Thursday, 16 May 2013
CS Well, Wills and Estates. Whenever I raise that topic, we get so many calls it’s not funny. If you’ve got a question to ask us today on Will issues or estate matters, I suggest you get in pretty quickly because so many people miss out because it is a rather popular topic. 131873 use the open line 131873. And you’ll be speaking with Paul Sant today. Paul has been in the studio before talking about other legal matters at this time and he’s from Turner Freeman, our sponsors for this segment as well. Paul, thank you very much for coming in again.
PS Thank you Chris.
CS Since 2008, there’s been a series of legislative changes to the laws regarding Wills and Estates. I guess the best place to start before we get to calls would be to run through a few of them. Firstly, in terms of writing a Will, what are the changes?
PS As far as the formal parts of the Will, those changes came into effect in 2008 and what’s happened, they’ve introduced this Succession Act in three different stages. The first part of course, dealing in relation to formalities. They’ve taken away a lot of the strict formalities that we used to have to abide by. We don’t have to have a strict what they call an Attestation Clause. It’s a formal clause that normally fits at the end of the Will. Prior to 2008, if the spouse of a beneficiary witnessed the Will, that gift could fail, that doesn’t apply anymore. They’ve amended the interpretation, for example, if you leave it to a child and that child happens to pre-decease you, then that gift is deemed not to have failed but it passes on to that child’s children. It continues on. So they’ve corrected a few issues that arose time and time again in relation to the formalities and the problem of interpreting Wills.
CS What about claiming from an Estate? Have we seen changes over the past couple of years in terms of that?
PS We have Chris. Those changes were mainly introduced in March 2009 in relation to Family Provision Act claims. Biggest change, you’ve got 12 months from the date of death to make a claim. It used to be 18 months, it went down to 12 months.
CS Why 18 to 12?
PS Part of this is to make it basically similar law through all the States. We had a crazy system.
CS Right, which makes sense.
PS Depending on which State resulted…you know, some States you could, some States you couldn’t.
CS It’s almost a case where the law itself should be under Federal jurisdiction because people don’t die differently in different States…but anyway…
PS But our Constitution doesn’t provide for that.
CS Yeah, ok. So what happens when you pass away without a Will?
PS They’re the intestacy provisions and they came in March 2010. The big change there is that they’ve basically allowed for multi-families. You know, let’s say you’ve divorced and you’ve got children from a previous spouse and you have remarried and got children from this relationship.
PS In the old days, let’s say there was a spouse and children and you didn’t have a Will then a large part would go to the spouse and the children would inherit something. Now they’ve added priority to the spouse. Under the new changes, you had one current spouse, doesn’t matter if you had children, it goes to the spouse full stop.
CS Alright, let’s get to the practicality of some of this law and try and answer some questions for people. Christine, you’ve got a question for Paul, go right ahead.
C1 Thank you Chris. Hello Paul
PS Hi Christine.
C1 Paul, I’ve got two adult children and they now have families of their own but when we made our Wills, my husband and myself, neither of them were married and neither of them had children and, of course, it’s left equally between our two children. If one of them was to die, would the person that die, would their children get their half or do we need to make new Wills.
PS Under the changes to the Act, it would go to their children. I always suggest to people that you review your Wills. In my mind, there are three times you make a Will. Probably before you’re married, once you’re married and then once your kids are 18 and have their own families then you’ll have a look at it again. And you specifically provide in that scenario but the law has taken care of that now but only as far as children are concerned. So if you leave a gift to a third party and that person happens to die before the testator, well then that gift fails but where children are concerned, if they die before, it will pass on to their kids.
CS Why haven’t you updated your Will Christine, just a matter of curiosity.
C1 Because I come from a family that left really unfair Wills so I made it and just left it equally between my children saying I would never ever alter my Wills.
CS Right, but now the circumstances have changed, haven’t they?
C1 Yes, but if it automatically goes to their children, there’s not a problem.
CS It’s consistent with your wishes. Ok, thank you very much for your call. Bev, hi.
C2 Hi Chris. Hi Paul
C2 I just want to ask a question, this is a low conflict here. Say you leave…you’ve got three children. You leave your Estate to two and you don’t include the third. If they are entitled to come in and contest, aren’t they?
PS Yes, they…well, the third child could make an application for proper provision. He’s a child so he’s got an automatic right to make that claim.
C2 Yeah, but say I left him just $2…this is a question that came up the other night with friends.
PS How many times do I hear that.
C2 Yes and she said…well, he can’t contest it if you leave him $1 and I said, no…
C2 I thought that he could contest and get a third share of the…you know…
PS Bev, I can tell you now that if you left him $1 or $2, depending on his needs that is, he could contest.
CS They can contest. Peter, go ahead.
C3 G’day Chris/Paul.
C3 My situation is my father died many years ago and I wasn’t aware of any Will. Is there any recourse that I can find out about if there was a Will and, if so, would I be entitled to anything.
PS Well, first question I suppose, did Dad have anything? Was there an estate? If there was an estate and probate was made, you can undertake a probate search through the Supreme Court Registry.
C3 Right, ok.
PS But I think your caught with time.
C3 Right, ok.
PS I think there are limitations there but I just don’t have that information in front of me at the moment. But if there was no…see, a large…often, sorry, often what happens, people own property in two names, joint tenancy. When one dies, it automatically passes to that survivor. There’s no reason for an application for probate to be made. The survivor gets it and off they…you know, usually the spouse, whatever it happens to be, and they proceed that way. If he was married, the chances are that the property might have been in his and the wife’s name and everything got left to the wife and the wife got it by way of survivorship.
C3 Is there any legal obligation to notify anyone that was in the Will.
PS If there is a Will and it applies, both the Executor and even, I think the obligation is on the people who are the legal people who are assisting in the administration to ensure that the beneficiaries get their entitlements. There was a famous case many years ago where a testator died, a firm was aware that he died, didn’t do anything about it and then a beneficiary made a claim. There is an obligation upon the Executor to perform and to do what the Will requires him to do. Full stop. Now, as part of these new changes, one of the new provisions that have been introduced is to allow people who are named in the Will or former spouses or have an entitlement to request and are entitled to be given a copy of the Will and any previous Will or any other documents. That wasn’t there before. That’s part of these new provisions which came into effect in 2008 so you’re entitled to certainly get copies, yes.
CS Ok, let’s leave that one. And let’s move on to some other calls. We’ll do that after a quick break. 131873 the telephone number for Paul Sant, Turner Freeman in money matters, they’re our sponsors of our legal segment. 14 to 2.
10 to 2 is the time. Legal matters this afternoon and Wills and Estates with Paul Sant. Paul, you can take Doug’s call. Hi Doug.
C4 G’day guys. Again, good programme. The father died approximately about 7 years ago. Now in the Will it says…”It is my request that the house not be sold until 10 years after the date of my death.” There’s five people…I don’t know what you call them.
C4 Beneficiaries. First of all, is that binding and secondly, because four of us want to sell it. There’s another one that wants to live in the house but it’s a large house, it’s costing a lot of money.
PS The decision to sell would rest with the named Executor of the Will and a request is different to a direction. A request or a wish is not seen to be binding.
CS How’s that Doug?
C4 On saying that, how do you go about trying to move it forward then if…
PS If some…and I’m assuming you’re not the Executor?
C4 I’m not sure whether anyone’s the Executor. I’ll have to check it out.
PS No, if there was a Will, the second paragraph is you normally would appoint an Executor. Someone to step into the shoes of the deceased and carry out the wishes of the deceased.
C4 Oh, ok. I never thought of that, ok.
PS And that person is the one who makes the decisions. Now, there is an avenue available for a beneficiary if an Estate…see the obligation on the Executor is that he’s got to try and wrap up the Estate reasonably quickly. As reasonably as can be required, subject to the terms of the Will. But if the Will says I don’t want you to…well, I direct you not to sell the house for a period of 10 year or he creates a Trust that the property has to stay in its current state for a period of 10 years, well the Executor is bound by the terms of that Will but in this particular case, it was a request and if someone feels that, hold on, this Estate it should be wrapped up, it’s not happening, then applications can be made to the Court to get an Estate administered or get the wishes put in place.
C4 Ok, as usual it’s great advice. I don’t know how you…geez you must have a wealth of information in your head.
CS Thank you Doug.
PS I’ve got a few years on me mate.
CS Experience helps. Thank you Doug. 131873 is the telephone number. Leigh, hi.
C4 Oh hi. I have a quick question. I’m the sole beneficiary of my sister’s Will and she has no children and also she divorced properly with the husband and I think the husband has gone his way to remarried. So, would the ex-husband can still claim anything?
PS The ex-husband falls within the definition of “eligible people”. The section of the Act that says, these are the people who can make a claim, but practice and experience tells us that, particularly where there has been a property settlement, former spouses have huge difficulty in making a successful claim.
C4 Ok because when they divorced, everything settled properly and there’s no any settlement dispute or anything. Then the husband went separate way and he remarried. So…
CS Very unlikely is what Paul’s saying to you Leigh I think. Thank you very much for your call. 131873. Helen? Hi.
C5 Oh hello Chris. Thanks for taking my call. Chris, I have a son and it’s more or less a “what if?” question. He hasn’t made a Will. He has a wife and has been separated for well over a year. He hasn’t had contact with her. As a matter of fact, he doesn’t even know where she is. He has siblings, all with children. Who would be entitled to make a claim if something did occur?
PS If he has a wife and he had no Will, the first person entitled is the spouse.
C5 Ok. Even though they’re separated?
PS Even though they’re separated.
C5 Ok, alright. No, that’s answered my question.
PS So, and that’s part of the advice I give all family law clients, for example, after the first interview. Think about making a new Will.
CS Good on you. Thank you Helen. Hopefully you’ve had your question answered. Samal, go ahead.
C6 It’s Mehel I think.
CS Ah it’s Mehel. Yeah, go ahead.
C6 I might just start on a question on overseas family. Say, for example, we are three here with a little kid all together and if something goes wrong to all of three, does it Will apply to overseas beneficiaries if it is being mentioned into the Will?
PS Sorry Mehel.
CS You need to explain that a little better than what you did. Just say that slowly…there’s three of you…
C6 Ok, like me, my wife and a little baby. We are three here and if something goes wrong into the accident. Say, for example, we all three die.
C6 What happens to the Will if all our relatives are back home, in overseas?
PS If you’ve made a Will and you’ve appointed beneficiaries from overseas, they still get their entitlement.
C6 Ok, but say, for example, if there is no Will in that situation?
PS It doesn’t matter. If there’s no Will, it follows the order under the Act. So, firstly, it goes to your spouse. If there’s no spouse, it goes to your children. No children, it goes to parents, it goes brothers and sisters. Now if they’re overseas, they’re overseas, they still get it. They’re not disentitled because they don’t happen to be in Australia.
CS Let’s leave it there. I’ve got one question I want to ask you on behalf of June who’s phoned through but I won’t get June up but June wants to know, who is the best person to be the Executor of your Will?
PS Very good question. Someone you trust implicitly is the best answer. Look, there’s a bit of debate about it. My view is, I take the view that…someone who is involved in the Estate should be the Executor. So, in other words, a beneficiary. Now, if you’re leaving everything to your spouse, the simple answer is surely your spouse. He or she is going to get it, let them organise all the stuff that’s required. I’ve just seen instances where you appoint a third party and they’re not really keen in getting the administration moving on.
CS Right, ok, that’s interesting. I’ve run out of time. We’ve got to do this subject again because you’ve got a thousand callers that would love to put a question to you. Paul, thank you very much for coming in.
PS Thanks Chris.
CS Courtesy of our sponsor, Turner Freeman, Wills and Estates this afternoon. We’ve got to do this again soon.