Do I need a solicitor?

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthMost people only seek legal advice for problems when they arise – when going through a divorce or after an accident for example. But what if your lawyer is like a best friend you didn’t know you needed?

If you consult a lawyer BEFORE a legal issue arises, they can help you anticipate and prevent serious legal problems, saving you a lot of money and heartache in the long run.

If you’ve never worked with a lawyer before, some common situations where getting legal advice from a lawyer may be necessary include:

• The sale or purchase of a house, property or business
• An accident involving personal injury or property damage
• A family problem such as divorce or a child custody dispute
• Workplace disputes including discrimination or harassment on the job
• When you are starting a business
• The drafting of a will, trust, or estate plan

So when should you talk to your solicitor? It is best to communicate with your conveyancer/solicitor as soon as you have decided to embark on a new venture.

For example if you plan to purchase a property – you should get your solicitor to review the contract before you sign it. Otherwise you may encounter problems of not completing the contract on time, or there may be disputes over inclusions which were not itemized on the contract prior to exchange. These and many other problems can be avoided if the purchaser consults with their conveyancer/solicitor from the very beginning.

Another example is when you are selling a property. By law you must have a contract of sale drafted BEFORE you market a property. A marketing contract is provided to your real estate agent for the purposes of advertising your property. However, if your property has been on the market for a long time or you choose to put the property up for auction. Before doing so, your marketing contract should be reviewed as there could have been legislation changes that affect the marketing contract. If the agent uses the outdated marketing contract as the auction contract and proceeds to auction. This can cause issues for the vendor allowing a purchaser to withdraw from the contract up to the time of settlement. This can have devastating consequences and costs for the vendor.

Another time that is especially critical to see your solicitor first is when purchasing a business. Once committed, it is very difficult or costly to change business entities if you have not selected the most tax-advantageous business structure. Related issues such as the transfer of employee entitlements again can be very costly if not adequately covered in the initial negotiations.

At Everingham Solomons, we have the expertise in Property Law, Business Law, Family Law, Wills and Estates to help you make the right decisions. The sooner you speak to us, the more we can help because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

 

Publishing a Notice of Intended Distribution in a Deceased Estate

Headshot of Jessica Wadwell - Conveyancer at Everingham Solomons TamworthOnce Probate or Letters of Administration has been granted by the Court in a deceased Estate, and before any assets of the Estate are distributed, the legal personal representative (i.e. executor or administrator) of the Estate has the ability to publish a notice of intended distribution, in accordance with section 92 of the Probate and Administration Act 1898.

Where is the notice published?
On the NSW Online Registry for Courts and Tribunals.

What does the notice state?
The notice outlines the deceased’s details and, in brief, states that any person having any claim upon the Estate must send particulars of the claim to the legal representative within 30 days of publication of the notice. The notice further states that after the 30 days, and after 6 months from the date of death of the deceased, the legal representative intends to distribute the Estate having regard only to the claims of which the legal representative has notice at the time of distribution.

Why is the notice important?
The notice provides legal representatives with some protection in their capacity as legal representatives against claims made, in accordance with section 93 of the Succession Act 2006. A legal representative who properly distributes property of the Estate after publication of a notice of intended distribution will not be liable in respect of that distribution to any person who has a claim (for example, beneficiaries or next of kin seeking to make a family provision claim), unless the legal representative had notice of the claim at the time of the distribution.

Can the notice be published in an Estate where a Grant has not been obtained?
One of the disadvantages of administering an Estate without a Grant of Probate or Letters of Administration is that a notice of intended distribution is unable to be published. Whilst the size and nature of the assets of an Estate are commonly considered by the executor or proposed administrator when deciding whether to obtain a Grant, having the ability to publish a notice of intended distribution should also be considered by the executor or proposed administrator.

At Everingham Solomons, we have the expertise and experience to assist you in administering deceased Estates because Helping You Is Our Business.

Click here for more information on Jessica Wadwell

Don’t make promises you don’t intend to keep

Headshot of Lesley McDonnell - Senior Associate at Everingham Solomons TamworthDuring their lifetimes, the deceased and her late husband had a longstanding share farming arrangement with David “[T]heir aspiration to be able to enjoy an idyllic farming property depended upon their being able to secure the services of a farmer like David, who was prepared to work hard for very little income”. In 1988, after the death of her husband, the deceased represented to David that the farm was to pass to him upon her death, together with a sum of money. The deceased died in 2016. The deceased was survived by her 2 daughters Hilary and Jocelyn.  At the time of her death, the deceased was the owner of the farm that she left by her will to Hilary and a bequest of $200,000 to David in her will.

David applied to the Court alleging that by leaving the farm to Hilary in her will rather than to him, the deceased had acted unconscionably in conflict with a promise that had been made to him by the deceased to the effect that the farm would one day be his, in return for David continuing throughout the deceased’s lifetime to conduct share farming on the farm. David claimed that he continued with the share farming agreement, and undertook additional tasks on the farm, in the expectation that the deceased would uphold the promise and leave the farm to him.

Proprietary estoppel by encouragement “comes into existence when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed his or her position to their detriment. If these matters are established equity may compel the owner to give effect to that expectation in whole or in part”.

The Court was “satisfied that David acted on the faith of that assurance to his detriment by continuing the farming operation” on the farm “for about 23 years thereafter in the belief that he would inherit that property” under the deceased’s will. “The average income received by David was in the order of one third of the average annual total male income calculated on the basis of 2020 equivalent dollars”. The deceased ought to have known that part of David’s “motivation for continuing was the expectation that he would inherit the farm”. “In those circumstances, it was unconscionable” for the deceased “not to have left the farm to David in her will”. Accordingly, David established his case and was entitled to the farm.

A promise or representation made by a willmaker to another may be enforceable particularly when another person acts on the faith of a promise or representation to their own detriment believing they will inherit property. At Everingham Solomons we have the expertise and experience to advise you on your legal rights because Helping You is Our Business.

Click here for more information on Lesley McDonnell

When there is a Will, there is a way

Headshot of Terry Robinson - Accredited Specialist and General Counsel at Everingham Solomons TamworthBut what if there isn’t a Will?  Well… there still is a way, but it does become a bit trickier and more involved process for the relatives of the deceased person.

If a person dies without making a Will or if they make a Will, but it fails to dispose of all assets properly or there is no beneficiaries who have survived the testator, then that person is deemed to have died intestate.

The Succession Act 2006 (NSW) deals with intestacy and outlines the general rules for who will benefit from a person’s estate if they die intestate.

So who gets your things if you die without a Will?

That really depends on your situation. Generally speaking, if you have a spouse, they will be entitled to your estate. The exceptions are if you have more than one spouse or you have children from a previous relationship.

If you have more than one spouse, your spouses are entitled to equal distribution of your estate.

If you have children from a previous relationship, then your spouse will be entitled to your personal effects, a gift of $350,000.00 (adjusted by CPI) and half of the rest and residue of the estate. Your children will be entitled to the balance of the rest and residue to be shared between them equally.

If you do not have a spouse, the general order for entitlement is as follows:

  1. Your children (but where a child has died and left children, their share will go to your grandchildren); and if none
  2. Your parents; and if none
  3. Your siblings (but where a sibling died and left children, their share will go to your nieces and nephews); and if none
  4. Your grandparents; and if none
  5. Your aunts and uncles; and if none
  6. Your first cousins; and if none
  7. The NSW Government.

If there is more than one beneficiary, then the share will be divided equally between them.

It is a common misconception that if you die without a Will, then the Government will receive all your assets. As you can see this is only true if the person who died had no immediate relatives that survived them.

Overall, it is much simpler for your relatives if you make a Will before you die because the process to administer an Estate of a person who died intestate is more complex and costly as the deceased did not give any person the authority to administer the Estate. This means that a grant of Letters of Administration must be sought so that there is someone with the authority to do the things necessary. More importantly, without a Will, your assets may not go to the people you wish to benefit.

If you would like to make a Will or have any questions about making a Will, please contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Terry Robinson

But that’s mine!

Headshot of Sarah Rayner - Solicitor at Everingham Solomons TamworthA common document that many people put in place when completing their estate planning is a Power of Attorney. This allows another person to make financial and legal decisions on behalf of that person.

A person’s financial affairs can be quite intricate and the person who is acting as the Attorney can sometimes be required to make some complicated decisions.

Specifically, the Attorney can be put into a difficult position when the person they are acting for has significant expenses, but there is not enough money to pay for them. The Attorney does not have much of a choice other than to sell some of the person’s assets.

This is quite common when a person becomes elderly or their care needs increase.

In order to pay for care facilities, many people will have to sell some of their assets, such as property, to be able to afford the entry payments.

An Attorney generally also has the power to sell these assets on behalf of another person, but what if by doing so, they are effectively stripping a third-party of their benefit under that person’s Will?

S22 of the Power of Attorney Act 2003 deals with this very issue.

When a Power of Attorney, which has been drafted in accordance with this legislation, sells an asset that has been gifted to a third party under a Will, the Estate of that person will be obligated to account for this, by way of Ademption. This is a fancy way of saying that the Beneficiary, who was disadvantaged by the Attorney’s actions, will receive a cash payment of the net proceeds of sale (or whatever is left over) out of the Estate, before the rest of the estate is distributed.

So even if a person’s gift is sold by an Attorney, they will be compensated for the value of that asset, so far as possible.

If you have questions about Attorney’s duties or more generally Estates contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Sarah Rayner.

What happens to a mortgage for land when a person dies?

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthAfter your funeral and your family has had time to process the loss of a loved one, it is necessary for the executor to deal with the deceased’s assets and liabilities.

As land is involved and a Will was made, Probate will need to be obtained. This is a document issued by the Supreme Court acknowledging the validity of the deceased’s Will and authorizes the executor/s to administer the Estate.

If a Will was not left, the next of kin of the deceased will need to apply for Letters of Administration. This is a document issued by the Supreme Court authorizing the next of kin (known as the “Administrator”) to administer the Estate according to intestacy rules.

The executor needs to contact the Bank to advise of the death and provide certified copies of the Death Certificate and Probate in due course.

There are three ways you can hold land in NSW and transfer the land.

They are:-

Sole Owner

The deceased holds land only in their name. The land will be dealt with as part of the deceased’s Estate. Subject to the deceased’s Will, the land may be sold or left to a beneficiary.  If left to a beneficiary, a new loan needs to be prepared. Written consent from the Bank needs to be obtained prior to the land being transmitted to the beneficiary. A Transmission Application form is required to be lodged with NSW Land Registry Services through the electronic conveyancing platform called PEXA.

Joint tenant

The deceased and another person holds the land as joint tenants. This is the most common way married or de facto couples own land. Whilst each person holds an individual interest in the land, when one person dies, the legal concept of “survivorship” takes place. That is, the interest of the deceased person will automatically pass to the surviving joint tenant. The land does not form part of the deceased’s Estate. The surviving joint tenant needs to speak to the Bank about continuing on the mortgage payments and the Bank needs to provide their consent prior to the lodgement of a Notice of Death form to NSW Land Registry Services by PEXA.

Tenants in Common

The deceased and another person are co-owners of the same land holding as tenants in common in equal shares or hold an unequal share, for example 80/20. When a person dies their individual share in the land does not automatically pass to the other surviving owners. Instead, the deceased person’s share in the land will form part of their Estate and be distributed in accordance to their Will or if they did not leave a Will, by the laws of intestacy. If the land is not to be sold but instead to be transmitted to a beneficiary, the beneficiary needs to prepare new mortgage documents. A Bank’s written consent needs to be provided prior to lodgement of Transmission application to NSW Land Registry Services by PEXA.

At Everingham Solomons, we have the expertise to assist you with all legal matters regarding your land, because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

Financial Management and Guardianship Orders: For those who don’t plan for the future.

Headshot of Nick Hawkins - Solicitor at Everingham Solomons TamworthA Power of Attorney (POA) and Appointment of Enduring Guardian (AEG) are documents that allow you to appoint another person to make major decisions on your behalf, usually when you do not have capacity to make such decisions yourself.

While these are very useful and practical documents to have, many people do not have a POA or AEG.  So what happens if a family member or someone you know loses capacity to make decisions in their own best interests without having a POA and AEG in place?

For small decisions it is usually fine for close family members or carers to act informally on behalf of the person that does not have capacity. However, they do not have authority act on that person’s behalf to make major decisions; such as if they needed to sell their house or dispose of other assets, make decisions in relation to the medical treatment that person receives or give consent for them to be cared for in an institution.

In order to legally make decisions on behalf of someone that does not have capacity and does not have a POA or AEG you must make an application to the NSW Civil and Administrative Tribunal (NCAT).

An application for a Financial Management Order is required when you need to make financial or legal decisions on behalf of someone else and an application for a Guardianship Order is required to make medical and lifestyle decisions.

These applications require you to provide information about yourself, the person you are making the application for and any other family member or persons who may be affected if the orders are granted. You will also be required to provide details of why you are making the application and evidence that the person you are making the application on behalf of, no longer has capacity to make decisions in their own best interests.

Once the application has been received by NCAT you will receive a hearing date. Usually, both the person or people making the application and the person whom the application is made for are required to attend the hearing.  At the hearing, the application will be considered and the Tribunal Members will want to hear evidence from the person making the application as well as any other significant person, which may include family members or treating doctors of the person that no longer has capacity.

This will allow the Tribunal to decide if the desired order should be made, and if so, who the best person or people are to grant the order to. Simply submitting the application to NACT does not guarantee that such an order will be made in your favour to make decisions on behalf of the person who does not have capacity.

If you need assistance or advice regarding Financial Management Orders or Guardianship Orders or wish to submit an application to the NCAT office in Tamworth, contact a solicitor at Everingham Solomons because Helping You is Our Business.

Click here for more information on Nick Hawkins.

“With great power comes great responsibility”

Headshot of Lesley McDonnell - Senior Associate at Everingham Solomons TamworthWhilst the role of executor of a will cannot be forced upon a person, the role if accepted, means the executor “owes a fiduciary duty to the estate in exercise of each of the duties of an executor”. If an executor prefers his or her own personal interests to those of executor and intends to neglect his or her executorial duties, they can be removed from the office of executor and stripped of power as a recent case illustrates.

The deceased died in 2019 survived by three (3) adult children Scott, Marla and Donna.  By her will, the deceased appointed Scott as executor and left shares in a company to Scott and the rest of her estate to a discretionary Trust. The beneficiaries of the Trust included Scott, Marla and Donna. The effect of the will was to transfer the estate either to Scott or to the Trust for which Scott controlled the Trustee. Donna and Marla, having effectively been excluded from the estate, commenced family provision proceedings.

About 17 months before the deceased died, the deceased entered into what the Court described as a ‘series of extraordinary documents’ which had no commercial purpose but were designed only to avoid the existence of a fund upon which a family provision application could be made.

Of significance was a conversation that took place between Scott and Marla in 2019. The Court noted “The recorded conversation shows a deep-seated animosity of Scott towards Donna. In my view, in the recorded conversation, Scott reveals his intention to access the estate’s funds to fight any claim knowing that Donna will have to fund any legal fees herself. There is a plan stated by him to run her out of money”.

Probate of the deceased’s will was granted to Scott in early 2020.

Donna made an application to remove Scott as executor and revoke the grant of probate.

The Court noted “The starting point is that the choice of an executor is that of the testator and that choice ought to be honoured unless there is some good reason why the chosen executor ought not continue to administer the estate”. “Here, the applicant has made out an overwhelming case for the removal of the executor”. The transactions that took place 17 months before death “were designed… to defeat any family provision application by Donna and Marla. Scott has a clear interest in defending the inter vivos transactions. Therefore, a central question is whether that circumstance is likely to lead Scott to prefer his own interests to the due administration of the estate”.

The Court held “The proper administration of the estate will be frustrated by Scott continuing as executor. An executor should be appointed who will objectively consider the issues facing the estate”. Accordingly, the grant of probate to Scott was revoked and Scott was removed as executor of the will.

Whether you are an executor of a will, or wishing to make or update your own will, we have the expertise and experience to assist you because Helping You is Our Business.

Click here for more information on Lesley McDonnell

Binding Death Benefit Nominations: Traps to Look Out For

Headshot of Nick Hawkins - Solicitor at Everingham Solomons TamworthA Binding Death Benefit Nomination (BDBN) is a document that allows you to decide who will receive a benefit from any Superannuation you have accrued at the time of your death. Making a BDBN is an essential part of estate planning. A lot of people are not aware that their superannuation will not automatically be distributed through their Will. If you have seen a solicitor to create or update your Will, it is also worthwhile making a BDBN.

There are three main traps to look out for when making a Binding Death Benefit Nomination:

1. Make sure the nomination you have made is in fact binding. Superfunds will often offer binding and non-binding options. If you only have a non-binding nomination your superfund is not bound to follow your directions and they can use their discretion to decide how your superannuation is divided among your family. If you want to take the decision out of the hands of your superfund and ensure your wishes are followed, check the type of nomination you have made to confirm that it is binding.

2. The second trap of BDBNs is that they often lapse every three years. Some superfunds do offer non-lapsing nominations that are also binding. However, just like making a Will, your BDBN also needs to be reviewed every few years. A Binding Death Benefit Nomination that has expired is not enforceable, so it is important that you actively review the nomination and keep it up to date.

3. Not everyone is eligible to be nominated as a beneficiary of your superannuation. You can only nominate someone that is:
a. a dependant;
b. someone who is in an interdependent relationship with you (such as a partner or spouse);
c. your children, including:
i. stepchildren (provided the relationship between the child and their natural parent is not severed by death or divorce);
ii. adopted children; and
iii. adult children; or
d. your legal personal representative (such as the executor of your Will)

If you nominate your legal personal representative your superannuation will be directed to your executor(s) who must distribute it in accordance with your Will. This is the only way to direct your superannuation to someone that does not fall into one of the above categories.

When you make your BDBN your superfund will not know if the people you have nominated fit into one of these categories and will automatically assume you have made a valid nomination. Only once the BDBN comes into effect will the superfund consider your nominations. Anyone nominated that does not come under one of the above categories cannot receive a benefit from your superannuation and your nomination will be invalid.

If you need assistance or advice regarding Binding Death Benefit Nominations or other estate planning issues contact a solicitor at Everingham Solomons because Helping You is Our Business.

Click here for more information on Nick Hawkins.

Skimping on a Will now may cost a small fortune later

Headshot of Lesley McDonnell - Senior Associate at Everingham Solomons TamworthWhen people seek to make a homemade Will ‘on the cheap’ without professional advice, it can cause additional stress and anxiety for the Willmaker’s family if a dispute arises as to the meaning of the Will with associated costs of litigation to resolve issues depleting the estate. A recent case serves as a timely reminder of why expending time and money on a professionally drawn Will now “is a sound investment” for the future.

The deceased died in 2017. The deceased was survived by her husband and her two children. The deceased left only a modest estate. When she died, the deceased left a homemade Will. By her Will the deceased sought to make a gift of a particular residence with a direction that the residence was not to be sold “until majority of the residing tenants agree to the action. I wish my children to remain in abode as long as it is deemed reasonable” (‘the first clause’). After making a number of other gifts, a subsequent clause in the Will empowered the Executor to sell assets in the estate on such terms as he considered expedient (‘the subsequent clause’).

As the Will was not clear and the beneficiaries adopted different positions on what they viewed the Will to mean, the Executor applied to the Court for directions as to the proper interpretation of the Will.

The Court observed that the subsequent clause of the Will was quite difficult to reconcile with the rest of the Will. Having made quite specific directions in the first clause of the Will, the subsequent clause appeared to get the Executor to ignore the first clause of the Will entirely. On the face of it at least, the Court observed “it was not possible to reconcile” the first clause with the subsequent clause of the Will.

After undertaking a review of the rules to be applied when construing a Will, the Court ultimately determined there was “no alternative” but to conclude that the first clause of the Will was void for uncertainty. When the wide ambit of the subsequent clause is added in “it is simply not possible to give a construction of this Will which makes sense”.

The consequence was a partial intestacy which resulted in the share of the deceased’s husband in the estate being enlarged by the addition of the gift of the particular residence that failed in the first clause of the Will.

Where the Court has to determine the proper interpretation of a homemade Will, “there is no doubt a good part of the estate will be consumed in a contest over the meaning of what by any measure is a difficult document. It is invariably the case that money spent on having a Will professionally drafted is a sound investment”.

At Everingham Solomons we have the expertise and experience to assist you in making a Will that deals with your particular circumstances because Helping You is Our Business.

Click here for more information on Lesley McDonnell