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Wills & Estates

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

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.

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 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.