When people come to plan out their affairs for the later stages of their life, they are generally encouraged to nominate an enduring power of attorney.
This is a legal document used to appoint a person to make important decisions about their property and/or financial affairs should they lose capacity to do so on their own. By doing so, you can have some control over how your financial affairs are conducted once you lose personal capacity, rather than a public guardian or the courts where no enduring power of attorney exists.
The attorney you appoint can manage your bank accounts, pay bills and other debts, and sell or buy property and assets on your behalf.
Who should you appoint as an attorney?
An attorney should be a responsible person you trust, and preferably someone with an understanding of, and experience in, managing sometimes complex financial matters. They may be a family member, a close family friend, or a trusted professional such as an accountant, financial adviser or lawyer.
Importantly, you can also appoint more than one person with enduring power of attorney. When doing so, these attorneys can act:
- Jointly and severally: the attorneys can make decisions together or separately;
- severally: they can make decisions independently of the other attorneys;
- jointly: the attorneys must agree on all decisions.
It’s important to seek the benefit of legal expertise when appointing more than one attorney. The people chosen need to be able to cooperate with each other and have the interests of the principal – the person who appointed them – uppermost in their mind when fulfilling the role.
Why appoint more than one attorney?
There are numerous reasons a person may appoint more than one person with power of attorney. Perhaps one or more of the people you appoint travels a lot, or perhaps you just want a ‘checks and balances’ approach that joint or several attorneys can bring to their roles in managing your affairs.
Joint attorneys, it must be remembered, need to both agree in order to act, including doing such things as attending a bank together if signatures are needed or to withdraw funds from the principal’s account. This setup can act as a safeguard that both will act without self-interest when it comes to managing your affairs. Conversely, jointly appointed attorneys can sometimes lead to conflict and inconvenience, particularly where, for example, two siblings who do not get along hold the roles and cannot agree on the details of managing your financial affairs, or are not always available to make joint decisions.
Attorneys appointed jointly and severally can make decisions independent of each other, which can lead to mistrust and conflict if there is disagreement on how each of them has acted. Suspicion by one attorney of financial abuse by another could – in a worst case scenario – lead to litigation in order to stop one of the parties acting any further.
There is also the issue of appointing a person who is older or of similar age to you, who may either die or lose capacity before you do. In the case where one of your attorneys dies or cannot continue in their role, what happens next depends on how the attorneys were appointed. Where attorneys were appointed jointly and one of them is either unwilling or unable to carry out the role, the enduring power of attorney will automatically cease. One of the advantages of appointing attorneys jointly and severally, or severally, is that the power continues despite one of them being unable to act. The other attorneys continue to make decisions under the power on your behalf.
When does an enduring power of attorney end?
People of any age can make an enduring power of attorney so long as they have the mental capacity to understand the nature and effect of the power when they sign the document.
An enduring power of attorney ends:
- By revoking it (so long as you have mental capacity at that time);
- at the time of your death;
- when only one person was appointed as your attorney and dies or is unable to continue;
- when you have appointed two or more attorneys to act jointly and one of them dies or can no longer act as your attorney.
Enduring power of attorney may also end due to bankruptcy and other legal reasons. In these cases legal advice should be sought.
If your enduring power of attorney has ended and you no longer have the mental capacity to make a new one, the Guardianship Tribunal may be able to make orders so the enduring power of attorney can continue. For example, if your enduring power of attorney has ended because a jointly appointed attorney has died, the Tribunal has the power to reinstate the enduring power of attorney so that it can continue in your best interests.
The importance of legal advice
Appointing an enduring power of attorney is an important decision to be made as part of the estate planning process. As we’ve outlined here, there are pros and cons to empowering more than one person to be an attorney who can manage your financial affairs.
Consulting experienced estate planning lawyers with years of experience in this area of the law is a wise course of action. At OMB Solicitors we can expertly advise you on the benefits and the potential pitfalls when it comes to enduring power of attorney, particularly the issue of appointing more than one attorney. Contact our Gold Coast lawyers on (07) 5555 0000.
In this video, OMB Solicitors Associate Steven Mahoney discusses the difference between a General Power of Attorney and an Enduring Power of Attorney.
Contact our Gold Coast Lawyers team for more information here Wills & Estates Enquiries.
Smartphones have put a video camera in the pocket of nearly every person you see, with widespread and profound impacts for various sections of society, including security, surveillance and in particular, the law.
In recent years the prevalence of mobile recording has resulted in a number of court cases debating whether a ‘video will’ made by someone who later passes away can be valid and enforceable. In Australia, for a document to be recognised as the will of a deceased person it must be in writing and signed by the testator (the will-maker) in the presence of two or more witnesses present at the same time. How then, can a video recording of a will be valid?
While the law is often slow to adapt to the legal impacts and implications of new technology, the courts have set down a number of important principles when it comes to video recording your will and more generally, what are termed ‘informal’ wills.
A recent case example
The case of Radford v White decided in the Queensland Supreme Court in 2018 provides a good recent example of this specific issue.
In this case, Radford was the de facto partner of Jay, a 39-year-old man who bought a new motorcycle. Before he picked up the motorcycle, Radford encouraged Jay to record a video in which he directed what he wanted to happen with his assets should he pass away. In the recording, Jay said the majority of his assets should go to Radford and that nothing should go to his “soon to be ex-wife”, White.
Later that day, Jay had a road accident on his new bike, sustaining serious injuries including a severe head injury. Although later discharged from hospital, 14 months later he passed away from an overdose of prescribed painkillers. Radford made an application to the court seeking an order that the video recording Jay had made be considered a valid will, while Jay’s ex-wife, White, opposed Radford’s application.
The court decided in Radford’s favour that the video recording did form Jay’s will. It found that:
- the video recording was a ‘document’;
- the document purported to state the testamentary intentions of Jay; and
- Jay demonstrated an intention to complete the formalities of a will at a later date by stating in the video that he’d “fill out the damn forms later”.
The decision in Radford v White joined a number of other cases where it was found a document other than a written, signed and witnessed will can operate in that capacity for the deceased, including:
- notes on a mobile phone (Re Yu );
- Microsoft Word documents (Yazbek v Yazbek );
- handwritten documents not signed or dated (Public Trustee v New South Wales Cancer Council );
- letters to solicitors (Permanent Trustee Co Ltd v Milton (1996));
- instructions to solicitors (Saltmer v Renrick Lawyers Pty Ltd );
- audio recordings (Re Estate of Carrigan (dec’d) ).
What are the risks of video recording your will?
Despite the decision in the court cases above, it’s not advised you rely on a video recording of your will or other informal means in order to have your wishes carried out after your death. A properly executed written will remains the surest way to ensure your instructions are adhered to when you’re no longer here.
By making a video will, you leave it in the hands of the courts to determine whether it is a valid expression of your wishes. If the court decides the recording is not valid (and there is no other will), you could be declared intestate and your assets and belongings be distributed by the state without taking account of your wishes.
In determining the validity of an informal will such as a video recording, a court will take into account:
- That the video is an actual record of the testamentary wishes of the testator and must clearly address the disposal of their property and assets, in contemplation of death.
- That the video shows an intention, without anything more, to operate as a will. This means it will be likely invalid if it is referred to in the recording as a draft or a letter of instruction, for example. It’s wording cannot also consist of mere wishes or requests.
- That the video be a ‘document’. This is the easiest element to establish given courts have previously found that any disk, tape, soundtrack or other device in which sounds are embodied and also film, are considered a document.
It should be noted that the onus of proof that the video is the will of a ‘capable’ testator lies with the person (usually one of the beneficiaries) claiming it is the deceased person’s will. The court may read direct statements and notes by the deceased, and evidence about when and how the video was recorded, to make its decision.
Also note that if a statement in a video recording which purports to be the final will of the deceased conflicts with the terms of a written will in their name, the written version will prevail.
While there are judgments in Queensland and some other states which have supported the validity of informal wills in the form of video recordings, preferring this format to that of a written, properly executed will remains ‘Russian roulette’ in the eyes of legal experts in estates and wills. There is no guarantee a court will come to the same conclusion about a video will in a case based on similar facts.
In the end, to guarantee your instructions are carried out as you want them to be after your death, it’s best to make a proper will with the advice of legal experts experienced in estates and wills, such as OMB Solicitors. This way you don’t leave it to chance that your will is legally enforceable, avoiding a potentially costly mess for your beneficiaries. If any of the issues raised in this article provide you with questions or concerns, contact Gold Coast Lawyers today on (07) 5555 0000 or [email protected]
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We are often asked the question ‘What is a Will & Enduring Power of Attorney’?
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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.
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.
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 that.
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 [email protected]
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.
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.
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.
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.
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.
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.
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.
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.