A Promise is a Promise

If a person makes a promise (“the promisor”) to another that s/he will obtain an interest in the promisor’s land and in reliance upon that promise, the other person then acts to his/her detriment, the law will intervene to prevent the promisor from going back on his/her word when it would be unconscionable for the promisor to do so. A recent NSW Supreme Court case has considered this legal principle known as proprietary estoppel where disgruntled neighbours sued the estate of his deceased neighbour after it was discovered that she reneged on her promise to leave them certain land by her Will.

David and his partner were neighbours of the deceased describing their property, No 70, at the time they purchased it as “the worst house in the best street”. The deceased was the owner of two adjoining properties (No 66 and No 68). The deceased resided in an upstairs unit at No 68 which had views of Sydney Harbour.

After David and his partner moved into No 70 in 2001, the deceased voiced her concerns about their plans to develop their property. It was contended that the deceased promised to leave them her houses (No 66 and No 68) in return for them looking after her for the rest of her life and agreeing not to undertake their desired building works to the extent that such works would impede her Harbour views.

David and his partner performed their side of the agreement but when the deceased died in 2015, she did not leave her properties to them in her Will as she had promised. David and his partner sued the executor of the deceased’s estate seeking to enforce their rights by estoppel against her estate.

The court found David and his partner did provide services to the deceased and altered their lifestyle to accommodate the deceased’s needs, and provided companionship and support as the deceased aged over a number of years in reliance upon her promise to them. “Estoppel by encouragement vindicates a plaintiff’s expectations when a defendant seeks unconscionably to resile from an expectation that he or she has created”. The court determined that detrimental reliance “sufficient to render it unconscionable for the deceased to resile from the testamentary promises has been established” and the elements of proprietary estoppel were made out. The court ordered the executor of the deceased’s estate to transfer the 2 properties to David and his partner.

A promise made by one person to another may be enforceable against the promisor particularly where significant steps have been undertaken in reliance upon the promise and you should seek professional legal advice. At Everingham Solomons we have the expertise and experience to advise you on your legal rights because Helping You is Our Business.

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Making your Will while under lockdown

COVID-19 has made many people think about their mortality. Making a Will has become a priority for a lot of people in an effort to protect loved ones and as a means by which we can create some certainty as to our last wishes in an otherwise increasingly uncertain world.

Usually, a valid formal Will must be signed by the Willmaker in the presence of two witnesses. This requirement can present an obstacle when you take in account the current social distancing and isolation directives issued by the Government. These directives really do not make the task of signing a Will in the presence of two witnesses who are not family members an easy one.

If you die without leaving a Will, the intestacy laws of each State and Territory will apply to determine how your assets will get distributed on your death according to a prescribed legal formula. Importantly this formula may not reflect your true wishes.

Taking into account the above dilemma, the NSW State Government has introduced temporary new laws that will allow the witnessing of Wills, Enduring Powers of Attorney and Appointment of Enduring Guardianship documents as well as other important legal documents by videoconference.

“These changes will make it easier for people to stay home and reduce physical interactions, while still completing important transactions”.

Everingham Solomons is continuing to assist our clients during COVID-19 and this includes conducting meetings via videoconference.

If you are concerned about your estate planning, it is important to know that we can assist you to put in place a Will that reflects your wishes and will bring peace of mind to you and reduce the burden on your family and loved ones when you die. At Everingham Solomons we have the expertise and experience to assist you with all of your estate planning needs, because Helping You is Our Business.

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Special Disability Trusts

Planning ahead for individuals can be challenging but that task can seem harder for family members of individuals affected by severe disability and will often involve more than making a standard Will and appointing a Power of Attorney or Enduring Guardian.

In 2006, the Government introduced Special Disability Trusts into social security legislation with the aim to encourage the private funding of accommodation and care needs for people with disabilities. A Special Disability Trust allows family members to leave assets in trust for an individual with a ‘severe disability’ which can be used to fund that person’s ongoing care, medical expenses, accommodation, and some discretionary expenditure for that person into the future without adversely affecting their entitlement to a disability support pension.

A Special Disability Trust can be established by a Will and allows assets to be left to a beneficiary without having adverse effects on their Centrelink entitlements. A Special Disability Trust may also be set up during a person’s lifetime (for instance by a parent for their child with a severe disability) and the restrictions and concessions applicable will be the same as those that apply to a Trust created by a Will.

A Special Disability Trust must conform strictly to very prescriptive rules and as such it will not suit everyone with a family member who has a disability.

The starting point must always be to determine whether the person with a disability qualifies as a beneficiary of a Special Disability Trust which must fit the definition of ‘severe disability’ under the social security legislation.

Funds in a Special Disability Trust can only be used to pay for accommodation and care expenses related to the disability (including medical and health insurance expenses) and reasonable discretionary expenditure (up to a limit of $12,250 a year, as at July 2019).

A person with a ‘severe disability’ can have $681,750 (as at July 2019, indexed annually) plus a residence held in trust before the assets test applies to reduce his or her social security entitlements. The income from the assets of a Special Disability Trust will not be included as income of the beneficiary. Family members contributing assets of up to $500,000 into such a trust may receive an exemption from the usual Centrelink gifting rules.

It is strongly recommended that individuals obtain expert legal and financial advice to determine whether a Special Disability Trust suits their circumstances. For advice a Special Disability Trust, please contact the experienced team at Everingham Solomons because Helping You is Our Business.

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Putting out your hand, without more, is not enough for family provision

The deceased died in 2016 aged 76 years survived by his widow and two adult sons and 6 grandchildren. The deceased made a Will on the day he died leaving his widow the right to reside in their matrimonial home for life. Upon termination of such right, the deceased sought to provide for 3 of his 6 grandchildren, to make a gift of $10,000 to each of his sons, and for the remainder of his estate to pass to his daughter in law who was also named Executor of his Will. The net value of his estate was in the vicinity of $3.8 million.

The deceased left a statement of wishes acknowledging that the gifts of money to his 2 sons represented “a small component” of his estate. The deceased recounted the substantial financial assistance he had provided to both of his sons during his lifetime especially during their “formative business years”.
A claim was brought by one son, a self-described “professional punter” for a greater share of his father’s estate. A pivotal aspect of every application for family provision is to establish need as this is an area of law that has “developed to address those circumstances where an eligible applicant has not been provided with ‘adequate’ and ‘proper’ maintenance from the estate of a deceased”. Unfortunately the applicant in this case did himself no favours in putting forward contradictory accounts of his financial position without adequate explanation. Far from presenting a convincing case of need, the Court determined that the applicant had made no effort to place before the Court an accurate statement of his financial position. Additionally the Court heard evidence of their long lasting estrangement which the Court noted provides an explanation (perhaps not the only explanation) for the deceased’s decision to make only modest provision for his son in his Will.
The son’s failure to accurately account to the Court for his true financial position, meant the Court was in “no position to assess whether the provision made for the applicant in the Will in question was otherwise than adequate”. “It is the applicant’s duty to place before the Court, candidly and fulsomely, the applicant’s financial position”. The applicant’s failure to do so in this case resulted in his application being dismissed.
At Everingham Solomons we have the expertise to assist you with all matters relating to family provision claims, because Helping You is Our Business.

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Giving The Gift Of Life – Lesley McDonnell

I am often asked by clients who want to donate their organs, if they should include this wish in their Will. Due to the fact that a Will is not read until after a person’s death, there are better options for people to record their wishes to donate their organs.

Firstly, the Australian Organ Donor Register is Australia’s only national register that enables people to record their decision about becoming an organ donor after their death. Registration is easy, voluntary and allows a person to choose which organs and tissues they are willing to donate. There are a number of ways to register including, but not limited to, the following:

Register through your existing online myGov account;

Register using an Online form through https://donatelife.gov.au website;

Download a registration form from the Department of Human Services website at www.humanservices.gov.au; or

Visit a local Department of Human Services Centre and pick up a Donor Register brochure and registration form.

If you register, doctors around Australia can see you are a donor 24 hours a day, 7 days a week. “Transplants need to be fast, so this is vital”. “Around 1,400 Australians are currently waitlisted for a life-saving organ transplant. In 2018, 554 deceased and 238 living organ donors and their families gave 1,782 Australians a new chance at life. The majority of Australians (69%) are willing to become an organ and tissue donor but only 1 in 3 Australians have joined the Australian Organ Donor Register”.

Secondly, people can record their wish for organ donation in their Appointment of Enduring Guardian. This is not a substitute for registering as an organ donor. An Appointment of Enduring Guardian is a legal document that gives a person the power to say who they want to have authority to make medical and lifestyle decisions for them if through accident, illness or misadventure a person loses the ability to make decisions for themselves.

Finally, it is important that you discuss your wishes with your family as they will have the final say. When you die, family are more likely to follow your wishes if they already know about them. If over time your views or goals change, it is important that you let your family, friends and enduring guardian(s) know.

If you need assistance in any estate planning matter, please contact Everingham Solomons, because Helping You is Our Business.

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The importance of a Will and its whereabouts – Lesley McDonnell

LAMA Will is a legal document which sets out who will receive your assets when you die. Taking the time to make a valid Will is an important first step but it is not the end of the story. A Will should be reviewed regularly and particularly when significant life events occur such as marriage, divorce, birth of a child, or if one or more of your beneficiaries die. Equally so, you should always keep your Will in a safe place and let the Executor(s) of your Will know where it can be located. This is because if a Will cannot be found at your death, it can lead to considerable uncertainty, distress and expense for your family as the following case illustrates.

The deceased committed suicide in 2013.The deceased had two adult children and a wife who survived him. The deceased had separated from his wife in 1991 but they never divorced. Following his death, no original Will could be located.  In 2014, the deceased’s daughter applied for Letters of Administration on the basis that the deceased had not left a Will. Letters of Administration were granted to her in 2014. In 2015, the deceased’s son located an unexecuted copy of a 1991 Will of the deceased and made application to the Court for proof of the 1991 Will.

To be successful in this case, the deceased’s son had to prove to the Court that the lost Will had not been revoked. This is because under the law “If a will known to have existed and last known to have been in the possession of the deceased cannot be found after death, it is presumed that the deceased destroyed it with the intention of revoking it”. To rebut this presumption, “the evidence must show it is more probable that the Will was lost or stolen or, more generally, could not be produced for some reason other than that it was destroyed by the deceased with the intent to revoke it”. The strength of the presumption of revocation varies according to the facts of each case.

The Court found that in 1991 the deceased executed a Will but the original Will could not be found. On the evidence before the Court it was held that, by mid-2013, the deceased had destroyed the 1991 Will. As a consequence the Court found the deceased died intestate meaning his estate would be distributed according to the rules of intestacy.

The above case reinforces the importance of keeping your Will in a safe place and letting the Executor(s) of your Will know where it can be located. At Everingham Solomons we can help you both with making a Will and safely retaining your Will for the peace of mind of you and your loved ones because Helping You is Our Business.

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Inadequate provision for deceased’s children under the rules of intestacy – Lesley McDonnell

LAMThe deceased died in 2016 without leaving a Will. The deceased was survived by his estranged second wife, his ex-wife, and his two children, Thomas and William aged 19 and 16 respectively. The value of the deceased’s distributable estate was just over $430,000. At the time of his death, the deceased and his second wife had been separated for several years with the Court noting “There can be little doubt…the marriage had irretrievably broken down”. As the deceased died intestate (without leaving a Will) the deceased’s estate was distributed “not according to the wishes of the deceased as expressed in a Will, but according to a regime established by statute”. Pursuant to the rules of intestacy, the deceased’s estate passed to his second wife.

In an effort to seek to redress the perceived inadequacies of operation of the rules of intestacy in this case, a family provision claim was made by Thomas and the deceased’s father on behalf of William, for provision to be made for “the proper maintenance, education or advancement in life” of Thomas and William from the deceased’s estate. To determine this issue the Court was required to make “an assessment of the financial position of each of Thomas and William, respectively, the size and nature of the deceased’s estate, the relationship between each and the deceased, as well as the relationship of the deceased’s second wife and the deceased, as a person who has a legitimate claim upon his bounty”.

The Court acknowledged the deceased’s estate passed pursuant to the rules of intestacy to the deceased’s second wife. However the Court noted “bearing in mind the shortness of the marriage before she left the deceased (about 14 months); the fact that there is no evidence of any contribution made by her towards the acquisition, conservation and improvement of the estate of the deceased, or to his welfare; that it is not suggested that she contributed to the welfare of the family of the deceased; that nothing at all is known about her financial resources (including earning capacity) and financial needs or about any physical, intellectual or mental disability from which she might suffer; that she appears to have wished to have a complete break from the deceased, and has maintained that approach by not, apparently, wishing to participate in the proceedings; and despite the numerous efforts to involve her, I am satisfied that the Court should regard her as having virtually no competing claim on the bounty of the deceased…”.

In contrast, “judged by quantum, and looked at through the prism of Thomas’ and William’s financial and material circumstances, respectively, adequate provision for the proper maintenance or advancement in life of each could be seen as not having been made”. Accordingly the Court ordered the estate to pass to Thomas and William.

Much of the difficulty, delay and expense experienced by the parties in this case could have been avoided if the deceased had made a Will leaving his estate to his children. At Everingham Solomons, we have the expertise and experience to assist you to prepare a Will that suits your needs because Helping You is Our Business.

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Purchase of new residential premises and GST on settlement – Lesley McDonnell

LAMFrom 1 July 2018 the purchaser of ‘new residential premises’ will be required to withhold the GST amount from the purchase price on account of the GST liability of the vendor and pay that amount directly to the Australian Taxation Office (ATO) on or before settlement.  This represents a change to the current regime where a vendor who makes a taxable supply of new residential premises is required to remit the GST to the ATO after lodging their BAS. Under the new regime, the responsibility for payment of the GST to the ATO shifts to the purchaser who will pay the GST liability of the vendor out of the purchase price of the property.

In general terms, new residential premises are defined in the GST Act to include residential premises that have not previously been sold as residential premises and

have been built, or contain a building that has been built, to replace demolished premises on the same land that are not created through a substantial renovation and are not commercial residential premises.  “The exclusion of substantial renovations ensures that a purchaser does not have to determine whether renovations are ‘substantial renovations’ of the property, which may be difficult to assess at the time of purchase. Similarly, commercial residential premises are excluded to make it clear that a withholding obligation does not apply in relation to residential premises that are both ‘new residential premises’, and ‘commercial residential premises’”.

To help purchasers comply with their obligation to withhold, a vendor that makes a supply of new residential premises by way of sale is required to notify the purchaser in writing of certain matters before making the supply. This notification can be provided through the 2018 edition of the Contract for Sale of Land or in a separate document.

The new regime applies to sales of ‘new residential premises’ that are settled on or after 1 July 2018, unless the contract is entered into before 1 July 2018 and settlement occurs before 1 July 2020.

At Everingham Solomons we have the experience and expertise to assist you with all of your sale and purchase of property needs, because Helping You is Our Business.

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Forfeiture of inheritance from deceased brother’s estate – Lesley McDonnell

In 2008 the deceased died at the hands of one of her two sons. In 2012, son Brent was tried and convicted before the Supreme Court of Western Australia for the murder of his mother. In 2014 this family was again touched by sadness when Brent’s brother and only other child of the deceased, Adrian passed away.  Adrian died without leaving a Will which meant his estate would be distributed according to the rules of intestacy. In 2016 a grant of letters of administration of Adrian’s estate was made to the Public Trustee (WA).

The Public Trustee (WA) made an application for direction from the Court as to how to distribute the part of Adrian’s estate which was made up of inheritance from his deceased mother’s estate. Pursuant to the rules of intestacy, two persons were entitled to benefit from Adrian’s estate when he died namely Brent and Adrian’s half-brother, Gary. Gary was not a child of Adrian’s deceased mother.

In the deceased mother’s estate, the Court made orders that by reason of Brent having murdered his mother, he forfeited his entitlement to take in intestacy from her estate. But Brent’s entitlement to a share of Adrian’s Estate does not arise directly from Brent’s crime committed in 2008 by the murder of his mother. It arises from Adrian’s death in 2014 and the fact that Adrian died intestate and the effect of the rules of intestacy. There was no suggestion that Brent was responsible for Adrian’s death. However Adrian would not have had an entitlement to the whole of his mother’s estate but for her death at Brent’s hand.

Perhaps mercifully the Court noted “there appears to be no Australian authority directly on point”. “Intuitively it would seem to be a logical extension of the rule of forfeiture to hold that a person in the position of Brent, a convicted murderer, could not benefit directly or indirectly as a consequence of his crime”.

Ultimately the Court decided that the application of the common law forfeiture rule meant that Brent should not receive any part of Adrian’s estate which derived from his late mother’s estate.

In the above cases, both mother and son died without leaving a Will. A carefully drafted Will could have avoided some of the uncertainty associated with the rules of intestacy. At Everingham Solomons, we have the expertise and experience to assist you with all your estate planning matters because Helping You is Our Business.

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Unsent Text Message upheld as a Will

LAMIncreasingly people live their lives through their mobile phones. In 2016 tragically a man took his own life but he left an unsent text message on his mobile phone recording his last wishes. A friend of the deceased accessed the phone after he died to look through the contact list to determine who should be informed of the deceased’s death. The friend discovered the unsent text message which stated that the deceased’s brother and nephew should “keep all that I have house and superannuation, put my ashes in the back garden”.

 A family feud erupted over the status of the unsent text message left by the deceased. The deceased’s brother and nephew asked a Court to rule that the message be treated as the deceased’s final Will. An opposing application was made by the deceased’s widow for a grant of letters of administration declaring that the deceased died leaving no Will. If the widow’s application was successful then the deceased’s estate would be divided between the deceased’s widow and son.

The Court had to determine whether the message was intended by the deceased to operate as his Will to enable the Court to uphold the message as the deceased’s Will. The Court noted “The informal nature of the text does not exclude it from being sufficient to represent the deceased’s testamentary intentions”. Referring to an earlier 2013 case, the Court noted that a DVD left by a deceased person marked with “my will” “although very informal” was found to be a valid Will.

The Court took into account a range of factors in ruling the text message in this case was a valid Will, including that it was “created on or about the time that the deceased was contemplating death, such that he even indicated where he wanted his ashes to be placed”. That the deceased’s mobile phone was with him where he died. That the deceased addressed how he wished to dispose of his property including details as to where cash was to be found, that there was money in the bank and the card pin number, as well as the deceased’s initials with his date of birth and ending the document with the words “my will”.

Whilst ultimately the application to have the text message upheld as a Will was successful, it was not without associated difficulty and delay and uncertainty coupled with considerable legal costs much of which could have been avoided if the deceased had consulted his Lawyer to make a Will. At Everingham Solomons, we have the expertise and experience to assist you with all your Estate planning needs because Helping You is Our Business.

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