Tag Archive: estates

  1. Super Death Benefit

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    Super Death Benefit

    In 1991, the Federal Government introduced a guarantee that all Australians would have a fund to use for their retirement and introduced Superannuation. Since then, it is a major asset for most Australians and is often a large component of your total assets you hold when you pass away.

    It is a common misconception that when you pass away, your Superannuation becomes part of your estate. In most situations, your super fund pays any super held at the time of your death to a nominated beneficiary, rather than the money being paid to your estate. This is called a “super death benefit”. Most super funds, including self-managed super funds, allow you to make a nomination to a beneficiary of your choice, by making a non-binding or binding nomination.

    If you did not make a nomination, or have a non-binding nomination in place, the trustee of the fund may:

    • Use their discretion to decide which dependent or dependents to pay the death benefit to; or
    • To make a payment to your legal personal representative (executor of their estate) for distribution according to the instructions in your will.

    A death benefit can be paid as either a lump sum or income stream. If a death benefit is paid to someone who is not a dependent, it must be paid as a lump sum.

    So the question is – who is a dependent? A dependent under superannuation law is a person who at the time of death was:

    • A spouse or de facto spouse;
    • A child of the deceased (any age); or
    • A person in an interdependency relationship. This relationship exists if you have a close personal relationship with that person, you live together, and/or you each provide the other with domestic support and personal care.

    If you wish for your superannuation to go to a non-dependent, then it may be best to nominate your legal personal representative as the beneficiary of your superannuation and distribute your super through your will.

    You should always read your Superfund’s distribution guidelines before making any death benefit nomination.

    Bader Pendergast-Lee is Solicitor at Zande Law Solicitors, Suite 9, Norwinn Centre, 15 Discovery Drive, North Lakes, practicing in the areas of Wills and Estates. If you need legal advice in relation to distributing your superannuation through your estate, please make an enquiry with our office and our wills and estates team will assist you with your estate planning and your wishes regarding your superannuation.

    The information in this article is merely a guide and is not a full explanation of the law.  This firm cannot take responsibility for any action readers take based on this information.  When making decisions that could affect your legal rights, please contact us for professional advice.

  2. Voluntary Assisted Dying

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    Could the Voluntary Assisted Dying Act affect my inheritance?

    The Voluntary Assisted Dying Act 2021 (Qld) (‘VAD Act’) provides strict criteria for accessing voluntary assisted dying (‘VAD’), and has raised complex legal, ethical, and moral questions regarding end-of-life decisions. The new laws make a particular distinction that VAD is not assisted suicide where the required procedures and requirements have been followed, and the person has made the decision freely and voluntarily. But why is this distinction so important?

    The rule of forfeiture provides that a person who unlawfully kills another cannot benefit from their victim’s death. Whilst this rule has certainly been applied in cases of murder, manslaughter and more recently in assisted suicide, the implications of the rule in cases of VAD are yet to be seen in Queensland.

    Although suicide is not a crime in Australia, aiding or inducing another person to end their life is a criminal offence. Similarly, it is not a crime to access VAD, but it is a criminal offence to dishonestly assist or coerce a person into accessing VAD or self-administering a VAD substance.

    This means that those assisting a person seeking VAD in good faith will be protected from liability arising from that person’s death, and becomes especially relevant where a person is assisting a spouse or parent with health decisions and end-of-life care relating to VAD. In the unlikely event that their assistance is provided with malice, then in theory, that child or spouse could certainly be prohibited from inheriting under their parent or spouse’s estate.

    Interestingly, the forfeiture rule does not require a criminal conviction for murder or manslaughter, and the Court in their ultimate discretion may judge that a person was responsible for another’s death on the balance of probabilities. This means that if the Court could be satisfied that it is more likely than not (say, a 51% chance or greater) that they assisted or coerced that person in bad faith, the rule could apply to deaths under the VAD Act in the absence of a ‘guilty’ verdict.

    Nonetheless, it is clear that the intention and independence of a person seeking VAD is paramount, and so if you have concerns about a friend or family member, we encourage you to seek legal advice.

    Madeline Crnkovic, Law Student and Paralegal at Zande Law Solicitors, Suite 9, Norwinn Centre, 15 Discovery Drive, North Lakes, is the author of this article, training in the area of Wills and Estates.

    The information in this article is merely a guide and is not a full explanation of the law.  This firm cannot take responsibility for any action readers take based on this information.  When making decisions that could affect your legal rights, please contact us for professional advice.

  3. How does Covid-19 impact on legal services and the law

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    How does Covid-19 impact on legal services and the law

    Although undoubtedly, the present restrictions on human contact and movement are having an unpresented impact upon Australia’s economic prosperity and these same factors are undoubtedly impacting also on many people from a mental health perspective. For the most part, none of these restrictions should effect the way the law or the delivery of legal services have operated and/or apply.

     

    Family Law Cases

    The Chief Justice of the Family Court has issued a public announcement that unless a particular family is actually suffering a Covid-19 infection, the Court expects that pre-existing arrangements for the share of care and decisions making for the children should continue on unaffected. The existing family law principles already are flexible enough to adapt to a world where the value of businesses, stock market investments, superannuation and/or Real Estate are undergoing dramatic fluctuations as a consequence of broad base external factors as was previously seen with events such as the property boom in the late 90’s early 2000’s and the consequent global financial crisis of 2008.  Otherwise, the Family Court itself is still very much open for business and is presently running all of its cases via telephone and video link. All court documents are now being filed via the Court’s online portal, a system which has been up and running now for several years. There are some disruptions and delays, but by enlarge the court is still functioning as normal.

     

    Buying and Selling Real Estate

    Although worries over job security and the potential for a dramatic drop in real estate prices are undoubtedly impacting on confidence and the consequent willingness of parties to enter into and/or proceed to complete real estate deals, the terms of the standard REIQ real estate contracts and the overall structure of the conveyancing process are both well capable of adapting to  Covid-19 issues. Under the standard REIQ contract, there are already specific clauses that will suspend the operation of a contract should events such as a Covid lockdown occur. Under those same terms, the seller is also given the right to terminate the arrangement if government restrictions are to continue for an extended period. House inspections can still legally occur and the only events which are currently not possible are the group gatherings associated with auctions and open houses. In terms of the conveyancing process, the innovation of e conveyancing which has now been in operation for some time, now permits every task of the conveyancing exercise to be conducted online with the one exception of witnessing of signatures but this task can still be easily completed in face to face meetings provided social distancing is used.

     

    Preparation of Wills and Enduring Powers of Attorney and the administration of Deceased Estates

    Although much of these tasks have historically been conducted through face to face meetings, all of the required tasks to prepare and sign a will, an enduring power of attorney or attend to the administration of a deceased estate, can be conducted via use of telephone or video conferencing and in extreme cases this too can extend the execution of wills and enduring power of attorneys documents although most law firms preference is to continue to have these documents executed in face to face meeting which are all still perfectly doable provided everybody respects social distancing and hand sanitising.

     

    General Legal Business and Consultations

    Again with the ability to conduct business via telephone or video conferencing and also via the use of email and online document sharing platforms such as drop box, the business of providing and receiving general legal services is well capable of continuing to be conducted amidst a Covid lockdown environment.

    So, the message generally from Zande Law and indeed the legal industry at large is that we are still open for business and do not foresee that any developments associated with Covid-19 will impact on our ability to provide services for you.

  4. Family Loans and Gifts – Using a Will to Equalise benefits.

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    Family Loans and Gifts – Using the Will to Equalise the Benefits

    Many parents of adult children often discover that although the children may have left the nest, the umbilical cord or supply lines sometimes remain firmly attached.

    Some families adopt great discipline in this area, ensuring that any advance made to assist one child is immediately equalised with an identical advance to the others whether they need it or not.  For the most part though, limited spare cash and the inevitable timing differences in the fortunes and misfortunes of the children mean that benefits are provided out to the children unequally in answer to individual need as it arises.  When it comes to making a Will therefore, there are a number of issues that surround this topic and all should be considered:

    • Was the money a loan or a gift? – The critical time for answer to this question is the time at which the money was advanced. If the money was given over with no agreed understanding that it was to be repaid then (by a concept called the presumption of advancement) the money is usually a gift and the recipient is entitled to retain it without consequence. For it to be a loan there must be an agreement that the money is to be repaid. Either way, it’s highly recommended that the agreement be recorded in writing at the time the money is handed over. If not then a retrospective agreement can be signed up at a later stage but with the money already in hand, the recipient of course may not feel motivated to sign.
    • What were the terms of the loan? – If there was an expectation that the loan  needed to be repaid by a certain time or that there was to be interest charged upon the outstanding amount of the debt from time to time then this needs to be expressly agreed between the two parties. If interest was to be paid, was the interest supposed to be compounding or simple and at what rate was the interest to be calculated? If there is no mutual agreement between the parties on these matters then the loan will usually be taken to be repayable on demand and interest free.
    • Guarding against allegations of forgiveness or set-off – a legally binding loan can still be extinguished if the parties subsequently agree to forgive it or for instance the borrower has made some other payment or provided some other benefit to the lender (for example paying the lender’s phone bill) which has been accepted in “set-off” against the debt. If there are benefits passing backwards and forwards between the two parties then it is essential that there be clear records to establish whether obligations for a payment have indeed been waved or set-off by something done in exchange.
    • What if the debt has been partially repaid? – As with everything else, clear records to show that the money that might have been paid from debtor to lender has been accepted in partial reduction of the debt is critical to determination of this issue.|
    • How can the loan be treated under the Will? – In the Will, it is important that the Will maker clearly sets out what the expectation is to be. The options are:
      • to, forgive the loan;
      • direct the executors to count the loan as an asset and gather it in
      • offset the entitlement against the debtors full estate entitlements; and/or eve sue the debtor to recoup the balance of the debt if the debt exceeds that beneficiary’s full entitlements under the estate once the loan has been counted in as a divisible asset. 
        • Are time delays between time of advance and the time of death relevant? – Yes. Under general principles of Contract Law, any “loan” advanced which is unspecified as to date for repayment is likely to be classified as a debt “repayable on demand”. By a combination of the 1956 High Court case of Young v Queensland Trustees and the Queensland Limitations of Actions Act, the creditor to any “On Demand” loan is barred from bringing any claim to the courts for enforcement of repayment of the loan any time after 6 years from when the money was advanced. This law however does not extinguish the debt and so conceivably it can still be counted as an asset under the will  and offset against the debtor/beneficiary entitlements however to avoid any problems it is highly recommended that the debtor should be made to sign a fresh acknowledgement to confirm that the debt is still repayable every 6 years.
        • Can executors be given the discretion to forgive the debt outright? – Yes. The Will can be drafted to give the executors this power but it is generally not recommended.
        • How are issues resolved between debtor and the executors if there is a dispute about how much is actually owed? – Just like any other litigation between people in disagreement, the matter has to go to the courts and is litigated as a normal civil dispute. There are obviously however difficulties with this since one party to the original loan agreement being the deceased is now no longer able to give evidence and consequently any deficiencies with the case can’t be rectified by that person giving evidence as to what actually might have occurred or was in their state of mind.

        Michael Zande is the Principal of Zande Law Solicitors, with 25 years experience in practice.  Michael and his team have had extensive experience in drafting of Wills and Administration of Deceased Estates.  Please feel free to review our firm and staff profiles at www.zandelaw.com.au

        The information in this article is merely a guide and is not a full explanation of the law.  This firm cannot take responsibility for any action readers take based on this information.  When making decisions that could affect your legal rights, please contact us for professional advice.

         

  5. Wills and the rules of construction – Gifts of Property

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    As is often the case with poorly drafted wills, the Court is left to make an order as to the intention of the testator in circumstances where the testator is no longer able to give evidence. As a result, the Court has over the years developed various rules that are used in the construction of wills to assist testators and those drafting wills to ensure that the testator’s intention is reflected in the terms of the will. These rules of construction are complex and are generally subject to a contrary intention appearing in the will.

    A fundamental rule in the construction of wills is that, in relation to the property of the deceased, the will speaks from date of the testator’s death and not from the actual date of the will.

    For example, a testator may gift “my car to my daughter Rebecca”. At the time of executing the will the testator owned a Toyota Corolla. However, a few years later the testator sold the Corolla and purchased a BMW and later passed away. In this example, Rebecca will receive the BMW, even though the deceased did not own the BMW at the time of executing the will.

    Conversely, a testator may gift “my Toyota Corolla to my daughter Rebecca”. If the Corolla is later sold by the testator and the testator did not own a Toyota Corolla when he or she passed away, the gift to Rebecca will fail. This is the case even if the testator sells the Corolla and leaves the sale proceeds in a bank account. The sale proceeds in the bank will fall into the residue of the estate and will not pass to Rebecca.

    It is possible to avoid this rule of construction, by ensuring the will is carefully worded to clearly illustrate the testator’s intention. However, if the wording used in the will is ambiguous, it may be necessary for the executors to apply to the Supreme Court for guidance in the interpretation of the will. This is an expensive and lengthy exercise, which can be avoided by executing a carefully drafted will.

    Another situation that should be considered when drafting a will is the devise of property subject to a mortgage or charge. For example, if at the date of the deceased’s death their house is subject to a mortgage, the beneficiary that is to take the house will also be liable for the mortgage attached. This rule also applies to personal property, such that the beneficiary who is to take an item of property which is subject to a legal or equitable charge, will also be liable for the charge so attached. Once again, this rule is subject to a contrary intention appearing in the will.

    A review of the will should be conducted every few years, or when a person’s circumstances change, to ensure that gifts intended to pass to a particular beneficiary will in fact pass to that beneficiary. Further, if it is intended that a gift will pass free of the mortgage or charge, this will need to be specially set out in the will.

    The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.