John Mann providing Q & A on the 2GB Chris Smith Afternoon Show – discussing Wills and Estates – 21 June 2016
Tuesday, 21 June 2016
CS – Chris Smith /JM – John Mann /C1,2,3, etc – Callers
CS Well it’s time for Wills and Estates and John Mann is in the studio – happy to take your calls as well – 131 873. Don’t forget Turner Freeman Lawyers provide a range of specialised legal services including compensation and negligence law, asbestos litigation, family and employment law, Wills and Estates which we are focusing today, commercial litigation and superannuation and disability claims. At Turner Freeman, New South Wales offices are in Sydney, Parramatta, Campbelltown, Penrith, Newcastle and Wollongong. That’s Sydney, Parramatta, Campbelltown, Penrith, Newcastle, and Wollongong. They’re just the New South Wales offices and thanks to Turner Freeman we’ve got a $100 Westfield voucher to give away to the caller of the afternoon between now and 2. So 131 873. We were going to start our conversation before we take calls today just to discuss Probate and Letters of Administration. Firstly, from our Penrith office and he is an accredited specialist in Wills and Estate and also property law. John Mann. John thank you very much for coming in.
JM G’day Chris. It’s good to be here.
CS It’s good to have you here. Probate. What does “Probate” mean?
JM Probate is an application to the Court for strict proof of a deceased person’s Will. It’s an order that the Will has been made according to law and is the authorisation by the Court to go ahead and authorise the executor to proceed with the administration and distribution of the Estate. It’s like a nexus between the executor and the deceased person.
CS And what therefore does “Letters of Administration” mean?
JM That applies when there is no Will.
CS Ah, ha.
JM The Letters of Administration is granted to an administrator where there is no Will.
CS Right. How is it determined who can administer the Estate of someone who has died without making a Will?
JM The general rule is, as long as they are adults, the next of kin are the persons who make the application. So a person’s died leaving a widow. She would make the Application for Administration. If they died with no widow, then the children make the application. But they’ll all have to – they can leave it to the others if they wish but generally speaking they are all entitled to do so….
CS But what’s one of the greatest dangers that you come across from someone that kind of doesn’t want to confront the fact that they are not going to be here one day so therefore they don’t update their Will or they don’t even start with a Will, what’s the greatest danger in that?
JM Well unfortunately if they’ve got something in mind that they want to happen, it might not. So that – in the ordinary course, if we are married with children, then we pass away without a Will, our spouse will take our Estate or in the absence of a spouse, then children. But, for other people’s situation is different – they might have different relations, they might want to favour other people, they might want to make gifts to charities, all sorts of things, but once you die without a Will, then there is a strict regime of how the Estate is distributed.
CS Okay. Let’s go to some callers on the open line – 131 873. This is free legal advice – by the way a $100 Westfield voucher to those who can get through and we’ll choose one of those callers today to receive that voucher. Bruce, you’ve got a question for John – go right ahead.
Caller 1 – Bruce
Bruce Hi John. Bruce here. My question relates to our family home built in 1957 by my mother and father – where we all lived – my mother subsequently dies – probably goes to the father and his intention was to leave it to the brother himself and we lived in that home ourselves life and self – for quite some time and for work reasons moved on. Capital gains tax of course didn’t come in until 1985. Are we subject to capital gains tax by law considering that the property was rented for a while later because the father remarried – that’s the first question – the second question is that the property was transferred unbeknown to anyone else but the lady herself, the stepmother into her name and her name alone and we had to transfer that title more recently when she died some 20 years after the father. Are we considered to have come into possession of that property for capital gains tax at the change of title or back of the date of the Will? That’s my question.
JM It’s really a technical sort of question. To deal with the first issue, if the property was simply in the name of your father, he would have acquired a half share with your mother when it was bought in the 50s.
Bruce That’s right.
JM When your mum passed away, he would have – would take the whole of it but he would have acquired a half at whatever time your mum passed away.
JM Now as long as that remained his principal place of residence, then if he were to sell the place being alive then he would be entitled to the exemption of the principal place of residence. Now when you pass away and you have a tax asset like that, the executors have a 2 year window in which to sell the property free of capital gains tax. If you inherit a property that does not trigger off, in most cases, does not trigger off capital gains tax liability because it’s viewed as an acquisition rather than an disposal.
Bruce Right. Now as I say the father died and he rented it for a little while because he went to live in the stepmother’s house but it was kept in his name and his name alone and so – I’m not sure about the capital gains tax aspect of that and the second one was that our name never appeared on the title when it was transferred out of his Estate and the stepmother put the title in her name and her name alone and I only found out this in later years. To sell the house after she died just recently at the age of 98, we had to transfer the title back to my brother and myself. Now we consider to have acquired the house with the change of title or when the Will was written?
JM Did you sell the property as the executors of your stepmother?
Bruce Ah, no. The property – we were not involved in her Estate at all and the property as we understood it was in our names because of the father’s intent on the Will but we never knew that the title was transferred into her name and her name alone and because the Will was that we sell the property after her death and divide the result and I’m not sure whether we are considered to divide the property when we transfer the title or when the Will as written?
JM It’s a very technical question. The question now then depends on the status of your stepmother.
CS And it does sound like he needs some proper legal advice.
JM Yes, I think get some accounting advice too…
CS And accounting advice yeah.
JM That’s a very complicated question.
CS Yeah – can’t give you anything more than that Bruce because it is complicated and probably best handled by a lawyer and I would suggest someone from Turner Freeman who sponsor this particular program. And you can find a Turner Freeman office in Queensland, at Cairns, Ipswich, Logan, Maroochydore, North Lakes, Southport and Toowoomba. Back with John Mann. 7 to 2. Phillip, you’ve got a question for John – go right ahead Phil.
Caller 2 – Phillip
Phillip Hello John. Could you tell me what obligations are on the executor of the Will to find the next of kin?
JM In which there’s an executor of a Will but you can’t identify the beneficiaries?
JM That can happen. Obviously he’s got to make more reasonable efforts to locate them. Generally if that turns up a blank, ultimately the funds finish up with the Unclaimed Moneys Fund. But you can’t take away the entitlement of the person but it can also be complicated because they may have died, all sorts of things could happen.
CS But reasonable would presumed that you would look it in the White Pages, you’d look in Electoral Rolls for a start and maybe even put a small ad in the newspaper?
JM Precisely. Yes.
CS Yeah. Okay. Hey Phil I like that question. So much so you’ve got the $100 Westfield voucher Phillip.
CS Good on you. That’s a good start to the day. Thank you Phil. Put Phillip through to Gabriella. Last question David – go ahead
Caller 3 – David
David Yeah hi. My friend’s a beneficiary to a Will from a relative passing and she seems to have what she has received is different to what she was told she was going to receive. Do you know how you go about it actually doing the Will or how does that work?
JM Well executors are ultimately accountable to the beneficiaries so that if she’s not satisfied with what the executor is saying is right, she can require the executive to account and ultimately if the executor won’t do that they can be forced through the Court to file accounts in the administration of the Estate.
David Does that mean she the executor if she requests a copy of the Will, the executor’s obligated to do that?
JM If she’s a beneficiary, the executor can’t refuse.
CS Yeah – can’t refuse. That’s the……
JM Whoever is in possession of the Will – can’t refuse.
CS That’s the obvious question. John, thank you very much for your time this afternoon. Thank you for answering those questions. Good on you. Accredited specialist in Wills and Estates and property law with Turner Freeman and based at the Penrith office in Sydney. We will have another Turner Freeman Legal Matters Segment. Next Tuesday, same time around about 1:35.