Estate Planning

Q&A: A simple Will

Thinking about preparing a Will? While your Will may be rather simple, our Solicitor Kaisha points out some things to consider over at Echofied.

Q:

I need to write a Will. As it is likely to be rather simple (leave everything to my wife, then daughter) can I simply type it out and store it securely, or is legal advice necessary?

A:

Hi Michael,

Whilst your wishes may be rather simplistic and legally you are allowed to write your Will yourself, a DIY Will template is not always a great idea! Will drafting can be quite complex. There are certain ways of writing clauses in Wills that have been tried and tested over the years, so as to remove any confusion or uncertainty about what you are trying to achieve with your Will. There are also very strict rules about signing your Will and having it witnessed. Common mistakes in signing your Will could mean that your Will is invalid.

There are some situations where I would consider it absolutely necessary to obtain legal advice:

  • If you own property or investments in another state or overseas.
  • If you own a business or are an officer of a Company.
  • If you are financially responsible for someone other than your immediate family.
  • If you are trying to set up a testamentary trust for a particular beneficiary.

Whilst you might save money with a DIY today, there may be large costs to your Estate if you get anything wrong.

Need to get your Will organised before the New Year? Talk to the team at Coutts Solicitors & Conveyancers.

This Q&A first appeared online at Echofied

Wills: A family recipe

As the festive season starts to crank up people are busy planning their Christmas dinners. Each family have their own traditions and this is reflected in the different types of food they serve up. We take care to plan meals that people can share and enjoy.

When discussing a Will with a client, different family arrangements often come up as well. Common ingredients we use to provide a person with peace of mind that their final wishes will be carried out include:

2 cups of fairness

Does an equal split of your assets among children result in a fair outcome? Maybe one child has a greater need to be provided for.

1 cup of kindness

Is there a charity who could benefit from a gift? Leaving your favourite charity some money is a great way to support their work.

1 cup of forgiveness

It is common for people to give a son or daughter a lump sum gift towards the purchase of their first home with a joking comment “here is an early inheritance”. But what does that expression mean? Does it mean it’s a loan from you that they need to repay to your estate? Or, is it meant to come out of their share of the estate? Whatever you mean by it, we need to include a specific clause.

1 tablespoon of executor clauses

This is to ensure that your executor is not just appointed, but is empowered to undertake a variety of roles to properly see to the administration and distribution of the estate.

Method

Once you have your ingredients all combined, we blend it together. Oh, and speaking of blended families, if you own property with your partner, how you hold that property is vital. If you are both joint tenants, the other joint tenant will automatically inherit your share in the property regardless of what your Will states. This can cause tension as people can have real fears that their own children might miss out because the new partner takes the house - often the main asset of the estate.

For alternative toppings, what if the partner re-partners and they update their Wills? What if they have a falling out with your children? These are all valid concerns but if you own the property as tenants in common, your Wills can state who you wish to give your share of the property too. This will result in your partner and your children ending up on title together. This could be fantastic and everything you dreamed of or, a recipe for disaster itself.

These are not easy decisions to make and much like cooking a macaron, getting the balance between your partner and your children is vital, so it doesn’t all collapse in a big mess.

Serve your Will with the correct execution - two independent witnesses, both over eighteen who know exactly where to sign. Store in a safe place. If properly drafted, it should stay fresh for many years to come.

Remember - everyone’s family is different. If you think it’s too hard to make arrangements in a Will this doesn’t mean you should toss it into the too hard basket. Departing the world without a Will is harder on those left behind.

Need to get your Will organised before the New Year? Talk to the team at Coutts Solicitors & Conveyancers.

What is a Power of Attorney?

Kaylene-Power-of-Attorney.jpg

A Power of Attorney is a document that allows another person to legally manage your financial and legal affairs. A Power of Attorney can be General or Enduring.

More commonly used is the Enduring Power of Attorney that many people set up at a time in their lives when they are managing their own affairs quite well. However, understanding that sometimes health can fail, they chose to set up a Power of Attorney on their own terms and nominate that it will commence operating at a later date (usually when their treating doctor determines they are no longer capable of managing their own affairs).

What can a Power of Attorney do?

An attorney can undertake any actions that you can- they can pay your bills, liaise with government departments and withdraw money from your accounts, in addition to open and close bank accounts, enter into lease and hire purchase agreements and even sell your house. So it is vital that you trust the person you appoint as your attorney. It can be helpful to have more than one to promote accountability. An attorney must avoid placing themselves in a position where their interests are in conflict with yours. A common example is where there is an adult child still living at home with shared expenses who then manages your money.

An attorney must act in accordance with your directions. If you have set up a Power of Attorney and you now wish to change or stop it, you must formally revoke this Power, provided you have the capacity to make that decision.

If your attorney wants to deal with your land, the Power of Attorney must be registered with the LPI (formerly known as the Land Titles Office). If a registered Power of Attorney is revoked, that revocation should also be lodged with the LPI.

What is a General Power of Attorney?

A General Power of Attorney is convenient to set up for a specific purpose. For example, if you have an overseas trip planned and while away you will have legal documents that require attention, perhaps you have bought a house and settlement is while you are away, or you have purchased an unregistered block of land that might register during your trip. Allowing a trusted family member or friend to sign documents on your behalf means the transaction will continue in your absence. A General Power of Attorney will automatically cease if you lose your mental capacity.

Why appoint a Power of Attorney?

A Power of Attorney is a vital document to help a person maintain independence in their later years, should they actually need it. It allows them to retain control of their affairs by stating who and on what terms their financial and legal affairs may be managed. A Power of Attorney should be appointed in advance of a situation where you may find yourself lacking the mental capacity to make their own decisions.

We often receive enquiries from people who have a parent that has developed dementia, alzheimer’s diseases or are otherwise not able to manage their own affairs. The children state that they have been able to help their parents in the past but now an organisation, often a bank, is requiring a formal Power of Attorney. The difficulty with this situation is, when a person lacks the mental capacity to manage these transactions, they almost always lack the mental capacity to instruct a solicitor to prepare a Power of Attorney and our hands are tied.

When a person has lost their capacity and either needs a Power of Attorney made, or, needs to revoke a Power of Attorney, they or concerned people need to approach the Guardianship Tribunal for a decision to be made on that person’s behalf.

I have been left out of a Will! - Can I make a claim?

When a person dies, it is often a troubling time. When a person finds out they have been left out of a Will it can increase the stress, particularly if that news comes as a surprise. There are two main things to consider if you have been left out, if you are considering what your legal rights are: are you an eligible person and, if so, what are your needs to be provided for?

Who is an eligible person?

A spouse or a child of the deceased are considered to be eligible persons. There is a third category that defines any person who was in a relationship of financial dependence with the deceased to be eligible. We are waiting for a few decisions to be made giving us examples of what types of people may fall into this category. But until it is thought that some types of carers who are paid in kind (perhaps with free food or board) for their assistance and grandchildren who receive financial support from the deceased. But it is still a fairly untested category.

What kind of needs does the Court consider?

When making a claim you will need to provide solid evidence of your financial circumstances: what assets you own, how much super you have, your income, your debts and any future needs (such as medical and education expenses). If you have a spouse, the same information will be required from them too. Then your position will be compared to those named in the Will (the beneficiaries). If you are in substantially worse of position, the Court may order that some of the estate is given to you. The Court will also consider your relationship with the deceased, any of your conduct that may be relevant to why you were left out in the first place and of course, the wishes of the deceased. After all, the fact they choose to disinherit you will not be ignored by the Court.

It is very important to know that you only have 12 months from the date of the deceased’s death to file your Summons, commencing your claim. Although it is possible to commence an action after 12 months has passed, you need to convince the Court that they give you their permission to start your claim.

Because of the strict time requirements imposed by the Court, if you have been left out of a Will you should legal advice as soon as possible with our experienced estate litigation solicitors.

A note to those people who have a Will already or are considering making a Will that will leave someone out. It is very important that you meet with an experienced Will practitioner to discuss your particular circumstances and what can be done to protect your estate against silly claims.

Coutts can help you with your Will or advise you of your rights if you have been left out of a Will. Contact Coutts Solicitors & Conveyancers today.

What happens if a person dies without a Will in NSW?

What happens if a person dies without a Will in NSW? If a person dies without a Will it is up to a family member or a friend to apply to the Supreme Court for Letters of Administration. The process is very similar to obtaining a grant of Probate on a Will, but there are a few more steps involved. When someone leaves a Will, they are entitled to leave their items to whomever they please. However, in the absence of a Will, a person’s property is distributed in accordance with the law. It will automatically pass to a person’s spouse, then any children, then parents and so on and so on. Things can become complicated very quickly where there is more than one “spouse”. Because the definition of spouse is fairly flexible, it is possible for someone to have separated from their husband or wife without being divorced and living in a de facto relationship and then there are two potential spouses to deal with. Things can also become complicated where there have been deaths, divorces and remarriages or other events that have changed people’s surnames- generally where this has happened, the Court requires original birth, deaths and marriages certificates. So the paperwork required can become pretty expensive, pretty quickly. All applications for Letters of Administration would be filed within 6 months of the person passing away. Sometimes a person has left document that is meant to be a Will but it has issues, such as it is not signed by the deceased, or it was signed by the deceased but not witnessed, or, not clear what the person wanted. Another situation can arise where a valid Will has been made but the executor or executors named have all since passed away. In these cases Letters of Administration is still applied for but these documents are attached.

If someone has passed away and they only owed joint property, for example a joint bank account and they owned a house as a joint tenant, then it’s probably not necessary to apply for Letters of Administration. However, you still need to transfer the property into the survivor’s sole name to ensure the title deed is updated.

Coutts Solicitors and Conveyancers are skilled at preparing the necessary affidavits, detailing how it is known there isn’t a Will and the thorough searches for the Will that have been undertaken and applying for Letters of Administration. We can provide advice about which family members will be inheriting and undertake all of the communication, as well as explaining to other disgruntled people why they might be missing out.

If you are next of Kin to someone who has died without a Will, contact Coutts Solicitors for expert advice on 1300 268 887.

If you are an Executor of a Will and want to know what to do, read this article - I am an Executor... what do I do?

What is an Enduring Guardian?

An Enduring Guardian is someone that can be appointed to make lifestyle and certain medical decisions on your behalf, if you lose the ability to make those decisions for yourself. Your guardian can decide where you will live and arrange personal services, such as physiotherapy, hair cuts and most dental treatment. Much like an Enduring Power of Attorney, an Enduring Guardian’s appointment will endure if you lose the capacity to make medical and life style decisions for yourself. Your guardian cannot consent to medical or dental treatment on your behalf that you object to. You can appoint more than one Enduring Guardian and alternative Guardians if your first appointment is unable to undertake that role. Someone that you trust and who understands your values is a good choice. If someone has already lost their capacity to enter into such an arrangement it is possible to seek an order from the Guardianship Tribunal however, this can take some time.

An advanced care directive is slightly different to an Appointment of Enduring Guardian. Usually an advanced care directive is organised by the treating hospital for their own purposes and has more details about specific medical treatments then an Appointment of Enduring Guardian.

It is important to plan ahead for the future. By appointing a guardian now, you have security knowing that the person looking after your medical and life style decisions is of your choosing and formal arrangements are in place to allow this to occur without any uncertainty or family arguments.

For any further advice or legal assistance on this issue, please contact us at Coutts on 1300 268 887

What is a Will?

What is a Will? A Will is a written record about how you would like your possessions and property to be distributed when you die, and, who you wish to be in control of that process. It’s something we all agree is an important task for our future, but we often don’t make the time to write those plans before we die. It’s important to plan ahead when thinking about your Will, you need to decide who will be your beneficiaries, the person or people that will inherit your property and the executor (the person who does the actual giving away). A few alternative executors in case the person you chose is no longer around when you pass away is a good idea too.

It is important that everyone has a valid will when they pass away. Without a Will, your next of kin will have to apply to the Courts for a document called Letters of Administration, which then allows that person to distribute your estate in accordance with a set formula that may not be what you actually wanted.

Like many things in life, it pays to think ahead. If you put off making your Will it might be too late. While we can and do prepare Wills for people in hospital, it generally quite rushed and not ideal.

During the appointment, there are two other estate planning documents we can discuss with you. They are an Enduring Power of Attorney and an Appointment of Enduring Guardian.

There are certain legal requirements for a valid will and while attempting to prepare a “DIY” Will, many people don’t end up with a valid Will and this can result in a costly legal battle. It is also possible to have the NSW Public Trustee prepare your Will. If you are considering this option please be fully aware of the fees that the trustee will charge as your executor. However, using a Solicitor to draft your Will provides you with many more options and the cost is fixed, not charged as a percentage of your estate.

For any further advice or legal assistance on this issue, please contact us at Coutts on 1300 268 887.

Joint tenants and tenants in common

What are Joint tenants and tenants in common ? If you and your partner have just thought about purchasing a property or are in the process of purchasing a property this is a question you will need to know the answer to. When you review your contract with your conveyancer you will be asked if you would like to purchase your property as Joint tenants or tenants in common. Most people are not aware of this until the appointment and do not realise the implications of their choice. We at Coutts endeavour to help you make the best choice for your current circumstances ensuring you have an easy transaction from beginning to end. As like every person, buying a property is quite complex and it can be a stressful period. One of the biggest decisions you both have to make is whether you wish to buy the property as Joint Tenants, Tenants in Common in equal shares or Tenants in Common in unequal shares. In this article I will describe to you the differences between joint tenants and tenants in common.

It is important to pick your shares earlier on in the purchasing transaction. During your Contract Review with your Solicitor or Licensed Conveyancer they will describe the difference. This article is going to give you a clear understanding on the differences and describe what these mean in "layman" terms so that any persons,  purchasing a property can make an easier decision prior to signing on the dotted line.

It is important to understand, discuss and decide on your shares prior to completion date, as if you make the wrong decision it will cost time and money to amend your shares later on down the track. It is not impossible to change your shareshowever, choosing the most suitable option early on will save you time and money and protect your best interests.

Joint Tenants

Usually, married couples are joint tenants. They own 50% of the property each. This means that if one party was to die the share he/she hadat the time of death can be transferred to the surviving partner. Therefore one person would have the whole 100% share.

One thing most people don't know about Joint Tenants is that you cannot "leave" your share to another person. For example if you and your de facto are joint tenants and you pass away you can't leave your share to your children regardless of the terms of your will. Your share will be left automatically to your de facto partner. It is up to them whether they choose to leave part of the property to your children when they pass away.

Tenants in Common in equal Shares

Tenants in Common in equal shares are normally made by couples who purchase who are not married. This means that yourself and your partner own 50% of the property each and if one of the partners were to pass away their 50% share will be left in accordance with the terms of their Will. This is becoming more common with second time around partnerships and couples with children to previous marriages.

It is very important that if you select to be a tenant in common that you prepare a Will immediately. In the Will you can set out how you wish for your 50% share to be divided. So, what does this mean for your partner who is left behind? It means that the people who are entitled to your share can force your surviving partner to sell the property to obtain your share of the property.

I have in previous years seen where this is an issue. An elderly person has been made to sell the property because step children wanted to sell the property to obtain their share of their parents half of the house. In this case we can create a life estate later on to protect the interest of an elderly person to ensure that they can live in the property until such time as they pass away or decide to move on.

Tenants in common in unequal shares

This is the same principal as above the only difference being on how many shares you own.

For example Brother and Sister are purchasing a property. Property is worth $1,000,000. The brother puts in $800,000 of his savings and sister puts in the remaining $200,000 into the property. As you can see the brother contributed 80% of the purchaseprice and the sister contributed 20% of the purchase price. Both wish to be tenants in common in unequal shares. Therefore, they will own the property as "brother as to 80/100 shares and Sister as to 20/100 shares".

As long as the shares add up to the value of 100th or 10th you can have as many people purchasing or as many shares as decided.

Given the rising prices of housing in all of Sydney many parents are choosing to either go guarantor on the children's property or even putting large sums of money towards their children's home. To protect their interest many parents are added onto the Contract and onto the deeds. An example where we can mix joint tenants and tenants in common is: husband and wife buy property, dad contributed a large some of money towards the purchase. Husband and wife own the property as joint tenants 50% and dad owns other half of the property, 50% as a tenant in common. This means that if the husband was to pass his share will automatically go to his wife. However, if the father passes away his 50% share would be distributed as per the terms of his will. If at any stage the husband and wife want to purchase back the fathers 50% then husband and wife would have to obtain a valuation from a registered property valuer and pay 50% stamp duty on the value of the property.

As you see from the examples whenbuying a property things can get quite complex. So ensure that you have discussed these matters with your partner prior to signing on the dotted line. If you would like any more information about your shares in a property please contact Coutts Solicitors & Conveyancers on 1300 268 887.

Can "friends with benefits" become friends with inheritance benefits?

Can an ex personal friend claim inheritance benefits from your estate if you die? In March 2014 the Supreme Court of New South Wales considered this question. In this case, a wealthy man died after a battle with cancer. He left his multi-million dollar estate to his second wife, Lisa,and their two children. His first wife, Adele, sought provision from the estate.

He had met Adele in the US in 1988 and they were married shortly afterwards. They divorced in 1995 and did not have a Family Court Property orders made at the time. The reason they divorced was that they could not agree on whether to permanently settle in Australia or the US. They had no children together. It seems that they both continued a close friendship after their divorce and Adele held hopes they would resume a romantic relationship. He made representations to her, her sister and her father that he would look after her. He married Lisa in 2009 and together they 2 children. At this time it seems his contact with Adele became infrequent.

In granting Adele provision, the judge considered relevant the fact that the estate was very large and in providing for her, Lisa and the children were still being taken care of. He also decided that the lack of fault or acrimony attached to the breakdown of the marriage, her ongoing friendship and the lack of a family law settlement were relevant factors in Adele’s favour. Adele had little financial means of her own. She was granted $200,000.00 from an overall estate of approximately $11,000,000,000.00

This case again highlights some of the factors a court will consider when a previous partner is seeking provision from an estate. It is also a timely reminder of the dangers of testators telling people that they will be looked after in the Will, but then not updating their Will.

It is also an important for anyone who has ended a relationship- whether it is a marriage or a de facto relationship- of the importance of having a formal property settlement. Even if the split is mutual and friendly, it is important to formalise the end of the relationship from a financial point of view. The Judge even commented that had there been a property settlement following the end of their relationship, the first wife would not have succeeded in making a claim against her ex-husband’s estate.

If you need to clarify your circumstances for either a separation or Will call Coutts Solicitors & Conveyancers on 1300 268 887.

Will you sleep tonight? Without a Will, your assets are at risk.

Thinking about the worst is not something that any of us like to do.  But unfortunately, life doesn't always turn out the way we had planned. Preparing a Will isn't just for those at retirement age. If you have any assets or money at all, you should have a bulletproof Will in place to make sure they are left with the right beneficiaries. In the absence of a Will, your home, savings and more importantly - the financial security of your family is at stake. We've seen it all too often and it’s heartbreaking.

The number of people contesting Wills today is much higher than it used to be, which provides another compelling reason to put your Will in place. Firstly, people are becoming wealthier, so there is more wealth to leave behind.  Secondly, the rising divorce rates are creating complex family structures that aren't as straightforward as they were in the past.

Preparing your Will

If you haven’t yet prepared a Will, consider the following questions:

  • How much is your estate worth and who will be your beneficiaries?
  • Do you wish to include any specific charities?
  • Who will execute your Will after you've gone?
  • Do you need to name legal guardians for children under 18?
  • Do you need to mitigate any inheritance tax liability?

Already have a Will?

If you already have a Will prepared and haven’t looked at it for a while, it might be a good idea to go through it again and make sure you've left no stone unturned. Perhaps your situation and circumstances have changed and you wish to make some adjustments. There’s no better time than today.

Ensuring there are no discrepancies in your Will is not a simple task.  We can work with you to ensure your Will covers all facets of your estate, to reduce the likelihood of any legal dispute. If you need some expert help on preparing or reviewing your Will, don’t hesitate to get in touch.