Estate & Succession Planning

Estate Planning Articles

May 012019
 

Where’s there’s a Will, there’s sometimes a Way – to upturn it.

Karl Lagerfield died last month.  According to Le Figaro, his cat Choupette was to inherit a good bit of his estimated $300 million fortune.  She’s no retiring feline, this one, she has her own Instagram account.  Here is an image of Choupette with the sort of headgear (chapeau you know) you might wear when you are about to enrich the legal profession with much needed litigation by challenging a Will.

Cat

 

 

 

 

https://twitter.com/choupettesdiary/status/1098363903048847361

Emboldened, who might not be tempted to give the kids a nice farewell surprise, and leave their whole estate to the local cat’s home, or even the family cat?

Naturally, the courts respect your ability to leave your estate to whoever you wish.  However, in NSW, the Supreme Court can vary a Will by various means. 

Invalid Wills

Many people when they first think of bad Wills call to mind invalid Wills (scribbled on a beer coaster, not signed, not witnessed) or by a Willmaker without capacity (with dementia) or under undue influence.

Valid Wills that make Inadequate Provision for Family

However, a common claim not well understood is a claim for “Family Provision” where the Willmaker did not make “adequate provision”. 

An  estate can be subject to a claim for “family provision” by a person in the category of “eligible” family members, including a married or de facto spouse, or child, or who were a dependant living in the deceased’s household. 

Check here to see if you are eligible:  http://www7.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/consol_act/sa2006138/s57.html

The classic case of family provision is when a widow claims that she has been left with insufficient funds for her to have a roof over her head, and to cover her reasonable expenses of living.  In many cases, the courts will order that part of the estate be applied to buy a house for the widow, and to pay her house and living expenses.  It also common to see claims by children that have been left out or that have been included in a Will but have special needs for extra provision because of disability.

Family Provision Process

If you do have a family provision claim, your first stop will be a lawyer’s office.   If you have a claim, your lawyer will send a letter of demand, and if it is not resolved, you will file a Summons in the Supreme Court. You must do so within 12 months of the date of death. 

Your Summons will be supported by your Affidavit, a sworn statement setting out your financial situation, that of your spouse, your contributions to the deceased, and how the deceased looked after you. 

The court considers a wide range of factors, including the size of the estate, the financial capacity of the claimants and beneficiaries, before making a family provision order.

The resulting court cases can be prolonged and expensive.   It goes without saying the legal costs can deplete the estate.

Don’t leave your Will too late – Capacity

Apart from a claim for family provision, Wills can be disputed if the Willmaker lacked ‘testamentary capacity” to make the Will – that is, if the deceased did not understand that they were making a Will, their assets and who should be considered when making the will.  The prevalence of mental illness, in particular dementia in older people, indicates that you should do your Will while you are young and healthy. 

Get Advice Early -A stitch in time saves nine (cats’) lives

What to do?

First, you should review your Will now.  Tell your solicitor about those that have and do rely on you for support, and what you have provided for them in the past, and what you propose for the future. 

Second, if you expect to benefit from someone’s estate, and are to be left out, or have been left out of a Will, tell your lawyer, and get advice. 

Finally, do it properly. You don’t want to leave a mess and your relatives fighting like cats and dogs in the great big zoo for the legal profession and their clients known as the Supreme Court. 

Peter McNamara

 

Footnote

Statutory Wills

If you do lose capacity to make a Will, then you could have a “statutory Will” imposed on you, also under the NSW Succession Act.

The Supreme Court can authorises the creation, alteration or revocation of a Will on behalf of a person who lacks testamentary capacity.

The court looks at whether “the proposed will, alteration or revocation is, or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity”.  A statutory Will might be made for someone that has lost capacity or for someone that never had capacity.

 

Feb 052019
 

When it comes to estate planning, most clients know how important it is to have an up to date will. What a lot of clients don’t know is that their biggest asset may not be covered by the will. It used to be said that the family home was the biggest investment most people ever […]

Jan 222019
 

The unanimous High Court ruling in Thorne v Kennedy [2017] HCA 49 highlights the broadened circumstances in which financial agreements can be set aside in Australia, casting considerable doubt on agreements that are heavily weighted in favour of one party. The court set aside two financial agreements that were made pursuant to Part VIIIA of […]

Oct 232018
 

Peter McNamara has previously warned that you get your superannuation death benefits sorted:  http://www.cml.com.au/wills-smsfs-and-binding-death-benefit-nominations-get-yours-in-line Now a recent case shows that you should get your powers of attorney sorted as well. What happens to your superannuation if you lose capacity?  Your superannuation death benefits will be dealt with as set out in the superannuation trust deed.  Most […]

Jul 302018
 

Well, Barnaby Joyce has sure gotten our attention recently.  It’s as old as the hills:  Two people get together, one is older and already has kids, and the younger one is female. And a similar story should get our attention this week.  In this case, one man was older, and very rich, while she hardly […]

Jul 132018
 

Been left out of a will? Not received what you believe you are entitled to receive? You could be eligible to make a family provision claim. Family provision claims must be made within 12 months of the death of your loved one and can only be made by ‘eligible persons’. This includes current or former […]

Sep 112017
 

Agreeing to be executor of an estate means accepting obligations to the tax office. As the executor, you are answerable to the taxpayer for all of the estate's income and take over the deceased’s responsibilities for launching tax returns. Until the estate’s assets and income have been fully distributed, you will have to work out […]

Sep 082017
 

Who pays land tax? If you own, or jointly own, any property in NSW that is not your principal place of residence (your home) and the total taxable value of your land exceeds the land tax threshold, then you may need to pay land tax. How is land tax calculated? If your total land value […]