Capacity is a fickle thing which Solicitors and other professionals are required to assess before a person can make certain decisions for themselves.
There are many factors which can affect ones decision making capacity; including a number of medical conditions, disability, age, and level of education.
Under Australian Law there is a presumption that an adult has their own decision making capacity.
In addition to this, there are some documents where a specific test for capacity is required. These documents usually require that a person specifically understand the nature and effect of the documents that they are signing.
Generally, this means that a person must be able to:
• Understand the facts and the choices involved with the decision;
• Weigh up the consequences and potential ramifications of the decision;
• Make a decision free from the influence of family and without coercion; and
• Communicate their decision clearly.
Remember, just because a person makes a decision that you don’t agree with, does not mean that the lacked the capacity to make that decision!
A person must have the capacity to make the decision at the time that the decision is made or effect is being given to the decision. For example a person must have capacity at the time of signing a legal document.
It is important that you think about your future while you have the capacity to do so. This might include planning for the event that you do lose the capacity to make your own decisions.
Documents such as a Power of Attorney and Appointment of Enduring Guardian can be drafted where you nominate someone to make decisions on your behalf, in the event of a loss of capacity. Unfortunately, once you lose capacity it is too late to put these documents in place.
If you wish to ascertain if you or a loved one could make a legal document or have questions about what happens after a person loses capacity please contact our office because at Everingham Solomons Helping You is Our Business.
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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Initially, you need to establish if the deceased person had a Will, to determine who the executor is, that is who can manage the Estate.
Next, has a grant of probate been obtained by the executor? If no, you will need to provide further information to the ATO if you wish to establish authority to deal with the tax affairs of the deceased person. If probate has been granted, then the executor has authority to notify the ATO of the person’s death and deal with their tax affairs.
Notifying the ATO of the person’s death can be in paper by completing a “Notification of a deceased person” form with a certified copy of the Death Certificate and Will and submitting it by mail. By doing this, you will have officially notified the ATO of the person’s death and made the ATO aware of the relevant parties acting on behalf of the deceased Estate i.e. the executor.
If you do notify the ATO online, you will need to attend an Australia Post office to provide a certified copy of the Death Certificate and supporting documents.
Alternatively, if you, as the executor have appointed a solicitor to act on your behalf for the Estate, the solicitor can provide the ATO with this information. However, you may be contacted by the ATO to confirm these details.
Do you need to lodge a final individual tax return? This is called a “date of death tax return”. As to whether you need to lodge this form will depend if the deceased:-
• had tax withheld from income they earned
• earned taxable income exceeding the tax-free threshold
• had tax withheld from interest or dividends because no TFN was quoted to the investment body
• lodged tax returns in prior years prior to their death
• should have lodged tax returns in prior years.
If a tax return is not required to be lodged, you need to complete a “non-lodgment advice” for the tax year and send it to the ATO.
Do you need to lodge a tax return for the deceased Estate? This will depend upon the assets of the estate and if any income is received or derived by the deceased Estate. If the Estate is not finalised within the income year and there is income derived from the Estate, then a deceased Estate tax return will need to be lodged every financial year until the deceased estate is fully administered or disbursed. If a deceased Estate return is required, a tax file number will need to be obtained for deceased Estate.
The above information is a general guide only. For enquiries regarding tax, we recommend you contact the deceased’s accountant or the executor’s own accountant to obtain detailed tax advice to finalise the tax affairs of the deceased.
At Everingham Solomons we have the experience and expertise to assist you with any deceased Estate issue, because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
I am writing this article overlooked by various family photos including pictures of my dog Charlie. He is very much a member of my family and I’d like to think that he would be well looked after if I was not able to do that personally.
Australia has a very high rate of pet ownership with over 60% of households containing one or more pets. Dogs are the most popular pet followed closely by cats and thereafter by a wide range of birds, horses and other animals.
Household pets often become very important to their owners but relatively few owners make formal provision for their pets in the event of the owner’s death or incapacity. That is usually due to oversight rather than lack of concern. So what can you do?
Most prudent people have Power of Attorney arrangements in place particularly to cover their affairs should they lose the ability to do that for themselves. Unless you make specific provision in your Power of Attorney for expenditure to maintain your pet, your Attorney may not be able to use your money to look after your pet.
Likewise, you need to consider pets in your Will. The issue is nominating the right person to look after your pet and making a financial arrangement to cover care costs after your death. You can’t give money to the pet itself but you can give money to a carer directly or through a trust to be utilised for the welfare of the pet. Your Vet will usually be able to give you some guidance about an appropriate amount to be set aside for future care of your pet.
When making arrangements for a pet either through your Power of Attorney or your Will, it will usually be prudent to also provide the proposed caregiver with “personal” information in relation to the pet. This would usually be done by a separate letter but could detail care instructions, food preferences, veterinary arrangements and likes and dislikes. This information can be invaluable to the carer in making decisions going forward.
At Everingham Solomons we can assist you with all your Estate Planning needs because Helping You is Our Business.
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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The position of a trustee of a trust is an important position which is governed by State and Commonwealth Legislation and Case Law.
Trustees of a family trust have many duties. Broadly speaking, these include the trustee:
• Acting in good faith;
• Acting personally;
• Acting unanimously where multiple trustees are involved;
• Not being dictated to by others such as beneficiaries;
• Having a duty to consider how distributions should be made and to whom; and
• Having a duty to avoid fettering of any discretion they have.
So can a trustee appoint someone else to perform the trustee’s duties, like an attorney? It is not uncommon to see where a Trustee has executed a power of attorney in favour of third party.
The law is that a trustee cannot delegate these duties unless permitted by the Trust Deed, legislation or a Court Order.
The office of trustee is viewed by the Courts as one of trust and personal confidence.
A trustee must not execute a Power of Attorney to a third party granting the attorney, general or wide powers relating to the authority of the trustee. A trustee who does this will be acting outside the scope of the trust and the law and any transaction entered into utilising such Power of Attorney is likely to be unenforceable.
Section 10 of the NSW Powers of Attorney Act states that a prescribed Power of Attorney does not confer authority to exercise any function as a trustee.
Accordingly, a trustee cannot delegate their powers and authorities.
There is a statutory exception with respect to trustees of a self-managed super fund.
Trusts, trust deeds, trustee duties and the law surrounding them are complex.
At Everingham Solomons, we have the expertise to assist you because Helping You is Our Business.
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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A Grant of Probate is a document issued by the Supreme Court that acknowledges the validity of the deceased’s Will and authorises the Executor/s to administer the Estate.
Whether or not Probate is required depends on the nature and value of the deceased’s assets.
If the deceased held land in their sole name or as tenants in common with another, Probate will be required.
Financial institutions, superannuation funds, aged care facilities and share registries may also require Probate for larger investments before they will allow those assets to be dealt with. Generally, such institutions will require Probate if the amount held with them is greater than $50,000.00.
What is involved in obtaining a Grant of Probate?
Ascertain assets and liabilities as at date of death
File an online Notice of Intention to make an application for Probate
14 days after the date of publication of the notice of intention, prepare and file a Summons, Grant, Affidavit of Executors, original Death Certificate, Inventory of Property and original Will with the Supreme Court.
It takes the Supreme Court approximately 4 weeks to issue a Grant of Probate. Once the Grant has been obtained, the Executor/s are entitled to deal with the estate assets and liabilities and distribute the surplus assets to the beneficiaries in accordance with the Will.
If a person dies without a Will, or with a Will but with no living Executor, the same process applies however the grant is called Letters of Administration.
The solicitors at Everingham Solomons have the knowledge and experience to assist you in dealing with a deceased estate because Helping you is Our Business.
Click here for more information on Suzanne Hindmarsh.
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;
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.
Click here for more information on Lesley McDonnell
A 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.
Click here for more information on Lesley McDonnell
Capacity is a fickle thing which Solicitors and other professionals are required to assess before a person can make certain decisions for themselves.
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.
Initially, you need to establish if the deceased person had a Will, to determine who the executor is, that is who can manage the Estate.
I am writing this article overlooked by various family photos including pictures of my dog Charlie. He is very much a member of my family and I’d like to think that he would be well looked after if I was not able to do that personally.
The position of a trustee of a trust is an important position which is governed by State and Commonwealth Legislation and Case Law.