An enduring Power of Attorney is a legal document that permits a person (‘the Principal’) to appoint a trusted friend or family member, or more than one (‘the attorney’) to step into the Principal’s shoes and manage their legal and financial affairs if for some reason the Principal’s decision making ability is lost. This type of Power of Attorney is aptly named an enduring Power of Attorney because the attorney’s power to make decisions for the Principal endures or continues if the Principal loses their mental capacity to manage their own affairs.
Any person who acts as an attorney pursuant to an enduring Power of Attorney document has a number of duties. Those duties are now spelt out in writing within the prescribed form of enduring Power of Attorney document.
Those duties include:-
Acting in the best interests of their Principal;
Not conferring benefits on themselves or on anyone else unless they are expressly authorised to do so;
Keeping adequate accounts and records of any dealings with the Principal’s assets, as the attorney may be held accountable for how money or other assets of the Principal are dealt with; and
Ensuring they always act honestly in all matters concerning the Principal’s legal and financial affairs.
If a person acts as an attorney pursuant to an enduring Power of Attorney document it is incumbent upon the attorney to discharge their duties to the Principal faithfully or they can be held accountable for their actions as the following case demonstrates.
In the case of Moylan v Rickard, the children sold their mother’s home pursuant to an enduring Power of Attorney, invested part of the proceeds to cover nursing home fees for their mother and paid the balance to themselves as gifts. The children argued that the gifts were in the Principal’s interest because they preserved the Principals’ pension and associated medical entitlements. The argument was not successful. The Court found the distributions made by the attorneys to themselves “were made in disregard of the interests of their mother [the Principal] and accordingly were not an honest exercise of the power conferred on them” by the enduring Power of Attorney instrument. The Court ordered the attorneys repay the gifts.
Making an enduring Power of Attorney is an important strategy which can help prepare you and your family for a sudden change in your circumstances. At Everingham Solomons, we have the expertise to advise you in relation to all of your estate planning needs including enduring Powers of Attorney, because Helping You is Our Business.
Click here for more information on Lesley McDonnell
In NSW there are certain formal requirements required by law in order to make a valid Will. Whilst “compliance with formal requirements for the making of a Will…may involve unwanted expense and inconvenience for a prospective Will-maker” during their lifetime, a failure to observe these formalities in life can lead to large unintended expenses after death when the intended beneficiaries, and potential claimants on an estate are forced to ask a Court to determine the deceased’s wishes.
Where a person leaves a document that does not comply with the formal requirements for the making of a Will, the matter normally has to be determined by a Court. The Court in turn places a premium on “substance over form in ascertaining the testamentary intentions of a deceased person, and in seeing that his or her beneficiaries get what is due to them”.
In 2012 an 85 year old Will maker died leaving a formal Will and a short video Will. “She expressed a strong desire to speak to her children in making her intentions known to them after her death. She could have done that in a video not intended to have legal consequences” but instead she made a video Will seeking to make additional gifts of money to her children over and above any provision she had made for them in her formal Will of two days earlier.
Whilst this case was a novel one in that a video Will was approved by the Court it was not without its associated difficulties not the least of which being additional delay and expense incurred by the estate in seeking to have the Court determine the deceased’s wishes. The Court was at pains to stress that for the person making the Will and his or her beneficiaries their interests “are best served by compliance with the formalities prescribed by law for the making of a valid Will. They are not intended to be onerous or to do otherwise than to facilitate the orderly administration” of estates according to law.
At Everingham Solomons we have the expertise and experience to assist you in making a Will that is in conformity with current law and deals with your particular circumstances because Helping You is Our Business.
Click here for more information on Lesley McDonnell
The requirement that before a property can be sold or leased, the owner or landlord must have an up-to-date swimming pool certificate of compliance, has been postponed more than once. New laws have now been introduced which allow sellers to pass on the obligation for swimming pool barrier compliance to buyers. For affected properties, the new laws will apply to any contract for sale signed on or after 29 April 2016.
The main changes that operate from 29 April 2016 include the following:
Contracts for sale of land with pools must attach one of the following:
a valid certificate of compliance;
an occupation certificate (for newly constructed swimming pools instead of a certificate of compliance); or
a certificate of non-compliance (if a pool barrier does not comply) EXCEPT FOR:
Strata and Community Schemes that comprise more than 2 lots, or an off the plan contract.
Failure to attach 1., 2. or 3. to the contract is an offence and may give a buyer the right to rescind the contract. If the contract is rescinded by a buyer, the seller must refund the deposit in full to the buyer.
Sellers are now able to transfer the obligation of obtaining a ‘certificate of compliance’ to the buyer by an appropriately drafted contract that attaches a ‘certificate of non-compliance’ to the contract.
The buyer of a property with a non-compliant swimming pool has 90 days from the date of settlement to address any issues of pool barrier non-compliance and obtain a certificate of compliance.
For sellers you need to make sure you are aware of your obligations when selling residential property. A real estate agent must not offer your residential property for sale unless a complete contract is prepared attaching all the prescribed documents and is available for inspection by prospective purchasers at the real estate agent’s registered office. Failure to do so is an offence and can result in the imposition of a penalty. For buyers you should make sure you get a copy of the notice that outlines the issues and rectification works needed before signing any contract that attaches a certificate of non-compliance so you can cost the work that needs to be done before you commit yourself to purchase.
At Everingham Solomons, we have the expertise to assist you with all of your legal matters including buying and selling property because Helping You is Our Business.
Click here for more information on Lesley McDonnell
Increasingly a significant proportion of an individual’s personal wealth can be found in their superannuation. This can be particularly evident when a person dies because the amount invested in their superannuation and receivable by way of death benefit may well exceed the amount of funds in the estate. A recent Queensland case serves as a timely warning for executors and administrators of estates seeking to deal with superannuation.
In 2013 James died without leaving a Will but he was survived by his parents Elizabeth and John. The net assets of James’ estate amounted to $80,000 but the superannuation death benefits exceeded $450,000. There was no binding nomination left by James so the trustees of the superannuation funds were obliged to pay the benefits to the legal personal representative or to James’ dependant or dependants.
Elizabeth made application to the Court to be the administrator of James’ estate. In the application Elizabeth deposed to a high level of conflict between herself and John and said as a result she did not believe that a joint grant to them of Letters of Administration was workable. Elizabeth deposed that she understood that, if she were appointed administrator of her son’s estate, she was required to collect her son’s assets and pay his liabilities as soon as possible and distribute his residuary estate equally between herself and John. Elizabeth further deposed “I propose faithfully to do this”.
Against this background Elizabeth applied for and received $453,748.69 in superannuation benefits personally. John contested this payment which resulted in the matter going before the Court for resolution. In essence Elizabeth argued that she should be entitled to retain the benefit of all of the superannuation paid to her while John argued that Elizabeth should be required to account to the estate for those monies.
The Court determined there was a clear conflict of duty and interest contrary to Elizabeth’s fiduciary duties as administrator of James’ estate. “When the applicant made application to each of the superannuation funds for the moneys to be paid to her personally rather than to the estate, she was preferring her own interests to her duty as legal personal representative…She was in a situation of conflict which she resolved in favour of her own interests… The failure of the applicant to apply for payment to herself as legal personal representative was in breach of her fiduciary duty to act in the best interests of the estate, for which she may be held liable by the court”.
Accordingly Elizabeth was ordered to pay the superannuation monies back to the estate.
At Everingham Solomons we have the expertise and experience to assist you in all aspects of estate administration becauseHelping You is Our Business..
Click here for more information on Lesley McDonnell
The ability to choose who you leave your property to in your Will has been tempered by legislation that permits eligible persons (as defined by legislation) to apply to the Court for a greater share of a deceased person’s estate where “adequate” provision has not been made for their “proper” maintenance, education and advancement in life”.
A recent NSW decision upheld the wishes of a Willmaker and dismissed the application of two children seeking a greater share of their mother’s estate.
The Willmaker died in 2014 leaving a Will made a little over one month before she died. The Willmaker was survived by her two adult children. Under the Will, the Willmaker left:
her daughter half of her personal effects and $250,000;
her son half of her personal effects and $190,000;
a friend and carer, her household contents (not including personal effects) and the right to use her car for one year from the date of her death; and
the rest of her estate was left to the proprietor of a complementary healing and training association.
The Willmaker died leaving an estate worth $1.1 million. Her children contested the Will.
In the year preceding the Willmaker’s death when she was diagnosed with a terminal illness she had assets in the order of $2.2 to $2.3 million but she had gifted $800,000 to the proprietor of a complementary healing and training association and $60,000 to her son before her death.
The Court found in evidence that the Willmaker had “carefully considered how she should dispose of her estate. She weighed up the competing considerations for her bounty” and she had in any event made provision for her children in her Will albeit her children wanted more. The evidence revealed that the Willmaker had discussed her testamentary wishes with both of her children before she died and asked each of them to respect her wishes and not challenge her Will.
The question for the Court was whether the provision made for the children in the Will was adequate? Both children would doubtless benefit from greater provision than that which has been made for them in the Will but “To remodel the Will because the judge thought that some additional provision would be fairer, would pay no more than lip service, or not even that, to respecting a capable testator’s judgment where it appears that a reasonable judgment has been made. …”.
If the Court had granted the order sought by the children the effect would have been after payment of costs for the estate to go to the children to the exclusion of the other beneficiaries named in the Will thereby leaving the Willmaker’s wishes unfulfilled.
The Court concluded that the children failed to demonstrate that adequate provision had not been made for them by the Will and the application was dismissed.
At Everingham Solomons, we have the expertise and experience to assist you with all your Estate planning needs including making or updating your Will because Helping You is Our Business.
Click here for more information on Lesley McDonnell
Where a capable Testator makes a Will that complies with formal requirements there is a presumption that the Testator knows and approves of the contents of the Will, but that presumption does not apply where the making of the Will is clouded by suspicious circumstances. For example where a Will has been prepared by a beneficiary this will raise suspicion as to whether the Testator knew and approved of its contents. Where suspicious circumstances exist the onus is on the person propounding the Will to prove not only its due execution but that that the Testator who signed the Will also knew and approved of its contents.
In 2013 a 93 year old Testator signed a Will that was prepared for him by his neighbour. The neighbour was appointed the executor of the Will and the net estate was left to the executor neighbour’s wife. The Testator died in November 2013 leaving an estate worth just over $2 million. The Testator was unmarried, had no children and lived alone.
The Will signed by the Testator met with formal requirements and there was no issue regarding capacity. There were however suspicious circumstances surrounding the signing of the Will and consequently the Court would not be satisfied that the document propounded as the Testator’s last Will did express the true will of the Testator, unless the suspicion was dispelled by the executor.
Evidence revealed that the Will prepared by the neighbour did not conform completely with the Testator’s wishes in that the Testator had wanted to leave $20,000 to the Children’s Hospital and $5,000 to a Church. Instead the Will left the whole of the net estate to the neighbour executor’s wife with a non-binding request that she make a gift of two sums to the Church and the Hospital.
In this case the Court was satisfied that the Testator understood that subject to gifts to the Hospital and Church, all of his estate would be given to the executor neighbour’s wife, “The closeness of his relations with his neighbour makes that a perfectly rational gift, particularly in the absence of any relative with a claim on his testamentary bounty”. The fact that this Will represented a departure from past Wills did not of itself mean that the Testator could not have a change of mind “A change of mind is not itself suspicious, particularly as every passing year may have strengthened the bond of friendship” between the Testator and the beneficiary named in his Will.
Whilst the degree of suspicion will vary with the circumstances of each case “It may be slight and easily dispelled. It may, on the other hand, be so grave that it can hardly be removed” this case was not of the latter kind and the Court was prepared to find there was a rational explanation for the Testator wishing to leave his estate (subject to two small legacies) to the executor neighbour’s wife. The Court utilised its power to rectify the Will to ensure that the gifts to the Hospital and Church were given effect in accordance with the Testator’s wishes.
Much of the turmoil and expense of the above court case could have been avoided if the Testator had only consulted his Solicitor to draw up his new Will. Accumulating assets takes time and for many it can often take a lifetime. It makes sense then that you should take the time to seek professional advice to make a Will that adequately records your wishes as to the ultimate destination of your wealth. At Everingham Solomons we have the expertise and experience to assist you with all your Estate planning needs because Helping You is Our Business.
Click here for more information on Lesley McDonnell
A Willmaker died in 2014 leaving a Will he had made in 2009. The Willmaker was survived by his adopted son Rodney, 3 adult daughters, 2 grandchildren Kerryn and Roxanna and his ex-wife Rae.
The only asset of the Willmaker at the date of his death were two shares in a company. The most substantial asset of the company consisted of NSW farmland and was valued for probate purposes at $2 million. Located on the Property were two substantial dwellings – one a home in which the Willmaker had lived in for many years and a second dwelling in which Rae had resided in since 1984.
By his will the Willmaker appointed Ornella as his Executrix. Ornella was not related to the Willmaker but had been a great source of support to the Willmaker over many years. The 2009 will contained a number of typographical errors and inconsistent clauses. The main issue for the Court was how to construe the inconsistent clauses of the Will in an effort to try and give effect to the Willmaker’s wishes.
The Will contemplated the sale of real estate with a division of 7/10 of the real estate to one group of family members and a division of the remaining 3/10 to another group of family members on the one hand, but on the other hand specified that the sale of the real estate was not to include the two dwellings because the dwellings were to be gifted to Ornella. The dwellings could not be excised from the real estate without subdivision. However it was not permissible for the real estate to be subdivided. As a result the gifts to the real estate to the two family groups would be stymied.
An application was made to the Court to construe the Will. The Court found on a true construction of the Will, the Property must be sold and the proceeds of sale distributed in designated proportions and divided between family members named in the Will but as the subdivision was not permitted the gifts of the dwellings to Ornella failed.
Whilst the Willmaker’s desire may have been to “keep things simple” by preparing a Will in his own words unfortunately the outcome in this case was anything but simple because the family were forced to make an application to the Court to construe the terms of the Will.
At Everingham Solomons, we have the expertise and experience to assist you with all your Estate planning needs including helping you prepare a Will that suits your individual circumstances because Helping You is Our Business.
Click here for more information on Lesley McDonnell
Making a valid Will is one of the most important things a person can do to protect their loved ones. Over time a Will needs to be reviewed and updated so that it properly reflects life changing events. Making a homemade Will can subject an estate to significant delay and expense not to mention stress to the parties involved whilst they await the outcome of a court determination of the Will. A Queensland case provides an insight into one family’s predicament when husband and wife willmakers signed their 2006 joint Will having drawn it up themselves.
The husband willmaker died in 2012 survived by his second wife, Elizabeth. Both the willmakers had been previously married and had children from their previous relationships, but no children from their marriage together. An application was brought before the court to determine a number of issues surrounding the uncertain terms of the Will and the destiny of the family home which contrary to the terms of the Will had been held by the willmakers as joint tenants.
Broadly speaking, the intention behind the joint Will was that the survivor of the husband willmaker and Elizabeth was to be looked after during their lifetime but, on their death, the property of both husband and wife willmakers was to be equally divided so that it went half to the husband willmaker’s children and the other half to Elizabeth’s daughter. The court observed “The drafting of the Will in this case is so poor that I wondered whether or not I could sensibly give any effect to it”.
At the time the 2006 Will was made and at the death of the husband willmaker, the main asset owned by the willmakers was their home, which they held as joint tenants. Normally when property is held as joint tenants upon the death of the first titleholder, the property passes by survivorship to the surviving titleholder who is thereafter free to deal with the property as they see fit. And that’s exactly what Elizabeth did when she sold the home. Here the complicating factor was the existence of a joint Will which sought to limit each willmakers freedom to dispose of assets.
In this case the court found that there was a joint Will where both parties pursuant to an agreement in the form of their Will, made provisions that after the death of either one of them, the survivor was only to have a life interest in the property which they held as joint tenants. That agreement was inconsistent with the continued existence of the joint tenancy. The Court put it back on the family to reach an agreement as to the division of the remaining sale proceeds of the home rather than pursue further litigation which would see none of them gaining any of the benefit that their parents intended for them.
At Everingham Solomons we have the expertise and experience to assist you in making a Will that is in conformity with current law and deals with your particular circumstances Because Helping You is Our Business.
Click here for more information on Lesley McDonnell
If you are a rural landholder within the Liverpool Plains Council area and do not currently have a dwelling constructed on your land but you are intending to construct a dwelling in the future, please be aware that existing holding provisions under the Local Environmental Plan expire on 9 December 2016 .
The permissibility to build a house on land is set out in the Liverpool Plains Local Environmental Plan 2011 (“LEP”). Generally speaking, for land that is zoned RUI Primary Production, R5 Large Lot Residential, E3 Environmental Management and E4 Environmental Living, the LEP specifies that a house can only be built if:
The land is a minimum size;
The land is a lot from an approved subdivision of Council; or
The land comprises an existing holding.
The existing holding provisions under the LEP relate to the historic ownership of land at a certain date. There is some level of complexity surrounding whether a particular parcel of land constitutes an existing holding in part because the information required to make this assessment may be held in a number of places which requires detailed investigation and in some instances there may be insufficient information available to make a determination that a particular parcel of land constitutes an existing holding.
Information as to whether property constitutes an existing holding is available from Council by lodging an application and payment of a prescribed fee. If it is determined that property constitutes an existing holding, landholders who wish to preserve their dwelling entitlement to build a house are encouraged to submit a development application to seek consent for a ‘building envelope’ prior to 9 December 2016. This will afford landholders an additional five (5) year period in which to build. Failure to act before the December 2016 deadline could result in the loss of a dwelling entitlement if the property does not otherwise meet the minimum lot size set by the LEP or is not an approved subdivision of council.
If you are a rural landholder within the Liverpool Plains Council area please be aware that the window of opportunity to construct a house via existing holding provisions is closing. If you have questions or concerns about your rural property please contact the experienced team at Everingham Solomons where Helping You is Our Business.
Click here for more information on Lesley McDonnell
With an increasing incidence of mental illness affecting a significant proportion of our ageing population, an enduring Power of Attorney is an important legal document that enables trusted friend(s) and/or family member(s) to assume the role of substitute decision maker for financial and legal matters when a person becomes incapable. By taking steps to put in place an enduring Power of Attorney today, you have the power to nominate who you want to make decisions for you if you lose capacity. Failing to make an enduring Power of Attorney means there is no guarantee that the people you want making decisions for you will be the same people appointed as your financial manager.
Sometimes the role of a substitute decision maker involves making some big decisions which can in turn effect the distribution of a deceased person’s estate when the willmaker dies. For example selling the family home to help pay for entry into a nursing home. With this in mind, a willmaker should ensure that their Will takes into account their wishes before incapacity strikes.
Ademption occurs when property that has been gifted in a Will ceases to form part of the willmaker’s estate when they die. This can lead to unfair or unexpected outcomes because the willmaker’s wishes go unfulfilled and can leave a beneficiary disappointed.
In NSW there is legislation that provides an exemption to the failure of a gift of property that has to be sold by an attorney acting as a substitute decision maker for a willmaker. This exemption applies to Powers of Attorney signed after 16 February 2004. However a better approach that creates less angst for an attorney or an executor and more certainty is for a willmaker to ensure their Will properly takes into account their wishes. The best way of ensuring this is for the willmaker to regularly review their Will and update it when their circumstances change.
A properly drafted Will can make provision for contingencies such as the gift of specific property to a beneficiary but if that property has been sold then the proceeds of sale. Alternatively if the sale of that property seems likely, a willmaker may prefer to make a gift of a share of their residuary estate to a beneficiary rather than making a specific gift of property to avoid the gift failing if it is not owned by the willmaker at the date of their death.
At Everingham Solomons, we have the experience and expertise to assist you with all your Estate planning needs because Helping You is Our Business.
Click here for more information on Lesley McDonnell
An enduring Power of Attorney is a legal document that permits a person (‘the Principal’) to appoint a trusted friend or family member, or more than one (‘the attorney’) to step into the Principal’s shoes and manage their legal and financial affairs if for some reason the Principal’s decision making ability is lost. This type of Power of Attorney is aptly named an enduring Power of Attorney because the attorney’s power to make decisions for the Principal endures or continues if the Principal loses their mental capacity to manage their own affairs.
