Q & A on 2GB discussing Wills & Estate Law 18/3/14

Tuesday, 18 March 2014

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CS – Chris Smith/BB – Brian Barlow/C1,2,3 etc– Callers

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CS       Good afternoon Brian.

BB       Hello Chris.

CS       It’s good to have you in here, you have been in her before, I knew that, but that was with Luke, that was before I got back on the afternoon programmes, so its great to have you, first time together, you’ve brought, look he’s got all the legal books in here.

BB       Oh look, not much time to refer to them, I don’t think Chris, but anyway, they’re a backup.

CS       That’s ok its always good to have a backup, 131873 and always a popular segment presented by Turner Freeman, especially when we talk about Wills & Estates, so I advise you to jump in early. Usually any time after say a quarter to two and so many people get left on the board. I want to get to caller as soon as we can, I’ve got a couple of questions and also some questions sent to us via the email during the week, Chris you have a question for Brian, go right ahead.

C1       Hi Brian.

BB       Hello Chris.

C1       How you going.

BB       Yeah good thanks.

C1       Thanks buddy, mate I bought my first property and the broker I used at the time advised me to say I was single and not married with two kids I had at the time, I’ve bought another investment property since then and my concerns are that if anything ever happens to me, what’s the situation then, should I make a Will? I’m obviously still married and got an extra child now, yeah its just he advised me to do that, to get the mortgage, I’m not going to say who he is or whatever, but its just very concerning, you know

BB       Yeah look very, most important if you, everybody should have a Will but especially more so if you own property, its even more important, you’ve got a wife and children you said, so yeah its very important and I would strongly suggest you make an appointment with your solicitor preferably Turner Freeman and we can certainly assist you but yep, there is absolutely no doubt that someone in your situation should have a Will.

CS       But in his situation when he said he had to sort of pretend that he was single and not married, that would only be to the bank to get a mortgage.

BB       Yeah, look I think, I didn’t want go into that Chris, I mean there could have been some issues about first home owners grant, there that I also didn’t want go to.

CS       Yeah right OK.

BB       Those sorts of issues are why its important, when you’re applying for things like grants that you make full disclosure.

CS       Yeah righto, OK, Rod go ahead.

C2       Hello, my question is my partner’s died and I just want to find out what do you have to do with the tax, just get a tax accountant to do just one tax return or does she have to do 2 or.

BB       No well it depends on the period of time Rod, whereby your partner is deceased. Essentially there is a tax return done up to the date of death and then there is another, what we would call an Estate tax return done, following the death, and that could also vary depending if it goes over into a tax year, there could be a further tax return that needed to be carried out, be essentially there would be a tax return up to the date of death and then an Estate tax return.

C2       Ok.

CS       OK, good on you Rod, thank you for that, now Michael has sent me this, a question for legal matters today. My elderly father has left me a share of his monetary assets in his Will. He has dementia, so is unable to now alter this Will. My brother and I have Power of Attorney over his affairs as they relate to financial, medical and other matters. I would like my inheritance to be received by my wife, on my father’s death if I were to become deceased before my father, is there any way this can occur given that my father is not fit to be altering his Will.

BB       Look Chris that’s a very, its is a fairly 3 pronged question.

CS       Yep.

BB       I mean, obviously we start on the premise that Dad doesn’t have testamentary capacity, can’t alter the Will. It’s important to know a Power of Attorney, which essentially covers financial affairs whilst someone is alive, of course comes to an end on death, and that’s when the Will takes over. So if, he is the beneficiary under the Will, there is a provision that the beneficiary has to survive the testator i.e. his father by 30 days, so normally most, most Wills would provide that if something happened to your child, then you would specifically provide that there share would go to their children and in fact the Succession Act provides for that even if you don’t but, it’s an unusual provision that an original testator would leave a son or daughter’s share to a spouse, and I mean that’s probably due to things like family breakdown and the like. It would be more common that there would be a provision in the Will that that child’s share would go to their children equally.

CS       Right and that is the usual succession that operates under the Act, does it.

BB       Yes, yes.

CS       Right, OK that’s interesting, thank Rod, thank you to Michael who sent us that email another one here from Deborah. I’m a bankrupt, it finishes in August. My two children have just inherited a $1 million unit, how do they protect it from their partners, if they happen to break up? Is there a way that unit could be placed into some sort of testamentary trust for themselves and their heirs but not go to their partners?

BB       Yes Chris, that’s always a common question asked of us lawyers, people trying to protect assets. You can create testamentary trusts whereby your child is generally the trustee of the trust and they have discretion and that’s why it’s called a family trust, they are discretionary trust as to who the beneficiaries can be. However I think the issue that this listener is raising is the fact of trying to protect it from a Family Law property settlement and under the Family Law Act that is increasingly difficult to hide assets through a family trust.

CS       Yeah and it would probably be an obvious succession that if they broke up, they would have to share that inherited unit if they were sharing it in terms of living.

BB       Oh certainly, certainly and you look at those sorts of contribution elements and the Family Law Act is essentially a contribution based act, so if they are living together and he goes of to work and she washes his clothes and cooks his meals, you know certainly those contributions are seen as every bit as important as other contributions. It’s also the length of the relationship that is very important in those circumstances.

CS       OK, 131873, Vicki in Campbelltown go ahead.

C3       Oh hi I’m just ringing and enquiring for my daughter, she is single and has trust transferred to a new superannuation fund, which will not allow her to nominate her parents as beneficiaries. Now she doesn’t have any dependants. She does have a Will that states that her entire Estate is to go to her parents in the event of her death. Now does that include super or does she need to have her Will specifically state that her superannuation is to go to her parents in the event of her death?

BB       Yes, yes thanks Vicki, that likewise often the assets in your superannuation fund don’t form part of your Estate, and a lot of people do what we call binding nominations. Now obviously your daughter’s super fund doesn’t permit that, so normally provided there was nobody else dependent on your daughter at the time of her death, those assets would more than likely pass into your daughter’s estate and it would be covered by the terms of her Will and if she has left you and your husband as beneficiaries, essentially the upshot of that is that you would inherit the superannuation.

C3       So she doesn’t need to have her Will redone, to specifically state that while ever her circumstances remain the same.

BB       Yeah, while ever her circumstances, but if there are people who are dependent on her, that can change the scenario, and it would be very important to have another look at it.

C3       Yeah well while ever there is not she doesn’t need to pay to have a new Will drawn up.

BB       Yes.

C3       Alright, thank you very much.

CS       Ok, good on you Vicki, Maree you have been waiting patiently, go ahead.

C4       Oh hi my question today is, my son is just going through a settlement, they’re not divorced at the moment, now I’m just wondering if anything happens to me, does she have claim to my estate?

BB       Well I take it Maree that they have already separated?

C4       They are separated, yes they have been separated since October.

BB       So in terms of a Family Law property settlement, that would be looked at as a post separation contribution on your son’s side of the ledger.

C4       Yes.

BB       Although it is a financial resource that would have to be disclosed in the documentation.

C4       Yes.

BB       It’s very difficult to say that his wife would have no claim on it, it would depend on the extent of their other assets. So if she was going to be a pauper and he had a large bequest from your Will, it may be that there might be some adjustment made. But essentially you would and again without knowing all of the facts, it would essentially be that post separation contribution and would largely fall to the benefit of your son I would imagine.

C4       And what about my super, I have him as, I’ve got a binding nomination and he is one the nominated people.

BB       Yes.

C4       Would she have any access to that as well?

BB       Well it would form in the same category because it would become his asset.

CS       But Maree while this is going on and this is a separation that has been going on for sometime, your not intending to leave us so soon are you?

C4       Ha ha, well who knows.

CS       You need to tell him to tell his lawyer to get a wriggle on.

C4       That’s right, well we’re doing that tomorrow, so.

CS       Good.

C4       I just didn’t know whether she would have any access, whether I needed to change my existing Will to make sure that, I don’t want her to get anything, you know.

BB       No, no Maree your son is obviously the specified beneficiary and that is the important thing.

C4       Yes.

CS       Just eat plenty of veggies and keep walking Maree.

C4       Sorry.

CS       Eat plenty of veggies and keep walking Maree.

C4       Ha ha, thanks very much.

CS       Thank you, there you go I guess you’ve got to, you know prepare for all circumstances and that is what she is trying to do, but you would have thought they could have sorted out the settlement soonish.

BB       It’s important of course, when you do separate, then the separating partners should update their Will, because it’s not until divorce that the gift to the spouse lapses so to speak, so it would be important as soon as they separate that each of them change their Wills to provide what they wish.

CS       Brian Barlow from Turner Freeman here to answer your calls, 131873. Now compensation can’t change the past, but it will make a difference to your future, so if you’re suffering because of someone else’s negligence, turn to Turner Freeman Lawyers, Turner Freeman Lawyers are heavy hitters, the type of law firm you need on your side to win, and they have been winning claims for a long time. When Turner Freeman acts for you they draw on over 500 years of combined experience, the financial and legal resources of a national firm and reputation as tough uncompromising litigators who won’t rest until you get the compensation you deserve. So give Turner Freeman Lawyers a call they’ve got offices in both in New South Wales and Queensland. Visit TurnerFreeman.com.au to fine the details of your nearest office. Turner Freeman Lawyers when you need to win your case.

CS       Brian Barlow from Turner Freeman who are our sponsors of the program, legal matters, and they are here to take your calls, most Tuesdays and we’re talking about Wills & Estates today. Karen go for your life, Brian is listening.

C5       Yeah hi, my father has dementia and my brother and I were left, written down as beneficiaries of his Estate when he does die, but my brother has died suddenly and I wanted to know if my brother’s children have any claim on the Estate when my father dies?

BB       Karen that would depend on the wording of your father’s Will.

C5       Right.

BB       There is a proviso under the Succession Act that a beneficiary has to survive the testator by 30 days, however the Will, that is unless there is a contrary intention appearing in the Will. Now not every Will does it, but a lot of Wills provide that if a child does pre-decease the testator or doesn’t survive for 30 days that, that child share would go to their children. So.

C5       Yeah I understand that but it’s not in this particular Will. The Will was written probably about 20 years ago.

BB       Oh, OK so essentially if it was written 20 years ago and it just says that I leave to my son and again do you know what the wording of its says?

C5       It just names my brother’s name and mine, so my son and daughter, that’s what it says.

BB       Is there a requirement that you have to survive your father.

C5       Yes, yes.

BB       OK, well that gift would, on that basis lapse.

C5       Ok, so.

BB       But of course Karen it is important to realise and depending whether or not those children were eligible children, is that they could perhaps bring a claim against their grandfather’s Estate but there would be certain conditions that would have to be fulfilled for that.

C5       Ok, I’m just wondering when the time comes if I need to put money aside just in case for them, or something like that?

BB       While yes, certainly you’d need advice on the circumstances and I’m very weary about giving out advice when I haven’t seen the wording of the Will, but you know on that basis you would look at it at the time.

C5       Ok then.

CS       Good on you Karen and thank you, Barbara, Brian is listening.

C6       Thank you, Brian. I’m raising 2 grandchildren, through a Family Court order, do I have to treat them in my Will the same as my biological children in regards to you know, leaving them things from my Estate?

BB       Well, I think you’ve always got to remember Barbara, that you’re entitled to leave who you want to as beneficiaries of your Will, however notwithstanding that, the Act does provide what’s called Family Provision and if those grandchildren, are dependent, as they obviously are dependent on you.

C6       Yep.

BB       And they are part of your household, then they would be eligible persons in which to bring a claim against your Estate.

C6       Right.

BB       So you know, you’ve got to make that decision whether you provide for them as beneficiaries.

C6       Well I have provided for them, but only a percentage of their mother’s, what she would get, so she is not getting her full share, their getting part of her share, can I do that?

BB       Well you certainly, you can do what you wish, however if it’s challenged it’s up to the Court to determine whether adequate provision has been made and the other significant issue is the needs of those children at the time.

C6       Ok, thank you.

CS       Good on you Barbara, thank you for that 131873. Mark, Hi.

C7       G’day Brian how are you.

BB       Yeah good thanks Mark.

C7       My question is, I’ve got an estranged relationship with my mother and father and they have indicated to my children that they are going to be the beneficiaries of their Will. Where would I stand in that regards?

BB       Well, I presume when they say that there going to make your children take your share I’m presuming.

C7       Correct, yeah.

BB       That doesn’t take away your eligibility to bring a claim for further provision under the Succession Act. You are still entitled to do that notwithstanding that it’s your children that are also beneficiaries. So your certainly an eligible person being a child. If you’ve been left nothing, then inadequate provision has been made for you, but certainly your needs and the financial circumstances of you and the other beneficiaries would be also an issue that the Court would look at.

C7       Absolutely, yeah it was just a question that has been bothering me for a while. I don’t really understand, if that was the case that they could leave everything to the 2 kids, so you’ve answered that question well, thank you.

CS       Thank you Mark, 131873. Just going back to an earlier email we got about Powers of Attorney and the opportunity to change a Will. If someone has given their Power of Attorney to their daughters for instance, but through that process, despite the fact that the daughters have looked after their financial, medical and business affairs, the person claims that they want to change their, something needs to change on their Will. Do both Powers of Attorney, both daughters have to be signatures; do they have to approve this? Or can the person go ahead and change their Will despite the fact that they are no longer in charge of their own affairs?

BB       No, I’d take it Chris that what your saying is the person hasn’t got testamentary capacity, so they can’t change their Will, and you cannot delegate your testamentary power, so you make a Will you can’t give that power to your attorneys under a Power of Attorney.

CS       Right, OK, unless the individual can prove that he or she has the ability to understand what it means to change a Will.

BB       Yes, you can have your children looking after your affairs under a Power of Attorney, but that doesn’t necessarily mean you don’t have testamentary capacity to change a Will, and its up to the Will maker, your solicitor to determine your testamentary capacity.

CS       OK, I appreciate your time this afternoon, we went through a stack of callers and hopefully answered a lot of questions not just for those who called but others who were listening.  Brian thank you for that.

BB       Thanks Chris.

CS       Brian Barlow from Turner Freeman.