Follow us on Social Media
All Posts By

Delaney & Delaney

May 20
0

When Can a Child Decide Which Parent to Live With in Australia?

By | Family Law

When a spousal relationship breaks down and there are children involved, there are few more fraught issues than those involving the children’s future living arrangements. This is particularly difficult when a child has a firm view about which parent he or she wants to live with, either all or most of the time.

Contrary to some popular misconceptions, a child’s specific age is not one of the determinants in deciding where the child will live when a court needs to hand down a decision in relation to parenting arrangements. Instead, a number of the key factors the court will assess in deciding the living arrangements are:

  • the child’s maturity;
  • his/her level of understanding of the overall situation;
  • whether his/her expressed wishes about where to live are well informed;
  • whether or not the child has been unduly influenced (usually by one or other of the parents, but also potentially by relatives, counsellors, etc.).

How does the process work?

The two main considerations for a family court are that a child/children maintain a meaningful relationship with both of the parents, and that children are protected from physical or psychological harm.

In terms of taking a child’s wishes into account, the court will generally rely on a ‘family report’ from a court consultant or trained counsellor, therapist or psychologist who has conducted an interview with the child.

The report writer will interview and observe the parents, the children and any other people living in the same household as the children, such as step-parents and step-siblings if the parent has a new partner. They will usually ascertain the child’s wishes and ask questions designed to aid assessment of the child’s maturity and level of understanding. The family report will then be prepared for the court with recommendations about the future parenting arrangements the judge should consider.

These are far from easy issues to decide. The difference in maturity between two siblings, for instance, may mean the court views the desire of the older sibling to stay with one parent as persuasive while the same view held by the younger sibling may not be given as much weight by the court. While the court will always be reluctant to separate siblings who demonstrate a strong attachment to one another, it is not likely to refuse the wishes of a sibling adjudged to be mature and insightful about the overall situation.

The role of an independent children’s lawyer

In some situations the court will appoint an Independent Children’s Lawyer to make an independent assessment of the child’s wishes and circumstances. This person will gather information from sources including teachers, doctors, psychologists, counsellors, police and child welfare authorities before making a decision whether to interview the child or not.

This appointment will often be made in cases where:

  • there are allegations of physical, sexual or psychological child abuse;
  • there is ongoing intractable conflict between the parents;
  • the child is alienated from one or both parents;
  • there are cultural or religious differences affecting the child;
  • there is a proposal to separate siblings into different households or take a child overseas.

Out-of-court options

Avoiding the cost and trauma of court proceedings should be the first aim in any family breakdown situation. An experienced legal professional can provide helpful advice on family dispute resolution options so that going to court becomes only a last option. These options can include taking account of the wishes of children through inclusive mediation, counselling and other means.

Family break-ups are stressful and all-consuming.  Assistance from legal professionals with expertise in this area will help clarify your options and the best way forward, particularly in taking account of the wishes of children so that a resolution which protects their welfare and helps them maintain a relationship with both parents, where possible, is reached.

Mar 20
0

Lawyer Says, “Leave The Will Alone”

By | Wills & Estates

In her Will, the deceased women gave her second husband the right to live in her home, free of all cost apart from rates and insurance, for the rest of his life.

The Will provided that after his death the house was to be sold and the proceeds divided between the three adult children of her first marriage. The deceased and her second husband did not have children of their own. The second husband was aged 60 of the time of his wife’s death and was living in her home throughout the marriage. Although, the children of the first marriage had the right to claim a better share from her estate they chose to make no claim. Despite his right to live in the home for the rest of his life the second husband was not satisfied and made a claim to full ownership of his late wife’s home. By lodging his claim for a greater share the second husband gave each of the three children an opportunity to claim further provision for themselves which they did.

When the parties and their Solicitors met to resolve their differences, it became clear that the cost of the debate could not be met out of the small cash estate left by the deceased. The cost of all parties with legitimate claims is usually paid out of the estate assets and the home had to be sold to meet the legal expenses and the claims of the three children. In the end the husband ended up with only a small sum of money, far less than needed to buy an alternative home. It was a poor result for him because he and the new wife he married only months after his first wife’s death, lost the opportunity to live cost-free for the rest of his life in a home they could call their own. The children, on the other hand, received their share of the mother’s estate many years sooner than they could have expected to receive it.

 

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Mar 20
0

Expert Advice In Family Law

By | Family Law

Adducing further expert evidence in family law proceedings

In property proceedings before the Federal Magistrates Court, an Order was made by the Court to appoint a joint expert to value a block of land.  Following the release of the joint valuation, the husband disputed the value based on the significant difference in value between the jointly appointed valuation and an earlier valuation obtained by him.  The difference in value was $210,000.00.

Due to this dispute, a conference was held with the legal representatives, the joint valuer and the husband’s valuer.  This conference did not resolve any issues.  Consequently, the husband filed an Application in a Case and supporting Affidavit.  This Application sought the Court’s leave to adduce evidence in the Court other than the evidence of the jointly appointed Court expert (in accordance with Rule 15.12 of the Federal Magistrate CourtRules 2001).

When the Court considered this Application, the Court also considered Part 15.5 of the Family Court Rules 2004 since the Federal Magistrate Court Rules did not set out any criteria for the Court to follow in exercising their discretion to grant leave to a party to adduce evidence other than the evidence of a joint expert.

The Court also referred to the matter of Knight and Knight [2007] FamCA 263.  In this matter, Bryant CJ, granted the wife permission to adduce evidence from an expert witness who was not jointly appointed after having regard to the following:

  1. whether it is necessary to resolve or determine an issue in the case;
  2. whether unnecessary costs will arise from the appointment of more than one expert, and, if so, whether the interests of justice outweigh the costs involved;
  3. considering whether the interest of justice are otherwise met, and in particular whether there would be any delay occasioned by allowing the wife to have an expert, and, if so, whether that is outweighed otherwise by the interests of justice.

In determining this issue, the Court considered the significant difference between the valuations and the significant effect the valuations have on the property pool.  The Court also noted the real property in question was not a usual suburban house, but a rural/residential block which value may be affected by other factors (e.g. the government’s selling of the land resumed for the Traveston Dam project – this issue was raised by both valuers).

The Court decided that in the interest of determining a just and equitable property division, it would allow the two valuers to give evidence at the final hearing.  At the final hearing, the Court will be required to determine which value will be place on the land (either the joint valuation or the husband’s valuation).  The Court cannot select another figure or average out the values at the final hearing.

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Mar 20
0

Drafting A Will

By | Wills & Estates

Considering Availability of Assets When Drafting a Will

Delaney & Delaney administers many deceased estates, acting for the executors of Wills.  On behalf of the executor, we collect the net assets of the deceased and distribute them in accordance with the Will.

It is common nowadays for people to deposit funds in various investment organisations who invest the funds for the investor, and in return, the investor receives dividends and sometimes a weekly pension.

We have administered a number of estates of deceased who held investments in these particular financial institutions.  Since the global financial crisis, some of these institutions have frozen the funds.  Now, instead of contacting the institution and withdrawing the deceased’s invested funds, the investment may only be withdrawn at the discretion of the institution.  Often, the investment may only be withdrawn in small instalments.  Consequently, the estate administration process can be prolonged unnecessarily and beneficiaries may not receive their gifts from the estate for years after the death of the will maker.

Anyone who makes a Will should consider how readily accessible his or her assets are, and whether particular clauses need to be drafted in the Will in consideration of frozen assets.

 

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Mar 20
0

New Regulations Establishing Governance for Not-For-Profit Sector

By | Not-for-profit

Established governance standards for entities registered with the Australian Charities and Not-for-profits Commission (ACNC) have now been finalised (NB Entities that are registered charities are automatically registered at the ACNC)

The governance standards are set out in the Australian Charities and Not-for-profits Commission Amendment Regulation 2013 (No. 1)(Regulations). The Regulations will require compliance by registered entities from 1 July 2013, although transitional arrangements will operate until 1 July 2017 in some circumstances.

Under the new changes, there are five governance standards. There are new requirements under each standard, which are summarised below.

NB: There is a new interpretation clause:

Requires the governance standards to be interpreted in a manner that is consistent with the objects of the Act:

  • to maintain, protect and enhance public trust and confidence in the Australian NFP sector;
  • to support and sustain a robust, vibrant, independent and innovative Australian NFP sector; and
  • to promote the reduction of unnecessary regulatory obligations on the Australian NFP sector.

The Five (5) Governance Standards:

1.      Purposes and not-for-profit nature of a registered entity

  • Requires registered entities to commit to a NFP/charitable purpose. Compliance with this standard will be met as a matter of course for registered charitable entities, given that establishing a charitable purpose is an eligibility requirement for attaining charitable tax concessions.
  • The standard requires a registered entity’s constitution to be consistent with NFP/charitable purposes
  • It requires the entity to make information regarding its purposes and activities publicly available (e.g. on website or social media, provide info on request, and display charity’s purpose at the charity’s office.
  • Charities can meet this standards by providing governing documents to the ACNC to be uploaded on the ACNC register (soon this will be able to be done online)

2.      Accountability to members

Requires registered entities to take reasonable steps to ensure that they are accountable to their members and that members have a reasonable opportunity to raise concerns about the governance of the entity. Minor amendments to Notes 1 and 2 emphasise the steps that a registered entity may take in order to comply with Standard 2 could include:

  1. the holding of annual general meetings with a question and answer session;
  2. providing members with an annual report;
  3. providing for elections for its responsible entities (e.g. directors and trustees); and
  4. providing an opportunity for members to propose and vote upon resolutions.

NB: companies, indigenous corporations, incorporated associations, and co-operatives that already meet their responsibility to hold meetings under its incorporating legislation will be assumed to meet this standard.

3.      Compliance with Australian laws

  • Standard 3 seeks to ensure that a registered entity’s ongoing operations and assets are protected by requiring that the entity comply with Australian law,specifically by prohibiting registered entities from committing indictable offences or engaging in other specified punishable conduct.
  • It allows the ACNC to take a ‘proportionate approach’ (may include regulatory action) to protect public trust and confidence, protect the assets of the entity, and ensure the registered entity continues to operate in a manner that is sustainable and consistent with its purposes.
  • NB does not have the effect of extending Australian law to overseas jurisdictions.

4.      Suitability of responsible entities

  • Provides that a registered entity must take reasonable steps to ensure that its responsible persons are not disqualified from the management of corporations (under Corporations Act) or from being a responsible person by the ACNC Commissioner within the previous 12 months.
  • The ACNC can take reasonable steps to remove the person if they are not satisfied of these things.
  • NB obligation applies to charity itself, not individuals.
  • To meet this standard, charities can search ASIC Disqualified Persons Register before appointing a responsible person. It can also require all responsible persons to sign a declaration.

5.      Duties of responsible entities (persons)

  • Seeks to ensure that officers and other persons responsible for registered entities conduct themselves in a manner that would meet certain standards similar to those imposed on directors under the corporations law. These standards include duties to act with reasonable care and diligence; to act in good faith and in the best interests of the entity; and to disclose conflicts of interest.
  • There are several ‘protections’ (or defences) for responsible entities in respect of breaches of Standard 5 (including making existing defences available under corporations law, and a defence based on responsible entities acting in good faith).
  • This also puts a ‘responsible financial management duty’on entities. This is a duty ‘to ensure that the registered entity’s financial affairs are managed in a responsible manner.’ This includes ‘putting in place appropriate and tailored financial systems and procedures’ proportional to the relevant entity’s size and circumstances, and to the complexity of its financial affairs. Procedures limiting sign-offs for bank accounts or the ability to write cheques, and requirements for approval of expenditure, may comprise reasonable steps in satisfaction of this standard.
  • As part of the general financial management duty, registered entities will eventually be required to meet specific financial reporting requirements. These regulations have not yet been finalised.

Charities can meet this standard by:

  1. Bringing the duties to the attention of responsible persons;
  2. Have processes in place to manage conflicts of interest;
  3. Take action if a responsible person is not carrying out their duties;
  4. Providing annual training for all responsible persons;
  5. Having a charter that sets out how responsible persons are to behave;
  6. Having a policy to require a responsible person not to vote on matters where the person has a conflict of interest;
  7. Having processes for the responsible management of money.

Entities that are registered at the ACNC should:

  • review their constitutions and internal policies and procedures to ensure that they are consistent with the minimum governance standards; and
  • take action to make any necessary changes to prevent non-compliance and potential enforcement action being taken against the registered entity or any of its responsible persons.

How will ACNC implement the governance standards?

The ACNC will generally apply the standards as a set of general principles, rather than as precise rules. This means a charity may choose how to comply, so long as it can demonstrate that it has acted appropriately taking into account factors such as:

  1. Size;
  2. Purposes;
  3. Reach (local, national, international);
  4. Activities;
  5. The people and causes it helps (such as vulnerable people);
  6. Source of funding (public donations or government funding); and
  7. Existing governance systems and processes.

Fiona Kennedy and Julia Marler both practice extensively in the charities and not-for-profit sector.  We would be happy to assist your organisation in identifying and fulfilling its compliance obligations under the new regime.

 

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Mar 20
0

Case Guardians

By | Family Law

Appointment of case guardian in family law proceedings

When husbands and wives or defacto partners separate, most parties will seek independent legal advice, negotiate a settlement and execute a document to formalise their agreement (either Consent Orders or Binding Financial Agreement). However, if one of the separating parties lacks the capacity to make their own decisions, then further steps are required to be taken in order for the Court to be satisfied that the settlement is just and equitable.

A client instructed us to represent her in finalising her property settlement. However, prior to providing these instructions, she was diagnosed with a degenerative illness which would eventually affect her capacity and ability to provide instructions. Since the client was aware that her health was deteriorating, from the commencement of our involvement in this matter, she provided us with her authority to discuss all matters with her Attorneys she had appointed under her Enduring Power of Attorney.

Prior to the parties reaching final agreement and signing the appropriate documents to formalise the agreement (Consent Orders and Application for Consent Orders), the client’s doctor issued a report stating that the client no longer had capacity to make day-to-day decisions. Since the client now did not have capacity, she could not consent to her own property settlement and she could not execute documents to formalise the agreement reached between the parties.

Notwithstanding the fact that the client had appointed Attorneys under an Enduring Power of Attorney (appointed when she had capacity), in order to obtain sealed property Orders from the Family Court, the Court requested that a Case Guardian be appointed to act on behalf of our client. One of the client’s Attorneys agreed to take on this role.

In order to have the Court appoint a Case Guardian for the client, we were required to look at Part 6.3 of the Family Law Rules 2004 (the “Rules”).

In accordance with Rule 6.09 of the Rules, a person may be a Case Guardian if the person is:

  1. an adult;
  2. has no interest in the case that would be adverse to the client;
  3. can fairly and competently conduct the case; and
  4. has consented to act as a case guardian.

We were also required to also look at Rule 6.10 of the Rules which sets out further requirements to be followed by the proposed Case Guardian, including providing evidence to the Court that the person being appointed as Case Guardian has been appointed manager of the affairs of the client and filing a Notice of Address for Service (to become a party to the matter).

Since these parties had reached consent in relation to property settlement, the Order seeking the appointment of a Case Guardian for the client was inserted in the Consent Orders to be filed with the Application for Consent Orders.  The proposed Case Guardian also executed an Affidavit outlining their suitability to be appointed as Case Guardian as set out in Rule 6.09 and Rule 6.10 of the Rules.

In the event a person was to lose capacity during contested proceedings before the Court, then an Application in a Case, supporting Affidavit and Notice of Address for Service would need to be filed in the Court by the proposed Case Guardian.

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Mar 20
0

Ghazel and Gay Marriage

By | Family Law

Family Court Rules Monogamous Marriage from a Country that Allows Polygamy Still Valid in Australia

In Ghazel v Ghazel and Anor [2016] FamCAFC 31, the Full Court of the Family Court of Australia ruled that a monogamous marriage from a country that allows polygamy was still valid in Australia.

The Full Court reviewed the Howard Government’s 2004 amendments to the Marriage Act 1961 amended by the Howard Government in 2004. Section 5(1) was changed to define marriage as “the union of a man and a woman to the exclusion of all others, voluntarily entered into for life”.

Section 88EA was added to the Act, saying “(a) union solemnised in a foreign country between a man and another man or a woman and another woman must not be recognised as a marriage in Australia.”

The Full Court also examined parliamentary material from 2004 and concluded that sections 5(1) and 88EA were amended to prohibit only gay marriage.

Like many cases, the ruling in Ghazel & Ghazel considers and affirms issues only tangentially related to the main dispute. It reminds us that nothing short of legislative reform from our elected representatives will expand the scope of marriage.

 

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Mar 20
0

Olympic Plans

By | Family Law, General News

Recognising an Unsustainable Plan before it is Put into Practice Gives Confidence the Future is Manageable

In the lead up to a global sporting event like the Olympics, fans will jump on the internet to find out exactly when their favourite event will be broadcast.  They eagerly set their alarms and wake in the dark of night to watch their heroes compete against the best in the world.

It’s fun, but after two or three nights it starts to take its toll.  Waking up at 6am, having gone to bed only a couple of hours earlier, is a lot less fun.  If you’re lucky, you’ll get through the day feeling a bit tired.  If you’re someone who needs their eight hours (like me) you’ll shuffle through the world like a zombie, desperate for the sweet release of sleep.

Towards the end of the Olympics we have to decide whether to miss out on a nail-biting final to catch up on rest or spend the next few days in a sleep-induced haze.  It’s a stark reminder of the difference between making plans and living them.

Section 60CC(3) of the Family Law Act 1975 describes issues parties must bear in mind when planning children’s orders.  In particular, section 60CC(3)(e) requires consideration of “the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain personal relations and direct contact with both parents on a regular basis”.

When proposing orders it is easy to say “it’s in the children’s best interest to spend equal time with both parents on a week about basis.”  Less easy is to ask “is the children spending time with both parents on a week about basis sustainable in the long term?”

It is not an easy question because the answer could be unwanted.  A parent may have work commitments, or live in a distant location, or a child might need to frequently attend extra-curricular activities (like swimming training).  There are any number of reasons why living a week about schedule would be impossible.

Anticipating this issue is a good thing.  It is far better, for both parents and children, to recognise an unsustainable plan before it is put into practice and starts causing problems.  Not only does this drastically reduce the likelihood of having to renegotiate arrangements only months after they’re (supposedly) settled, it gives both parents comfort and confidence that the future is manageable.

Staying up all hours is fun, but there’s a reason the Olympics only take two weeks out of every four years.

 

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Oct 17
0

An Unsent Text Message Can Count as a Will – But at What Price?

By | Wills & Estates

In Re Nichol; Nichol v Nichol [2017] QSC 220, the Supreme Court of Queensland ruled that an unsent text message on the mobile phone of a deceased person, could be treated as a Will pursuant to section 18 of the Succession Act 1981 (Qld).

he effect of the text message was to bequeath the deceased person’s Estate to his brother and nephew, rather than to his wife of one year, with whom he had had a difficult relationship. The mobile phone with the unsent message was found with the deceased when he was discovered after tragically taking his own life. The deceased had made no formal Will during his lifetime.

Generally there are very strict execution requirements for a Will. It must be in writing, signed by the person making it, dated when it is signed, and witnessed by two independent witnesses. If these formalities are not complied with, the Will may not be valid.

The outcome of the case is a surprise for Estate lawyers, who meticulously ensure that the Wills they draft for their clients comply strictly with the legislative requirements.

The case of Re Nichol shows that the courts are endeavouring to keep up with modern times, where it is becoming common for people to record their feelings and wishes in electronic form. The general perception that a binding legal document must display a handwritten signature is fast going out of fashion. In response to the changing times, courts are taking a more flexible approach to Wills that are not executed in accordance with the traditional requirements.

The High Price of a Cut-Price Will

However, the court’s decision in Re Nichol does not mean that there is no need to make a formal Will.

In circumstances where a Will is properly drafted and executed, having complied with the strict legislative formalities, the process of Estate administration is much more smooth and inexpensive.

There is no doubt in this case that a substantial portion of the Estate would have been spent in litigation costs. There would also have been significant stress for all parties involved.

The relatively small cost to have your Will properly drafted and executed while you are alive, could save your Estate thousands of dollars in litigation costs after you die.

What Did the Deceased’s Brother and Nephew have to Prove?

In limited situations, an informal document that purports to state the testamentary intentions of a deceased person can be classified as a Will, or part of a Will. The Court must be satisfied that the person really intended that document to be a Will.

Proving that a person really intended an informal document to be a Will is a strenuous task.  It involves compiling evidence to prove complex legal concepts, including the intent to make a Will and the testamentary capacity to make a Will.

In Re Nichol, after considering all of the evidence, the court found that the deceased had testamentary capacity and that the text message was intended to operate as his Will upon his death.

The Court also decided that almost all of the costs of the parties to the litigation would be paid out of the deceased’s estate. These costs would have been substantial.

Delaney & Delaney has over 100 years’ experience drafting Wills, advising on Estate planning, and administering Estates. We welcome you to contact us today so that you have the peace of mind that your wishes are in a form that the Court will simply accept as valid.

The case of Re Nichol can be accessed here: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/qld/QSC//2017/220.html

 

By Ingrid McCabe

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Oct 16
0

Brisbane Family Law Centre’s 2017 Pantomime

By | General News

We are excited to announce our Principal Solicitor, Ms Fiona Kennedy, will be playing the part of “Kazza” in Brisbane Family Law Centre’s “Cinderella, Queen of the Desert” pantomime.

The pantomime also stars Her Honour, Justice Margaret McMurdo, playing Irma Meena (Cinder’s step-mother) and esteemed family law barrister Jennifer McCardle,  playing Cinderella. Justice Forrest of the Family Court is playing Johnny Young.

All profits raised by the Pantomime will be donated to the Women’s Legal Service to assist them in their important work helping women and children to safer futures.

The show will be held at the Princess Theatre, Woolloongabba on Saturday, 21 October 2017 commencing at 7pm. Get your tickets now before it’s too late.

https://www.trybooking.com/book/event?eid=284996 

.

Oct 04
0

An Insight into Special Disability Trusts

By | Wills & Estates

Special Disability Trusts can be established to great benefit for vulnerable people with a disability. Bill Delaney shares his expert insight into how Special Disability Trusts operate.

What Is a Special Disability Trust?

A kind of Trust established for Succession Planning for current and future care of a person in a family with a severe disability or severe medical condition.  There is only one beneficiary namely, the person with the disability.

It is not called a “Special Disability Trust” because the Disability is “Special”.  It is “Special” because of the benefits available through Centrelink.

What is the purpose for the Trust funds?

The Trust fund can only be spent on the care and accommodation needs of the beneficiary. However, up to $11,500 can be applied each year for other needs on related items.  This is called, “discretionary spending”.  The Trust cannot pay a family member for providing any service or accommodation.

Is there an end date to the Trust?

The Trust comes to an end on the date of death of the beneficiary or when all funds have been expended.

So there needs to be a clause in the Trust Deed, directing the Trustees to pay the balance to a nominated person or persons, after death.

How much money can I contribute to this Trust Fund?

Anyone can contribute but the maximum allowable is $500,000.  Amounts over this can still be received but the concessions do not apply to the excess.  A contribution of some or all of this amount by a Pensioner, is not included in the asset test of that Pensioner.

Centrelink Benefits for the Beneficiary 

The beneficiary can own the principal place of residence (which is exempt in the asset test) plus up to $650,000 in other assets in the Trust and still receive a full pension.

The income of the Trust, regardless of what profit is made, is not added to the Income Test for the beneficiary.

The beneficiary can work up to 7 hours a week and can receive normal wages.

Discretionary expenditure includes private health insurance, medical expenses and maintenance of the Trust property.

Tax Treatment

The Trustee lodges a Tax Return and is assessed at the beneficiary’s marginal rate.  There are CGT advantages when Trust assets are sold.

Stamp Duty

As a general rule no Stamp Duty is payable when the Trust acquires a property for the beneficiary’s principal place of residence (PPR).  A contribution of a residential home to the Trust for the use of the beneficiary as a PPR is also free of stamp duty.

What are the Disadvantages?

Goods and services including accommodation supplied by the beneficiary’s family members cannot be paid for by the Trust.

Example:The parents of a beneficiary, who provide the beneficiary with accommodation in their home or in another place owned by them, cannot be paid rent or board from the Trust.  If another family member, parents, spouse or children of the beneficiary provide care or support, they cannot be paid for those services from the Trust.

Is the Beneficiary Eligible?

The Trust is only available if the beneficiary qualifies as having a severe disability or severe medical condition.  Medical and other health reports would have to be obtained to prove eligibility.  There may be a need for other evidence to prove that the condition is severe and is unlikely to change.

The persons proposing to establish the Trust will need to spend a lot of time and money to get this evidence.  They will then need to get expert Financial Tax Advice and Medical Advice which could be costly.  If they believe they have good reason to proceed they should make an appointment with the Centrelink Special Disability Trust official for final advice.

If a decision is made to proceed it is wise to engage Lawyers to draft the Trust Deed which must comply with the Model Trust Deed approved by Centrelink.

Who Can be a Trustee?

The Trust needs two or more Trustees.  They cannot include the beneficiary or the person who established the Trust.  They should be independent but family members.  They have to be Australian residents and they must not have any prior problems with bankruptcy or and not convicted of any dishonest conductor an offence under the Veterans’ Entitlements Act.

Obviously there is a need to appoint a person who will have a long term commitment which is likely to mean the appointment of someone much younger than the beneficiary and this can be an issue if there are no suitable persons.  The same applies for the need for a Nominator/Appointor who has the task of appointing additional Trustees when the need arises.

What to Think About

There are many reasons why it can be advantageous but there is a lot of work to be done before you can be confident that it is suitable for you, your circumstances and your beneficiary’s circumstances.

Your decision hinges on the financial and tax advice and the advice and guidance you get from the Centrelink Official.

Speak to One of Our Solicitors

Our Estate solicitors are experienced in drafting Special Disability Trusts, which can be established to great benefit for vulnerable people with a disability.

We invite you to make an appointment with our Mr Bill Delaney, Ms Julia Marler, Ms Kristy Schaefer, or Ms Anna Delaney to discuss whether this is an appropriate Trust for your succession planning.

 

By Bill Delaney

 

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.

Jun 27
0

Changes to the Succession Act 1981 – bringing defacto relationships into line with marriages

By | Family Law

Kristy Schaeffer and Bill Delaney discuss the implications of recent amendments to the Succession Act 1981

From 5 June 2017 a number of changes to the Succession Act 1981 came into effect (pursuant to the Court & Civil Legislation Amendment Act2017 No. 17).  These changes have the effect of bringing de facto relationships into alignment with traditional marriage relationships in two particular ways:

  • Firstly, a new section 15B provides that the end of a defacto relationship now has the same effect on a testator’s Will as a divorce – that is, it revokes any benefits left to the testator’s former defacto partner and revokes the former defacto partner’s appointment as an executor.  These provisions will take effect unless a contrary intention appears in the Will (section 15B(3)).  We highlight for our clients that there still remains an important practical difference between a divorce and the end of a de facto relationship, namely, that a divorce involves the issue of a Divorce Order from the Federal Circuit Court of Australia.  There exists no equivalent formal piece of evidence to prove the end of a defacto relationship.  For clients who are in a situation which involves the end of a defacto relationship, we recommend you consider reviewing and possibly updating your Will, or providing us with instructions to formalise or document the end of the defacto relationship to ensure the new s15B applies in your situation.
  • Secondly, changes to section 40A(2) and (3) now clarify that a stepchild includes the child of one party to a defacto relationship as a stepchild of the other party.  Accordingly, such a stepchild is an eligible applicant to bring a Family Provision Application against the estate of the deceased ‘step-parent’ provided the defacto relationship subsisted at the death of either of the parties to the defacto relationship (this is the same position as a stepchild where there is a marriage relationship between the child’s parent and the other party which subsists at the date of death of either party).

We have been assisting clients with estate planning, including the making of Wills and enduring documents, estate administration and estate disputes for over 100 years.  Particularly if you have an estate with complicated assets or family structures we would recommend that you come and see us for advice on the many issues you should consider when making your Will and establishing a thoughtful, considered and fair estate plan.  We are interested to ensure that our clients make good decisions to protect their estate from costly estate litigation and protect your family members from the risk of conflict and disputes following your death.

By Kristy Schaeffer and Bill Delaney

© Delaney & Delaney Solicitors. This publication is for information only and is not legal advice. You should obtain advice specific to your circumstances and not rely on this publication as legal advice. Should you have any queries in relation to this publication, please contact our office on (07) 3236 2604.