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It’s another new financial year – does your Will need reviewing or updating?

Having a Will that is up to date and legally valid is always important to avoid an Estate becoming subject to the new intestacy provisions, to avoid potential problems that can be costly to the estate following your death and to protect against future claims against your Estate.

Often Wills are made when we purchase our first property and are not reviewed for many years or until a certain “trigger event” occurs making us realise that we need to make certain changes to our testamentary documents.

We can help you by reviewing, and if necessary, updating your Will or Testamentary Trust.

Different structures in Wills suit different family wealth structures. The type of Will that is recommended will depend upon what assets will flow into your estate and what you, as a Will maker are trying to achieve such as setting up asset capital protection in your estate, beneficiary protection or tax minimisation structures for beneficiaries.

We recommend that everyone should regularly review all of their estate planning documents just like a health check:

  1. Every two to three years or if your financial circumstances change.
  2. If a nominated beneficiary dies.
  3. If a nominated Executor dies or become unfit to act due to failing health.
  4. If assets no longer exist that have been specifically gifted under a previous Will.
  5. If you are experiencing a marriage separation or contemplating a new marriage (remembering that Wills are revoked by marriage)
  6. If you have made loans to children or assets have been purchased for certain children during your lifetime which may need to be equalised through a Will to ensure equality.
  7. If you need asset protection advice for children with a disability (mental or physical), requiring the protection of capital in an Estate: or
  8. If you have any queries or concerns about your current Will.

If you would like to have your Will reviewed or you need to make any changes to your existing Will, please contact us to arrange an obligation free call with one of our Estate Planning Lawyers.

Powers of Attorney for Estate Planning

A Power of Attorney is a legal document appointing one or more people to manage your financial, personal or medical matters during your lifetime. These documents are powerful tools in Estate planning and are critical if you ever lose capacity and cannot manage your own affairs through illness or injury.

You need to consider that if you lose mental capacity through either an accident or through illness, who would be legally be able to make legal, financial and health decisions on your behalf. The documents can also be put in place for a certain timeframe (for example if you are overseas).

There are currently two types of Powers of Attorney available in Victoria namely: –

  1. Enduring Financial Power of Attorney: and
  2. Supportive Power of Attorney

We also prepare Appointment of Medical Treatment Decision Maker documents and advanced Health Care Directives which is are legal documents setting out your preferences for any medical treatment in the future

When drawing Powers of Attorney in we advise upon:

  1. The proper selection of attorneys and alternate attorneys for personal, financial and medical matters
  2. Attorney Succession (the appointment of alternate or joint attorneys): and
  3. Any directions to be given to attorneys to avoid conflicts in the future

We recommend that everyone should regularly review all of their estate planning documents just like a health check. Power of attorney documents should be reviewed to ensure that the appointed attorney is a person who still has the capacity to run your financial, personal or medical matters and who would be diligent in dealing with your affairs if you were to lose capacity.

What happens if you die without leaving a Will? The new Intestacy Laws in Victoria

If you die without leaving a valid Will your Estate will more than likely come under the new Intestacy provisions in Victoria. Intestacy places a large responsibility on your surviving family as they will need to rely upon a legislative formula that guides how your Estate will be distributed. This will mean that you have no control over who distributes your estate and whether your Estate will be distributed according to your intentions.

This means that a family member will need to apply to the Supreme Court for Letters of Administration and this may result in your estate being distributed in a way that you had not intended. In turn, disputes may arise within your remaining family which can result in unnecessary and expensive litigation.

On 1 November, 2017 significant new laws came into effect in Victoria affecting intestate estates through the commencement of the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017.

It is important that you are aware of these changes and the options that they create for you. The majority of the changes affecting the Intestacy provisions will only affect anyone who dies after the amending Act and include:

  1. Where the intestate leaves a partner and no children that belong to the intestate and the partner – the partner receives the whole estate.
  2. Where the intestate leaves a partner and there are children that belong to the intestate and the partner – the partner receives the whole estate (this is a significant change).
  3. Where the intestate leaves a partner and there are children that belong to the intestate but not the partner, then the partner will receive a defined amount (a partner’s statutory legacy which is indexed each year), the personal chattels, interest on the partner’s statutory legacy and half of the balance of the deceased estate. The remaining half of the balance of the estate will be divided equally between the children.
  4. If there is more than one partner the estate must be dealt with in accordance with a complex statutory formula.
  5. If there are no partners and only children then the Estate passes to the children, however there is an additional formula to be applied if one of your children has predeceased you.
  6. If there is no surviving partner or any surviving children, the hierarchy of distribution is in accordance with the statutory “line” of remaining family members.

Having a current valid Will is always important to avoid your Estate becoming subject to the new intestacy provisions. We can help you by reviewing or updating your Will and recommend that you should review your Will:

  1. Every two to three years or if your financial circumstances should change;
  2. If a nominated beneficiary dies;
  3. If your nominated Executor dies or become unfit to act due to failing health;
  4. If you separate from your partner or re-marry: or
  5. If you have any queries or concerns about your current Will.

How is an inheritance treated at separation?

A common question in a family law dispute is whether an inheritance received by one party will be excluded from the property pool to be divided between the parties. To understand how the courts are likely to treat inheritances, previous cases provide guidance on what may happen.

When there is a question on inheritances, a relevant factor is whether the inheritance was received during the relationship or late in the relationship, possibly even post-separation.

Inheritance Received During Relationship

An inheritance is ordinarily seen as a financial contribution to be attributed to the party who received it. It is not protected or excluded from the pool merely for being an inheritance.

Additional weight may be given to the contributions of the party who received the inheritance if the capital received significantly aided the parties in acquiring their current assets. This “springboard factor” was relevant in H v H (1981) FLC 91-083, where the Husband inherited capital and applied a portion of his inheritance to purchase the matrimonial home and build extensions. The home could not have been purchased without the inheritance.

In the matter of Kessey v Kessey (1994) FLC 92-495 it was held that absent evidence which establishes the donor’s intention to benefit both parties, a contribution by a parent to the property of the marriage will be taken to be a contribution made by that party.

Express evidence is required to illustrate an intention to benefit both parties and without such evidence the Court has found that gifts and inheritances are made for the benefit of the recipient due to the personal relationship between the donor and recipient (Essex v Essex (No 2) [2007] FamCA 639).

Therefore while an early inheritance will likely form part of the property pool, the recipient of the inheritance will be acknowledged to have contributed the funds and an adjustment can be made in their favour.

Inheritance Received Late in Relationship or Post-Separation

When an inheritance is received by a party during the late stages of a relationship or post-separation there is little possibility for the other spouse to have contributed to the inheritance received. Therefore the Court may take a two-pool approach and treat the inheritance separately.

This was endorsed in Bonnici v Bonnici [1992] FLC 92-272 which dealt with a 21 year relationship where the Husband received an inheritance two and a half years prior to separation and a second inheritance one year prior to separation. The Full Court stated that the inheritance was part of the property pool to be divided. However, the Court also decided that if there are sufficient funds in the property pool to reach a just and equitable settlement, then an inheritance received late in a relationship could be treated as an entitlement of the recipient. The Court in Bonnici held that the inheritance monies received by the Husband were not to be taken into account as part as the Wife had made no contribution to the receipt of those monies.

The Courts will always have the discretion on how to treat an inheritance and may still use a global property pool. In the recent decision of Calvin v McTier [2017] FamCAFC 125 the Husband received a large inheritance 4 years post-separation. At the time of the trial the inheritance made up 32% of the parties’ assets. Therefore the trial magistrate included the inheritance in the asset pool and found the Husband’s contributions to be 75%. Based on the future needs of the Wife, he then made a 10% adjustment to her so that she received 35% of the total asset pools, including the inheritance.

The Full Court confirmed the trial magistrate’s decision and held that the treatment of “after-acquired property” could have been dealt with in a global pool with the proper weight given to the Husband in recognition of his contribution or it could have been dealt with separately with acknowledgement that the Husband had a separate financial resource to draw on.

Inheritances and other gifts or winnings will be taken into account by the Family Court during family law proceedings. It may be part of a global pool or a two-pool approach may be taken. The weight the Court will give to “windfalls” such as these depends on:

  • Was the inheritance received during the relationship or post-separation?
  • Was the inheritance intended to benefit both parties or only the recipient?
  • Does the inheritance form a major percentage of the property pool?
  • What were the contributions made during the relationship?
  • What are the future needs of each party?

If you have received, or may receive, an inheritance it is important to get Family Law advice based on your specific circumstances in order to protect your assets.

 

For further information on this topic, please contact our Family Law department on 03 9614 5122

Property Law

The area of real estate transactions in Victoria has experienced nothing short of a revolution since both the State Revenue and the Land Title’s Office push to 100% digital conveyancing. Pearce Webster Dugdales is proud to be one of the first few firms that have been on board this revolutionary train since digital conveyancing was introduced in Victoria. Our property team is well equipped and trained in e-conveyancing including the use of the State Revenue digital platform and PEXA and cyber-security practice and procedures.

All our conveyancing matters are supervised by experience property lawyers who are abreast with all changes in property law.

Merger – Tolhurst Druce & Emmerson with Pearce Webster Dugdales

The Partners of Tolhurst Druce & Emmerson and Pearce Webster Dugdales are delighted to announce that the two firms have merged effective as and from Monday 3 April 2017.

The merged firm will operate under the business name Pearce Webster Dugdales (incorporating the Practice of Tolhurst Druce & Emmerson) and will primarily operate from premises situated at Level 4, 379 Collins Street, Melbourne.

The hours of operation are Monday to Friday from 8.30 am to 5.30 pm.

The main contact details for the Melbourne office of Pearce Webster Dugdales are as follows:-

• Telephone 03 9614 5122
• Facsimile 03 9614 29654
• Email info@pearcewebster.com.au
• Website www.pearcewebster.com.au

In addition we offer services at our Branch Office at Riddells Creek:

Telephone: 03 5428 6507
Address: Yeaman House, 5A Station Street, Riddells Creek. 3431
Postal: PO Box 110, Riddells Creek. Victoria. 3431
Office Hours: Tuesdays 9.00 am -5.00 pm and weekends by appointment.

Please note that all calls,mail and emails sent to Tolhurst Druce & Emmerson will automatically be diverted and or redirected to Pearce Webster Dugdales.

Pearce Webster Dugdales and Tolhurst Druce & Emmerson are both firms of long standing with Peace Webster Dugdales having been established in 1899.

The two firms share similar cultures and values and Pearce Webster Dugdales seeks to continue to provide you with quality legal advice and to service your legal needs as and when they arise from time to time.

Pearce Webster Dugdales’s is committed to proffering Tolhurst Druce & Emmerson clients, (past and present) whether individuals, families or businesses, the same level of legal assistance and support as was formerly the case.

Drisha Natarajan joins Pearce Webster Dugdales

We welcome Drisha Natarajan to the firm. Drisha is an experienced Property & Commercial solicitor. Drisha was admitted to practice is 2007 after completing her Bachelor of Laws, with Honours, at University of London in the UK in 2004.

Drisha has a broad range of experience in property, leasing and commercial. Property law work involves all aspects of domestic and commercial conveyancing, sub-divisional developments including off the plan sales and purchase, and body corporate advice and joint venture agreements.

Sound knowledge of commercial and retail property leasing matters and the Retail Leases Act 2003 (Vic), including negotiation and preparation of leasing documents with particular attention to individual client requirements and all statutory regulations.

She also acts for vendors and purchasers of all types of business including the preparation of commercial and franchising documentation and investigation of all legislative requirements for certification and suitability.

Where there’s a Will – by David Sonenberg

David Sonenberg, our LIV Accredited Specialist in Wills and Estate, has just published an article in the Law Institute Journal concerning a recent Court of Appeal decision that found suspicious circumstances arose so as to cast doubt on the Will maker’s approval of his will. The case is VEALL v ANOR & VEALL. This case highlights the important role solicitors play in creating valid wills for elderly or infirm clients. This can be a very difficult process and we encourage clients to contact us if an elderly or infirm person wants to make a will.

View the article here: http://www.liv.asn.au/Practice-Resources/Law-Institute-Journal/Archived-Issues/LIJ-Jan-Feb-2016/Where-there-s-a-will