There are certain classes of people that may contest a Will. The law appreciates that a person has the right to choose who their Estate is left to, but the Succession Act 2006 allows some people to challenge a Will if they have been unfairly left out.
The people that are able to challenge a Will include the following;
A wife or husband;
Those that are in a de facto relationship, with the deceased, at the time of death;
A child of the deceased;
A former wife or husband of the deceased; and
A grandchild or member of the household that has been dependent on the deceased.
Once the Court is satisfied that the Plaintiff is “an eligible person” they will then look at the factors as outlined in Section 60(2) of the Succession Act 2006. These include the type of relationship between the Plaintiff and deceased, the nature and extent of the obligations or responsibilities, financial resources of the Plaintiff, financial situation of people cohabitating with the Plaintiff, any physical or intellectual disability of the Plaintiff as well as character and conduct of the Plaintiff during the deceased’s life time. All of these factors are considered by the Court when looking at whether there should be some provision for the Plaintiff.
The Court will also consider any provisions made for the Plaintiff during the life of the deceased. That is to say that if the deceased help the Plaintiff financially during his or her life time that will be relevant to any claim made by him or her.
If you wish to challenge a Will or defend a Will if you are an Executor, please contact us at Everingham Solomons for assistance because Helping You is Our Business.
The form of power of attorney (‘POA”) now used in NSW is a very simple but often misunderstood form.
Whilst the standard form is simple, it will often be appropriate to make significant changes to it to reflect the individual circumstances of the person giving the POA.
The issues that may need to be covered by a POA are constantly evolving. A good example of this is the treatment of so-called “digital assets” which are becoming more and more important to all of us.
Research in the USA indicates –
More than half of individuals over 65 use the Internet;
95% of people have an online presence from the age of 2; and
A representative sample of Internet users had, on average, 25 passwords.
So what happens to our online presence should we lose capacity? It would certainly be reasonable to expect that a POA given without qualifications should allow an attorney to access information and deal with assets online. Unfortunately, the practicality is not that easy, particularly when the relevant account can only be operated online.
At a conference I recently attended, the presenter recounted a case that he had recently been involved with where an elderly lady (let’s call her “Edna”) had placed a large amount of money into an online investment account. She had been “cyber safe” and kept her pass words and indeed the existence of the account to herself.
At the age of 78, Edna suffered a severe stroke and lost capacity. She had previously given a standard form POA but her attorney was not aware of the account until receiving a letter from the financial institution notifying Edna of changes to unclaimed monies legislation entitling the Commonwealth to take any money from a person’s bank account which had not been operated for 3 years. Ironically, that is what happened to Edna’s money and ultimately it took several years and much expense before it could be retrieved and accessed by the attorney. These difficulties could have been avoided had Edna –
specifically dealt with digital assets and information in her POA; and
left her password and account details in a form that could be accessed by her attorney readily if the need arose.
At Everingham Solomonswe can provide expert advice on POA issues because Helping You is Our Business.
Every day people are involved in accidents or become sick. Sometimes this can mean that you are unexpectedly not able to make decisions for yourself. There is a way to ensure that someone you trust can make decisions for you should this power be taken away from you.
Making a document called an Appointment of Enduring Guardian is a powerful and proactive step that you can take today whereby you can appoint a trusted friend or family member (or more than one) to make health and lifestyle decisions for you in the event that you are unable to make decisions for yourself.
It is a common misconception to think that only the elderly need to appoint an enduring guardian. Accidents and illness happen to people at all stages of life and from all walks of life. If you are over 18 years of age and you have the capacity to understand what you are doing then you can make an Appointment of Enduring Guardian.
Too often people think “well if I get sick, then I will make one”. By then it is often too late. If a person is suddenly rendered incapacitated and a decision needs to be made for them often this will necessitate an application to the Guardianship Tribunal. This in turn can make an already stressful situation more difficult with no guarantee as to who may ultimately be appointed by the Tribunal.
Making an Appointment of Enduring puts the power in your hands. You can choose who makes decisions for you and the types of decisions. For example your guardian (s) can decide:
where you live
what health care you receive
what personal services you receive
to consent to medical or dental treatment for you, and
to refuse medical and dental treatment in certain
circumstances
You can also make the above decisions subject to directions such as turning off life support where there is no reasonable chance of recovery and enabling your guardian to be able to obtain and view all of your health and lifestyle records where they would otherwise be unable to due to privacy laws.
Importantly, an Appointment of Enduring Guardian only takes effect if you become unable to make health and lifestyle decisions for yourself.
Thinking about not being able to make decisions for yourself is difficult but giving the power to someone you trust to make decisions for you is easy and can bring some much needed peace of mind to you and your family.
At Everingham Solomons, we have the experience and expertise to assist you in making an Appointment of Enduring Guardian which will ensure that your wishes are carried out, because Helping You is Our Business.
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Grandparents are often very generous in their support of their grandchildren. Sometimes that is a matter of choice. Sometimes, a matter of necessity. The issue of whether a grandchild is financially dependent upon a grandparent can be relevant in many areas of the law.
It is quite common theses days for grandparents to wish to pass their death benefit superannuation entitlements to their grandchildren . The ability to demonstrate the financial dependency of the grandchild is very relevant in this context.
In order to pay a superannuation death benefit to a grandchild, and for the grandchild to receive it tax-free, the grandchild needs to establish financial dependency upon the grandparent.
Financial dependency is a matter of fact and in each particular situation needs to be individually assessed. Case law suggests that financial dependency can arise even when the financial assistance provided was to enable the grandchild to maintain a standard of living higher than the necessities of life. Not surprisingly, the ATO takes a less generous approach.
The ATO position is that financial dependency occurs where the grandchild is wholly or substantially maintained financially by the grandparent. The following points are drawn from published rulings issued by the ATO –
If the financial support provided merely supplements the grandchild’s income and represents “quality of life” payments, it would not be considered substantial support;
issues of quality of life and enjoying a reasonable standard of living are irrelevant for the purposes of determining dependency;
paying for social outings, medication, pocket money, entertainment and sporting costs will not be sufficient;
amounts spent on luxury items such as entertainment rather than child’s day to day living expenses are not relevant;
payment of private school fees are not of themselves evidence of financial dependency but when coupled with other factors such as payment of necessary food, shelter and clothing expenses can be relevant to the issue of dependency; and
the financial support must be regular.
Often the biggest single issue to overcome to establish dependency is lack of proper records. Retaining evidence of expenditure on a grandchild will always be critical to proving financial dependency.
At Everingham Solomons we can assist you with all your estate planning including situations involving complex structures such as superannuation funds because Helping You is Our Business.
Recently, the Office of State Revenue announced that the First Home Owner Grant (New Homes) of $15,000 is being extended for a further two years from 31 December 2013 to 31 December 2015. On 1 January 2016 it will reduce to $10,000.
The First Home Owner Grant (New Homes) applies to the purchase of a new home only. It does not apply to the purchase of an established home, vacant land, business premises or a holiday home. A new home is a home that has not been previously occupied or sold as a place of residence.
To be eligible to apply for the Grant, you must be able to meet at least the following conditions:
You must be over 18 years of age;
The property must be purchased in your name and not in the name of a company or trust;
If there are two people buying together, one person must be a permanent resident or an Australian citizen;
All applicants and/or their spouse/de facto must not have previously owned a residential property, jointly, separately or with some other person in any State or Territory before 1 July 2000;
The purchase price must not exceed $650,000;
The applicant and/or their spouse must have not previously received a first home owner grant in any State or Territory; and
At least one applicant must occupy the home as their principal place of residence for a continuous period of six months, commencing within 12 months of purchasing the new home.
Like most applications, conditions apply and penalities will be imposed on any person who knowlingly supplies false or misleading information at the time of making an application for the grant. An assessment as to whether you are eligible to apply must be determined based on your individual circumstances at the time you are seeking to purchase a new home.
If you are a first home buyer and you are considering buying a new home, you should come and see our experienced property team who can help answer all of your questions and put you on the path towards owning your new home, because Helping You is Our Business.
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The transition to retirement living can be a rewarding one. Along the way some important decisions need to be made. One of those decisions may include moving into a retirement village. In an effort to help make that decision process easier for prospective residents, new laws come into effect on 1 October this year. It is timely to look at those changes and retirement living more generally.
Under the law, a retirement village is defined as being a complex containing residential premises that are predominantly or exclusively occupied by retired persons who have entered into a village contract with an operator of the complex. A retired person “means a person who has reached the age of 55 years or has retired from full-time employment”.
Up until this point in time there have been various forms of retirement village contracts.
From October there will be three main changes. Firstly, village operators will be required to use a new standardised village contract. Secondly, prospective residents will receive a general enquiry document that explains the services and facilities available to them in the village. Thirdly, a new simplified disclosure statement will be given to prospective residents before they sign a village contract.
According to the Minister for Fair Trading Anthony Roberts: “These reforms will make the move into a village easier and less stressful for retirees and their families”. The new standardised contract “will allow prospective residents to compare apples with apples when making the important choice of which retirement village to move into”.
After making an initial enquiry with an Operator of a retirement village, a prospective resident will be provided with a two page general inquiry document. The document provides general information about the village including the village type, costs to enter the village and village facilities.
The new version of the disclosure statement provides more detailed and specific information including financial arrangements particular to the village and unit.
The new standard contract covers matters such as what residence rights are involved, entry costs, the settling-in period, recurrent charges, services and facilities, alterations and additions, repairs and maintenance, sharing of capital gains, and departure fees.
As an added measure of protection for residents and their families, the legislation still provides for a settling in period and cooling off period.
Making the move into a retirement village has significant financial and legal implications. Taking the time to properly know and understand the village contract is essential to ensuring that the choice of retirement village is the right one for you. The experienced team at Everingham Solomons can help guide you through the process because Helping You is Our Business.
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It is not uncommon for a client to want to record their wish to become an organ donor in their Will. Is this the best way to notify family and doctors that you wish to donate your organs?
Unfortunately, by the time family members have turned their minds to firstly finding and then reading the deceased’s Will, their organs are unlikely to be of any use.
There are only very limited circumstances in which human organs can be ‘harvested’, and an extremely limited time window of opportunity to do so.
Only people who have suffered brain death, that is, their brain has died whilst the rest of their body has continued to function usually on a ventilator, are capable of donating organs.
If you wish to give the “gift of life” upon your death, the first step is to register your wishes by signing up to the Australian Government’s new Organ Donor Registry. Visit www.donorregister.gov.au. The registration process is easy.
You should also discuss your wishes with your loved ones, because doctors will rarely use a person’s organs if the grieving family members do not agree to it. According to statistics, less than 60% of grieving families give consent for organ donation to proceed. 43% of people say that they weren’t sure what the deceased person wanted.
According to the website there are about 1600 people on organ donor waiting lists in Australia, and they will spend on average between 6 months and 4 years waiting for the right organ donors to come along.
Previously the process for recording your intention to be an organ donor was different in every state. The new register is Australia wide and provides a one stop shop where people can easily and quickly confirm their intentions.
Doctors in emergency rooms across Australia have 24 hour access to the register so that they can begin the search for potential organ recipients from the earliest possible moment.
If you have previously registered on another register, it is important that you register on the National Organ Register so that your information can be linked to your Medicare number.
So the answer to the above question, is that organ donation is best recorded on the National Donor Register, rather than in your Will.
If you need any assistance in a legal matter, contact Everingham Solomons because Helping You is Our Business.
Purchasing property can be both an exciting and daunting experience. Exciting because on the one hand you have found the property you have been searching for and you start dreaming of what you will do to transform the house into your home. In what can seem like the daunting side to your property purchase is the point at which you first lay eyes on the contract for sale of land. The contract requires you to make some important decisions. When you purchase property with your spouse or partner, you must decide how you will buy the property together. You can purchase either as joint tenants or as tenants in common. The distinction between the two is an important one because it can have an impact on future life events for example a relationship breakdown or death.
If you purchase property as joint tenants, this means that upon your death, your interest in the property automatically passes to your spouse/partner. This is despite any provision in your will to the contrary. This is because your interest in the property does not form part of your estate and it is not available for distribution to the beneficiaries of your will. Many married couples own property as joint tenants. Also a joint tenancy may exist where property is held in trust.
By contrast, if you purchase as tenants in common, then your individual share in the property can be gifted in your will. Furthermore the respective shares in the property may be held equally (e.g. 50/50) or in some other proportion (e.g. 60/40, 75/25 or 80/20 etc). Sometimes couples may choose to own property as tenants in common if for example there are children from a previous marriage for whom they wish to make provision upon their death. Also investors often buy property together as tenants in common.
If property is owned as joint tenants there is a process by which that property holding can be unilaterally severed by one party. The other party is given notice of this before it occurs. There are circumstances where this can be an appropriate course of action.
Being aware of your options can assist you in making a more informed choice when it comes to buying your next property. At Everingham Solomons we have the experience to assist you with all your property needs because Helping You is Our Business.
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For some families, caring for a son or daughter with a severe disability is part of everyday life. For parents of a child with a severe disability, discussion will inevitably turn to the issue of what happens when those parents are no longer able to provide support for that child? Quite often parents will want to make provision for their child without affecting their child’s entitlement to an income support payment. For some parents the answer may lie in setting up a Special Disability Trust for their child.
A Special Disability Trust can be set up while parents are alive or in their Wills.
The purpose of a Special Disability Trust is to meet the reasonable care and accommodation needs of the principal beneficiary, for example a child with a severe disability, during the lifetime of the beneficiary. A Special Disability Trust may also financially benefit the principal beneficiary under the Centrelink assets test.
Before a Special Disability Trust can be set up, the principal beneficiary must fall within the definition of ‘severe disability’. Section 1209M of the Social Security Act 1991 sets out the definition of ‘severe disability’.
Due to the fact that Centrelink assesses whether or not a trust is a Special Disability Trust, it is very important to ensure that the Trust strictly complies with legislative requirements. To this end a model trust deed exists which contains the necessary clauses required for the trust to be classified as a Special Disability Trust.
A Special Disability Trust can have assets up to the value of $596,500 (indexed annually, and current as at 1 July 2012) (“the limit”) plus a residence held in the trust without these assets impacting on the principal beneficiary’s income support payment.
Where the assets of a Special Disability Trust exceed the limit, the amount in excess of the limit will be counted as assessable assets for the principal beneficiary and will be assessed against the relevant assets test threshold.
For the parents, a one off gifting concession may apply to a gift of up to $500,000 if the parent is a recipient of a social security pension and has reached the qualifying age, or receives a service pension and has reached veterans’ pension age, or receives a veterans’ income support supplement and has reached the qualifying age for the payment. Gifts in excess of the gifting concession are assessed under the normal gifting rules.
If you are considering making provision for a family member with a severe disability, it is important to obtain specialist legal advice. 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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There’s usually a relative, sometimes one who is hurt and sad because he or she has been left out of the Will or otherwise treated unfairly.
The hurt can be undone. Under the Succession Act 2006 (NSW), the Supreme Court can rewrite an unfair Will on the application of wives, husbands, de factos, children, former wives or husbands, dependents, grandchildren or members of the household of, or those living in a close personal relationship with the deceased.
An applicant for relief must show a need by reference to his or her age, health, financial situation, earning capacity and the like. An applicant must be “deserving” that is to say to have had such a relationship with the deceased that it might be expected that he or she would benefit under the Will. The applicant must show that the relief sought is reasonable given the size of the estate, and weighing the claims of the applicant against the claims of other people for whom the deceased person was under a moral obligation to make provision.
There is a time limit on applications. The proceedings must be commenced not later than 12 months after the date of death. Time can be extended on sufficient cause being shown.
A Will may be unfair because the deceased did not have sufficient mental capacity at the time that he or she made it. In this case, the Court can strike down the Will, which will revive the most recent former Will made by the deceased at a time that he or she had sufficient capacity The test of capacity centres on the deceased’s understanding of what constitutes his or her estate and who is entitled to benefit from such estate and why.
A Will may be unfair because it was made under undue influence. There are all sorts of unseemly relationships, which involve undue influence by one person over another. The Court has power to strike down a Will which is the product of undue influence.
Where there’s a Will there’s usually also a lawyer. At Everingham Solomons we have lawyers able to give expert advice in relation to claims arising out of unfair Wills and your first consultation with us will be free and absolutely confidential because Helping You is Our Business.
There are certain classes of people that may contest a Will. The law appreciates that a person has the right to choose who their Estate is left to, but the Succession Act 2006 allows some people to challenge a Will if they have been unfairly left out.
