle your financial matters if you are unable to do so?
Who will make medical decisions on your behalf if you can no longer make them yourself?

The next step is to draft your will. You can do this (and draft other legal documents in your estate plan as long as you are at least 18 and don’t have any physical or psychological issues that would render you legally incompetent) with the assistance of a qualified legal professional, or on your own using legal resources available online. Although choosing the latter may seem like a more affordable option, consulting a lawyer can save you time and money in long run. Specifically, he or she can help determine which assets you can automatically include in your will – and which ones (such as joint assets, superannuation and life insurance policies) you can’t and most importantly, the implementation of strategies to ensure your hard-earned assets go to the beneficiaries you have chosen, as opposed to those you have not.

Don’t forget to choose an executor. This is crucial because the executor is the person who will oversee the distribution of your assets and other matters as stipulated in your will. Make sure it is someone you trust and is equipped to cope with family squabbles and any unpleasant issues that may surface. He or she may be a friend, relative or a financial or legal practitioner.

Next, make sure you’ve assigned power of attorney. By doing this, you’re giving someone the legal authority to make decisions and/or take certain actions on your behalf in certain circumstances. You can designate power of attorney to someone for only a limited time; in the event that you are no longer able to make your own decisions; or to make decisions regarding your medical care if you are unable to do so.

You should also consider creating an advance health directive. Creating this document is another way to ensure that your wishes about medical treatment and related matters are known in the event that a catastrophic illness or injury renders you incapable of making decisions about your care.

While you are at it, talk to your Gold Coast Lawyers about the pros and cons of creating a testamentary trust. This is a trust that is included in your will, can be used to protect your assets, and will only take effect when you pass away.

This may be a viable option for you if:

Your beneficiaries are not yet legal adults
Your beneficiaries are mentally incapable of handling certain responsibilities
You want to keep your beneficiary/ies from squandering their inheritances
You do not want family assets to be divided in a divorce settlement
You want to protect family assets in the event of bankruptcy

The trustee, or person who administers the trust, will also be appointed in your will. He or she is in charge of the assets set aside for the beneficiaries until the trust is no longer in effect. How long the trust remains in place is up to you. Usually, it will be effective until a minor becomes an adult, gets married or successfully completes their education.

Once you’ve conferred with your lawyer and drafted all of the legal documents you’d like to include in your estate plan, let your executor and relatives know what they are and where you keep them. You should also keep and let them know where to find any other significant legal and financial paperwork including your:

Birth certificate
Marriage certificate
Personal insurance policies
Documents pertaining to real estate holdings
Financial and retirement information
Superannuation papers
Investment documents (securities, share certificates, bonds)
Health insurance documents
Pensioner concession card
Any deposits for funeral investments

You should also get into the habit of going through all of the paperwork in your estate plan at least once or twice per year. Doing so will allow you to be proactive when it comes to making any changes. This is especially important when it comes to your will, which should be amended in the event of:

The sale of important assets
The creation of a family trust
The acquisition of new assets
Additional financial obligations
Changes to your personal affairs
Changes to your super or SMSF

Whenever you make changes to your will, you should also ensure that any beneficiary designations on insurance policies and so forth also reflect the changes.

Finally, it is important to keep the lines of communication with relatives open throughout the estate planning process. By being candid about your wishes from the outset, you’ll reduce the likelihood any misunderstandings and hurt feelings in the long run.

Apr 27

Will Shock: Could an unsent text message be a valid will?

By OMB Solicitors Articles, Wills and Estates

In Queensland, a valid will is written and signed by either the person making the will (the Testator) or directed by the Testator in their presence.

The testator must sign or acknowledge the signature in the presence of two or more witnesses and the Testator must sign with the intention of executing the will.

The Queensland Supreme Court Case of Nichol v Nichol[1] recently delivered, saw the Court validate an unsent text message as a will.

A man died in October 2016 and was survived by his wife Julie of one year, who had left him days before. The deceased had a very close relationship with his brother David and nephew Jack. His death was sudden and unexpected.

No formal will was ever found, but when the body was discovered, his mobile phone was nearby.

There was an unsent text message saved to drafts which read:

“Dave Nic you and Jack keep all that I have house and superannuation, put my ashes in the back garden with Trish Julie will take her stuff only she’s ok gone back to her ex AGAIN I’m beaten. A bit of cash behind TV and a bit in the bank Cash card pin 3636 MRN190162Q 10/10/2016 My will”

The Nichol’s case is one of many cases all over Australia where a suicide note, draft will, unexecuted will and electronic wills, such as a Facebook status or Tweet on twitter, have been valid wills. Without the intent, the application for the informal will to be validated won’t proceed.

The judge held[1] that four elements constituted the text being a valid will.

Was there a document?
If so, did the document purport to reflect testamentary intentions?
When the document was created, did the deceased demonstrate that it was his intention that the document operate as his will?
Did the deceased have testamentary capacity?

[1] [2017] QSC 220.

Having a valid will is the only reliable way to ensure that your estate goes to family or friends of your choice after you pass away. A valid up-to-date will can help reduce stress for your family and friends, limit the costs to administer your estate and lessen the possibility of disputes over your possessions.

Please call Gold Coast Lawyers at OMB Solicitors to plan your estate.

Apr 21

The Two Most Important Things to Do Before Heading Overseas

By OMB Solicitors Articles, Wills and Estates

If you’re like most Australians contemplating a trip overseas, it’s likely you’re going to forget to take care of 2 fundamentally important things, that if not addressed can have a catastrophic impact upon your family.

In this video, Gold Coast Lawyers at OMB Solicitors, Steve Mahoney lets you know what they are and what to do about it.

Steve Mahoney lets you know the 2 most important things to do before heading overseas

Apr 21

Why Simple Wills Rarely Work Anymore

By OMB Solicitors Podcasts, Wills and Estates

The fabric of the traditional family unit has changed and continues to change! Once, Mum, Dad and the 3 kids, were locked into family bliss, or maybe not, but nevertheless they stuck together and consequently from an estate planning perspective, all was relatively easy. But now throw into the mix, second and third marriages, blended families and children that are now adults, who similarly may have broken relationships or other issues, culminating in the once simple estate plan, not being so simple after all.

In this podcast, Estate Planning expert, Richard Dawson of OMB Solicitors discusses the matter.

Podcast: Play in new window | Download

TRANSCRIPT:

Dan: Richard, how complex are families today?

Richard: Very complex, in a word. We have about half of our families are blended families, as you mentioned second and third marriages. Those blended families have children. There’s a number of ways that we can approach estate planning, and there are some common denominators that I always look for in my estate planning with clients so that they can avoid the traps and the pitfalls that may follow. Some of those can avoid family disasters.

Richard: I think one of the most important things that a person can do as part of their estate planning is to discuss the affairs with the family so that the family members have a realistic expectation of what they can expect to receive by way of an inheritance and so that avoids surprises. It’s really important to discuss your intentions about how you plan to divide your estate, before you go, with your children and other loved ones. You should have open and frank discussions with family members so that you can manage their expectations and flush out any areas of conflict that may be unsettled between siblings for many and varied reasons. Adult children have their own expectations and beliefs. They also have their own investment strategies and their own family dynamics. We’re all human; we’ve all got issues. Quite often adult children have predispositions about what they should receive in the form of an inheritance, but more so some of them even expect to receive an inheritance in a certain way.

Richard: What we’re trying to do as part of estate planning is to avoid a conflict in a family after death. Because poor estate, or no planning at all, is a recipe for a family disaster. It can also be an extremely expensive exercise if there is no will in place when someone dies.

Dan: What you’ve just mentioned there … It does certainly deconstruct that whole idea that simply going down to the newsagent and grabbing a will kit isn’t going to cut the mustard.

Richard: The $20 will kit is what you use before you spend thousands and thousands and thousands of dollars on your lawyer fixing up the problem.

Dan: Mm-hmm (affirmative).

Richard: I’ve seen will kits used time and time again, and very few of them are prepared properly and some of them are often invalid and a waste of money and time in the first place.

Dan: There are sort of other examples, I suppose isn’t there … Of organisation, big publicly owned organisations who may offer free wills or whatever the case might be, where you can actually have a lawyer not involved in the construction of these really important documents.

Richard: That’s right. The most commonly used service for free wills is the Public Trustee of Queensland. They promote the free will service, which is a great idea for the community. They do about … From memory, about 35,000 free wills a year. That’s great, but what happens is there a government body and they charge a percentage on your estate administration regardless of how easy or complex it is. With no disrespect to the Public Trustee because there are some very good people who work in there, but they are a government body and we all know that the wheels of the government machine roll very slowly. Whereas, if you’ve got a lawyer engaged in commercial practice, they’re very experienced and they’re usually specialised in estate administration, as am I. We have a lot of systems in place, we’ve got a lot of precedents in place which make estate administration as pain-free as we possibly can. It’s also important the quicker you work and the more experienced you are at it, generally means we can resolve estate administrations and finalise them for the beneficiaries and the executors in a time and cost-effective manner.

Dan: Now some of the practicalities I suppose Richard, in terms of constructing a good estate plan, fundamental today is choosing the right executor?

Richard: Absolutely. The executor is the person, or persons, who are appointed in the will to administer a deceased person’s estate. They’ve got a number of roles and responsibilities; in particular, they’ve got to identify assets and liabilities of the estate. They’ve got to pay out any debts. They’ve got to pay for the funeral. They’ve got to pay out any estate administration costs. They would have to apply for probate if the estate warranted it. That’s all done before any of the beneficiaries receive their inheritances.

Richard: There can be more than one executor, but there can be no more than four. I find four is a very impractical number. A sole executor has autonomy, so if you’re choosing a sole executor then it’s important to choose the right person because they will be stepping into the deceased’s shoes, identifying the assets, paying out liabilities, and in a word upholding the terms of the will. So that person must be experienced and have the necessary acumen to be able to administer an estate.

Dan: Richard I’m assuming that key to this is trying to make the life of an executor as simple as possible. So is there something that can be practically done in terms of making sure that banking details and superannuation details, insurance, et cetera are readily apparent and available to the executor?

Richard: Yeah, very much so. That’s a good point. I say to clients that estate administration shouldn’t be a game of Sherlock Holmes. The executor has a difficult enough job as it is, and the will-maker should really get their banking, superannuation, insurance, and other investments in order. This greatly assists the executor in managing the estate, and it also saves a lot of time and cost. All too often do I see executors asking for advice as to where they should be searching for a deceased’s assets or investments. The lawyer is not going to know. It should have been the will maker who told the executor, “When I pass away, I’ve got this bank account, I’ve got that superannuation, I’ve got that life insurance. Here’s all my details.” It makes the executor’s job very easy.

Richard: What I try and encourage people when they come in to do their wills … And there are times when I don’t know those person’s assets because they’re closely guarded or they might be new clients, I ask them to put all their bank details and 30 June statements in a sealed envelope, sign across the back of it, and then we keep that with the will. I ask them to update their details, and replace that envelope as time goes by. So that when the time comes for the estate to be administered, we can go to that envelope, open it, and it’s all there. It makes that so much easier than to be digging through all old, outdated paperwork, writing to banks, and … Basically going on a fishing expedition for stuff that may not be there.

Dan: Now we know that there has been this exponential increase in estate litigation, and I’m assuming that it’s front of mind for many people that are considering estate planning. Is there things that people can do to minimise the possibility of their estate being contested or disputed by someone within the midst that’s not happy?

Richard: Most definitely. Every time I take instructions for a will I consider who is an eligible person to contest an estate. A will maker must consider spouses, children, and dependents. Where somebody for whatever reason leaves out a spouse, a child, or a dependent, or leaves them a minimal amount, up goes the red flag. I talk to the client and I explain to them the pros and cons of leaving out or minimising an inheritance for those category of people. Because at the end of the day, a disgruntled beneficiary has the rights in all Australian law to contest an estate and apply to a court for what we call Further and Better Provision from the estate. To get that Further and Better Provision from the estate lawyers are involved and it’s expensive. It’s very expensive. 99.9% of the time it comes out of the estate. There are exceptions, and there’s a Judge’s discretion as to whether or not if someone’s being vexatious or frivolous in their claim that they can personally have costs awarded against them. But in most cases it is commercially the option that the estate pays. Which means there’s less for everyone to go around. And the lawyers get paid.

Richard: It’s just not necessary because of improper estate planning or no estate planning at all.

Dan: Mm-hmm (affirmative). Look, it’s an area of law isn’t there where there are lots of myths, and unfortunately, a lot of these myths do inform the wrongful practices of people who are considering estate planning.

Richard: That’s exactly right, yes.

Dan: I’m thinking fundamentally just going through what you’ve discussed, having that open discussion with the family and others that may well be a beneficiary is really important. Secondly choosing the right executor, thirdly getting the legal paperwork in order. Also approaching this piece of very important work through the lens of what can I do to ensure that the estate is safe and not going to be disputed? They seem to be the take-home messages.

Richard: Absolutely. That’s for sure. Probably to add to that is keep everything up to date. If we have a look at where we were 10 years ago, our lives were completely different. We didn’t have iPhones, we didn’t have large superannuation accounts. We were building; property values in some places have doubled or tripled. We’ve had children, we’ve had grandchildren. They’re all the things why you would keep a will up to date and why you would review your estate plan, I recommend, every say three to five years depending on your circumstances. It’s really important to have an up to date will so that it reflects your current wishes, and it also meets your family’s expectations.

Dan: Great advice. Richard, thanks for joining me.

Richard: Lovely to have you. Thank you. Bye for now.

Apr 17

Wills – The Unavoidable Topic

By OMB Solicitors Articles, Wills and Estates

It’s human nature to refuse to accept the obvious – nothing is more certain than death and taxes. Making a Will isn’t morbid – it is the only way to protect hard earned assets.

Most people wouldn’t leave their car door open with a wallet displayed on the front seat. Few people leave their homes open so thieves can help themselves but many people leave their estate wide open to claims. A valid will ensures assets go to those who are near and dear. The absence of a Will leaves the estate open to claims from all and sundry and this includes the taxation office.

There is no legal obligation to make a will, but it is the smart option. Without a Will, assets can be distributed by anyone to anyone. When people die without leaving a will, assets are distributed according to a legal formula.

The process applies to financial assets, property, and may determine the guardian of children under 18 years of age. Avoid creating ongoing hassles and legal wrangles by preparing an estate plan. This usually means writing a straightforward will and an enduring power of attorney.

Enduring power of attorney offers protection if an accident or a medical condition prevents people handling their own affairs. An executor is appointed to ensure a will is followed to the letter. Power of attorney allows a trusted person to deal with financial and legal affairs of another.

A will can be relatively straightforward or a complex legal document incorporating protective clauses and tax effective structures such as testamentary discretionary trusts (TDTs). TDT’s are not for everyone, but can be very advantageous.

TDT’s may offer tax advantages and protect assets involved in Family Law Court proceeses or creditors threatening bankruptcy.

TDT’s also protect spendthrift beneficiaries from themselves and ensure ongoing care for children, grandchildren and mentally disabled beneficiaries.

Legal advice is recommended when making a will. It is essential to cover all likely eventualities, choose an executor to administer the estate; appoint the guardians of children, list assets and liabilities (individual, jointly owned or placed in a trust), name beneficiaries, show how assets should be distributed and make provisions for the future of any children.

Recent legislation allows people to place large proportions of their wealth into superannuation.

Superannuation is not always distributed according to a person’s will because the asset is controlled by the trustee of the superannuation fund. This is not usually the executor of the estate.

The superannuation fund trustee may decide who receives the proceeds of the fund. This is an important estate planning issue.

Gold Coast Lawyers at OMB Solicitors has almost 40 years estate planning experience. For further information contact Simon Bennett on 07 5555 0000.

This article was featured in Label Magazine, by Simon Bennett

Apr 17

Don’t Get Lost in the Shuffle

By OMB Solicitors Articles, Wills and Estates

Volcanic ash created an international debacle as people were stranded far from home; it highlights the need for a back up plan

Life does not always go to plan but most people are unprepared for the unexpected according to Gold Coast solicitor Simon Bennett. Simon says responsible people prepare for all eventualities. “Life is unpredictable, we must hope for the best and be prepared for the worst,” he says.

“People can sometimes become incapacitated due to a so-called act of god like the volcanic ash eruption or as the result of an accident or illness. It is essential to have a plan of action in place to avoid compounding the problem. A power of attorney ensures a trusted family member, friend or professional person is able to take over financial and health affairs,” Simon says.

A power of attorney is a legal document that allows any person aged 18 years or over to nominate another to deal with financial, health and any other situations if they are not capable of dealing with these matters themselves. An enduring power of attorney continues if the loss of capacity is ongoing. It allows the person with the enduring power of attorney to make decisions on behalf of another.

Simon says government officials take over when people who are no longer capable of dealing with their own affairs have failed to arrange a power of attorney. “It would be terrible to rely on state officials.

“These people have no idea of what an incapacitated person would want or expect. The individual becomes a faceless subject of the State. A power of attorney ensures individuals don’t get lost in the shuffle. OMB Solicitors experienced legal team can help everyone plan for the unexpected,” he says.

This article was featured in Label Magazine, by Simon Bennett

Apr 10

Taxman Pays For Education

By OMB Solicitors Articles, Wills and Estates

Save thousands of dollars on private education with savvy estate planning

You can take advantage of legal tax benefits and save on education costs with a trust. That statement comes from O’Keefe Mahoney Bennett estate planning manager Richard Dawson who says trusts are established in a will and funded by assets of a deceased estate or payments to an estate.

“A Testamentary Discretionary Trust (TDT) is otherwise known a lineal descendants trust,” he says. “The trust is controlled by a trustee. The trustee is usually the primary beneficiary and able to enjoy the benefits of the trust. TDTs often include other beneficiaries. These may be the children and grandchildren of the primary beneficiary because current tax legislation allows the proceeds of a trust to be distributed to beneficiaries.”

The benefit of correct estate planning is that tax savings result when the trustee distributes gains to the beneficiaries with the lowest marginal tax rate in a particular financial year. “These may be the mother, father, child, or grandchild of the deceased which means that the beneficiaries pay tax on trust proceeds at normal marginal tax rates.

“These beneficiaries are usually children as they are unlikely to be earning an income. Therefore significant tax savings can be gained by distributing trust income to children because children aged under 18 years are taxed at marginal adult rates as opposed to adults on high incomes who pay significantly higher tax rates,” Richard says. “Those tax savings from the trust income can therefore be used to subsidise children’s education costs and living expenses. By effective use of estate planning, we can ensure that those savings via the taxman can pay for their education and lifestyle.”

For more information on tax-effective estate planning contact O’Keefe Mahoney Bennett Solicitors 5555 0000 at OMB Solicitors.

Apr 10

Will Kit

By OMB Solicitors Articles, Wills and Estates

Do-it-yourself Will Kit – What you use before they come to see the lawyers to fix everything up…

Most of us work tirelessly over 30 or 40 years to accumulate our wealth with the intention that we pass that wealth on to the next generation after our death. In the interest of saving a few dollars people often resort to the use of Do-It-Yourself (DIY) Will kits, colloquially known as newsagency Wills. DIY Wills have a myriad of pitfalls for the unsuspecting user.

Respected Gold Coast Estate Planning Lawyer Richard Dawson says to avoid these DIY Wills at all costs. DIY Wills have many “fill in the blanks” sections which, if completed correctly, created a legally binding document. If not, then lawyers are usually engaged in a very expensive exercise of determining what the Will-maker intended before his or her death.

DIY Wills usually cost between $20-$40 and then the Will-maker has to spend time completing the DIY Will with the hope that it reflects accurately their wishes. On the flip side, a simple and straightforward Will prepared by a lawyer can cost but a little more. Knowing you have peace of mind it is a very small price to pay. The Succession Act stipulates very strict requirements regarding the preparation of, signing and administration of Wills. One tiny error could render the Will entirely invalid. If this occurs then the deceased person is said to have died ‘intestate’, that is, without a valid Will.

When a person dies intestate an application must be made to the Supreme Court before a deceased person’s estate can be properly and legally administered. Depending on the circumstances, the person who has the right to apply to the Court may be very different from the person the Will-maker original intended. Richard says that any person contemplating making their Will should always use a qualified, experienced, estate planning lawyer so as to avoid the costly expense and anguish associated with Supreme Court applications.

Newsagencies should be seen only as a place to purchase your newspapers, magazines and lotto tickets, not a one-stop-shop for your legal documents. Having a lawyer prepare your Will is not only sound estate planning advice but highly recommended if you want to protect your family assets. He says the cost of professional legally prepared Wills is insignificant in comparison to the costs of a Supreme Court application.

This article was featured in Label Magazine, by Simon Bennett & Richard Dawson

Apr 10

All in the family

By OMB Solicitors Articles, Wills and Estates

Let the tax man pay for your children’s and grandchildren’s education.

Ever wondered how you could save tens of thousands of dollars on your children’s or grandchildren’s private education? Well the answer is quite simple, completely legal, and better still the tax man pays it for you!

The tax savings are achieved through a Testamentary Discretionary Trust or TDT. A TDT is a trust set up in a person’s Will and establishes on their death. TDT’s are funded by deceased estate assets, such as real estate, life insurance payouts or superannuation benefits.

A TDT is controlled by the trustee who is usually also the primary beneficiary. That is, the person who controls the trust also enjoys its benefits. TDT’s generally include children and grandchildren of the Will maker as beneficiaries.
TDT’s have a wide range of benefits and are designed to protect a beneficiary’s creditors and predators. A beneficiary’s creditor can include the ATO.

Proceeds of a TDT must be distributed to the nominated beneficiaries such as the Will maker’s children or grandchildren. The relevant tax law applying to TDT’s means children under 18 years are taxed as adults. This is different tax treatment under a
family trust where children taxed at extremely high rates.

The potential tax savings when income from a TDT is distributed to benefit a child or grandchild under 18 is significant. If the child’s parent is a high income earner and pays a high rate of tax, then TDT income paid to children under 18 years is very tax effective.

For example; Fred Smith’s mother died leaving him an inheritance of $1.5M and a TDT was setup in her Will. Fred is a doctor. Heearns $250,000.00 a year and pays the highest marginal rate of tax of 49%*. Fred has 3 children, Peter, Paul and Mary all under the age of 18 years.

The TDT receives income of $75,000 per annum from its investments. Fred, as the TDT trustee, distributes $25,000.00 to each of Peter, Paul and Mary. The first $18,200.00 is tax free. The other $6,800.00 is taxed at 19% or about $1,300.00 per child. Had this $75,000.00 been added to Fred’s $250,000.00 annual income, Fred would have paid $36,750.00 in extra tax. The total tax saving to the Smith family is $32,850.00 per year. Multiplying this tax saving by the average 15 years of private education (including university) potentially saves the Smith family nearly $500,000.00.

The moral of the story is through proper estate planning, setting upa TDT can create a completely legitimate tax-effective way to pay for your children’s and grandchildren’s education and lifestyle instead of seeing your hard earned dollars end up in the tax man’s pocket. To find out more on TDT’s and other estate planning strategies, speak with Richard Dawson, Partner and Estate Planning Manager at O’Keefe Mahoney Bennett Solicitors, phone 07 5555 0000 at OMB Solicitors.

*As at 1/7/2015 including Temporary Budget Repair Levy of 2% andMedicare Levy of 2%. Tax rates are subject to change and may be varied by the Income Tax Assessment Act.

Wills and Estates

We are often asked the question ‘What happens if I die without a Will?

Contact our Gold Coast Lawyers team for more information on Wills & Estates.

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What are the differences between Single and Multiple Testamentary Trusts in a person’s Will?

Contact our Gold Coast Lawyers team for more information on Testamentary Trusts.

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The benefits of having a Testamentary Trust for Tax Advantages.

Contact our Lawyers Gold Coast team for more information on Testamentary Trusts.

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The benefits of having a Testamentary Trust and using it to your benefit.

Contact our Lawyers Gold Coast team for more information on Testamentary Trusts.

Power of attorney and enduring guardianship are different legal documents designed to take effect if you are sick, absent or become incapacitated and are unable to make certain decisions for yourself.

The power of attorney

Enduring power of guardianship

Immediate concerns

A closer look

The effect on operations

The significance of a valid will

What happens if you are outside the country and you need someone to urgently act on your behalf, or are incapacitated and unable to make decisions for yourself?

Once you have permission to file the ‘main application’, you may proceed. In general, this application should demonstrate that:

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You may qualify to make this type of application if you were:

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In Queensland, a valid will is written and signed by either the person making the will (the Testator) or directed by the Testator in their presence.

The judge held[1] that four elements constituted the text being a valid will.

Please call Gold Coast Lawyers at OMB Solicitors to plan your estate.

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It’s human nature to refuse to accept the obvious – nothing is more certain than death and taxes. Making a Will isn’t morbid – it is the only way to protect hard earned assets.

Volcanic ash created an international debacle as people were stranded far from home; it highlights the need for a back up plan

Save thousands of dollars on private education with savvy estate planning

Do-it-yourself Will Kit – What you use before they come to see the lawyers to fix everything up…

Let the tax man pay for your children’s and grandchildren’s education.

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