John Mann discusses what happens to our estate and our possessions when we pass way

Tuesday,- 26 March 2019 

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CS – Chris Smith /JM –John Mann /C1,2,3, etc – Callers 

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CS       What happens to our estate and our possessions when we pass away? Something we would rather not think about but we have to. Writing a will is a difficult and often divisive process and it is one many of us try to put off but we can’t. What happens to us if we die and if we don’t have a will in place? Does the government get to seize our estate? If you have a question about wills an estates if you’ve got these questions to ponder give us a call right now on 131873 some free legal advice courtesy of Turner Freeman Lawyers. I have a $100 Westfield gift voucher to give away as well. We are going to get to John Mann who is an accredited specialist in wills and estates and also in property law at Turner Freeman Lawyers. John is based in the Penrith office.  John Mann, good to have you with us.

JM      G’day Chris.

CS       What happens if we die without a will in place? 

JM      There is a popular misconception that it goes to the state government but that is not the case but what does happen is that the law then regulates who is entitled to inherit your property.  That generally runs in the line of spouse, children and grandchildren but it extends right down to cousins.

CS       Irrespective of who got on with who before that person died?

JM      Well that is one of the problems that sometimes occurs, that people have separated and separated for a long time but haven’t divorced and of course if you don’t have a will then your spouse to whom you are actually still married, will inherit your estate because that is the way the law provides.

CS       So are you allowed to do what you would normally do when you challenge a will and challenge that decision?

JM      In a situation like that what happens to the estate of course is governed by the rules of what we call the rules of intestacy. Yes if they are a new spouse they may well have a right to challenge that process but none the less it is something that you want to try and avoid.

CS       And so when the money is divided in these circumstances is there a set formula that is followed?

JM      There can be. There are provisions in the more recent legislation for multiple spouses and in some situations where a person has more than one when they pass away the court can make arrangements as to who the estate is to be divided up between them.

CS       Brian has a question for you John. Go ahead Brian.

C1       Hi John, how are you going?

JM      G’day

C1       We’ve got a family farm and parents have both recently died and there is a brother and myself and a sister and the will has been split 80% to my brother and 10% each to the other two of us. He has been generally running the farm a fair bit more but also lives on the farm and draws an income and living out of the farm. We sort of believe that the most recent will has gone missing conveniently and we have sort of been given advice to relinquish our executorship because he has been doing some dodgy dealings and also to be able to contest the will.  Is that what you would recommend?

CS       You need to be very cautious about relinquishing an executorship and the principal reason for that is because the person that made the will has appointed you as their executor so it’s their wish that you undertake that job. No one can put your arm behind your back and say that you have to be the executor so you can always renounce that entitlement but then you have absolutely no say or control in what goes on in the estate. It’s not uncommon for a person who has been appointed as executor to also be in a position to make a family provision claim. That can happen.

C1       Right.

JM      So the other thing is of course….

CS       Just explain that the family provision claim would be for his family and whether they could be in need of some part of the estate.

JM      That’s right Chris. Family provision is a situation where a person has made a will but has failed to make any provision or any adequate provision for a person the law says that the person making the will should have had in mind when they make it. Generally speaking that is children and closer relations. There are some various categories of this but that is the eligibility to bring a claim to challenge against a will where you feel that your needs haven’t been adequately meet. 

CS       You need to think carefully about relinquishing your power over that estate. 

C1       So John, with that is it likely that any dealings that he has done we also kind of get pulled into that as being joint executors or is that something that we can say we didn’t know about? 

JM      Well again you have to be very careful. The officer of the executor is a singular thing, in other words there is an executor in this case, if it consists of three people then that is the executor and the acts of one executor bind the others so that if he has done something, for example he has arranged a funeral without consulting you then everybody is bound by that arrangement.

C1       Right.

JM      But if you don’t take probate then you have no active part or participation in the matter at all, that may or may not matter because particularly if a claim is to be brought later then the executor, if you have renounced, still has to place before the court all the financial dealings of the estate.

CS       Brian stay there, you may want a little bit more help with this. I may be able to give you John’s number and you can talk to him off air. Can we put Brian back to Tully if we can. Thank you.  John go ahead. 

C2       Good afternoon, how are we? 

JM      G’day 

C2       Mate my question is just quickly in regards to my father who is getting his affairs in order.  There are five grandchildren and four charities that he wishes to donate money to on his demise.  Now what has happened is, there is a solicitor who is looking after it that has the will and the deeds to the house and all that. He wants to obviously at his demise, there is nine cheques to be written to different folks, he is charging per cheque that is going to be written for the five grandchildren and four charities, is this normal behaviour?

JM      Well again it depends on the terms of his engagement. Often the administration of the estate which is the division of the estate amongst the beneficiaries, the work that is done in doing that could be charged for on that basis but I don’t think it would be a terribly large sort of a charge in that sort of circumstance.

C2       Well I will tell you that the charge is, well I don’t know what the charge is my father didn’t tell me so what he has done is actually while he is alive to donate that money to the charities so they can see some benefit from it and also donate the money or give the grandchildren the money now so that he can see some benefit to see what they are doing with it rather than putting up whatever the exorbitant fee was times nine for each cheque that this solicitor was writing.

JM      Well that’s a matter for him, it’s his money he can give it away if he wants to.

C2       Oh absolutely. I agree with you but I was just curious if there were 27 cheques to be written I think it is a little bit unfair that the solicitor gets 27 fees for doing the same thing.

CS       Yes John, what do you think about those legal fees?

JM      Well I don’t know what they are. The executor himself has a right to challenge the legal fees he is charged like any client of a solicitor.  

CS       John I have to leave it there and I’ve got to take a break. Back with John Mann from Turner Freeman and your calls after this.

CS       Let’s get to Andrew online. Andrew, John is listening, go ahead.

C3       G’day John, G’day Chris how are you?

C3       My question is a difficult one I think, second marriage. When the estate was under the first marriage I kept my super so I am out I am free. With my second marriage what I want to ensure is that I leave some benefit for my children. If I go first I am giving everything to my current wife but they are not her children she doesn’t have any children. I want to make sure that if I go first and then she goes – there is a caveat there that my children will get something when she goes.  Can that be done?

JM      That’s quite a complex issue but there are several means that this can be achieved. The first of course is through your superannuation and that is to make a binding nomination of some or all of your superannuation in favour of your children. Now first of all you have to know whether your superannuation fund will accept binding nominations and then make one and then keep an eye on whether or not it is one that has to be renewed every three years. But what that does mean is if the nomination is applicable and it works, the superannuation benefit is paid directly to the children outside your will. Now you have to balance that up against what provisions the law says that you should make that are adequate for your wife and that would also mean that I would suggest that some consideration of the superannuation because that is generally speaking the biggest cash benefit to come into our estate. The other thing is that you can make wills on what we call a mutual basis or a contract basis so that you sign an agreement to say that if I make my will this way and you make your will that way and we agree that we will not alter or change them without the consent of the other. So then if one of them should die the other is not in a position where they can change that agreement. Now again with that the law doesn’t say that you can’t make another will, you can make another or as many as you like but in the end but when you die and if the will is contrary to what you had agreed with your partner way back, the law will impose a trust on the estate to make sure that the agreement is complied with.

CS       Andrew I have a $100 voucher for you. That is a really good question, a difficult one but a really good question. So the $100 is coming to you. Can I suggest to any one that is left still on the board. I have a stack of people that still want to talk with you John but they can contact Turner Freeman on 134363 or we will get you back in the not too distant future John. Thank you for your time this afternoon.

JM      Ok Chris. Not problem.