by Katrina Brown | Mar 7, 2016 | Estate Administration and Litigation, Estate Litigation, Powers of Attorney and Estate Planning, Succession Law, Wills
“If I leave someone $1 under my Will, then they can’t make a claim against my Estate”. This is a common misconception that is often encountered in the estate planning process for clients who wish to take all possible steps to ensure that a claim won’t be made against their deceased estate.
The Succession Act 1981 (Qld) provides, at Part 4, that the Court may consider an application made by a spouse, child (including stepchild or adopted child) or dependent where the deceased has not made adequate provision from the Estate for the claimant. The Court will consider factors such as:-
- The extent to which the claimant was being maintained and/or supported by the deceased;
- The need for the continuance of such maintenance and/or support; and
- The circumstances of the claimant and the Estate.
It is therefore not sufficient to leave a nominal gift for a potential beneficiary under your Will. The Court’s consideration is not based on whether you have made any provision for the beneficiary, but rather that you have made adequate provision for the beneficiary.
If you are anticipating an Estate claim following your death, you should advise your lawyer of your concerns so that all necessary steps can be undertaken in the preparation of your Will and estate planning documents. It may be appropriate to leave supporting estate planning documents setting out the circumstances under which you made your Will, and why you made provision for your beneficiaries (including, where appropriate, excluding beneficiaries).
The unfortunate reality is that there is no fail-safe method to prevent a claim against your Estate. If you have concerns about a claim against your Estate, we strongly recommend discussing your concerns with our Estate Planning team to make sure that all appropriate steps are undertaken to ensure that your Estate Planning instruments are appropriately drafted to address and possibly pre-empt a potential claim.
Our Estate Planning team can be contacted on 07 5574 3560 or via email to caitlin@nautiluslaw.com.au.
by Katrina Brown | Feb 29, 2016 | Estate Administration and Litigation, Estate Litigation, Guardianship, Powers of Attorney and Estate Planning, Succession Law, Wills
When meeting with new clients for Estate Planning matters, we often encounter some interesting myths and misconceptions about the law and processes involved with Estate Planning.
Estate Planning and administration in Queensland is governed by the Succession Act 1981. Documents drafted during estate planning can include a Will, a Power of Attorney for Finance and/or Personal/Health matters, and an Advance Health Directive (plus any other supporting documentation recommended by your lawyer).
Estate Planning can be a complex process, and the advice given to each client is individually tailored to their circumstances – the advice we give one client will often be entirely different to that given to another (as the clients may have different priorities in their Estate Plan, or the law applies to their individual circumstances in a different way).
Due to the misconception that Estate Planning is a “one size fits all” exercise, there are many myths (which often stem from tailored advice being misunderstood as general advice) which are becoming more widely known.
We are pleased to announce the launch of our “Estate Planning Myths” Series of articles on 7 March 2016, through which the lawyers of our Estate Planning team will address the truth behind some of the most common myths and misconceptions we hear.
What myths and misconceptions are you talking about?
While there are many Estate Planning myths, we will be addressing those that we most commonly hear. These include:-
- “Making a $1 gift to a person in my Will prevents them from making a claim against my Estate”
- “If I don’t make a Will, everything goes to the government”
- “What’s the point of a Will? My Estate will get eaten up by death duties anyway!”
- “I don’t have any assets, so I don’t need a Will”
- “Anyone can challenge a Will – it’s not worth the paper it’s written on”
- “I don’t need to make a Will because my spouse will automatically receive everything”
- “I made my Will years ago and nothing has changed, so I don’t need to do a new one”
- “I don’t need a Power of Attorney because my spouse can automatically act”
- “My Executor won’t get any compensation for acting as Executor”
- “My Executor has to pay for the costs of administration of my Estate”.
Have you been told something about a Will, Power of Attorney, or Estate Planning generally, that you are not sure about?
The above indicated topics are those heard most often by our lawyers – but it is not an exhaustive list of the myths that circulate.
Is there something you think we have missed and would like us to reveal the truth of? If so, please email Caitlin Bampton with your query. Alternatively, if you would prefer to submit an anonymous query of an Estate Planning myth you have heard, please click here to complete our survey, and we will address the topic in future articles.
by Katrina Brown | Dec 15, 2015 | Property Law
Transfer duty in Queensland is imposed by the Office of State Revenue on all dutiable transactions, pursuant to the Duties Act 2001.
When transactions are related, the transfer duty payable on the transactions must be aggregated; meaning that, rather than assessing the value of the transactions separately (in which case a lower rate of duty may be payable), the value of the transactions are combined and duty is assessed on the combined value of the transactions.
What are “aggregated transactions”?
There are various circumstances that must be considered in determining whether transactions are aggregated.
Firstly, it is important to make clear that the aggregation of transactions relates not only to the transfer of real property, but also to acquisition of business and other interests in Queensland.
The negotiation of the Contract, method and terms of sale must be considered. The Office of State Revenue generally holds that property purchased at auction is not subject to aggregation (as the Buyer is unable to negotiate their purchase, and cannot guarantee that they will be successful at auction). If, however, the transactions were effected by a contract or negotiation, then the offer and execution of documents occurring for both transactions on the same day can also create an aggregated transaction. Further, any terms of a Contract implying that the transactions are linked (for example, settlement of Purchase A is subject to Purchase B also settling), creates a relationship between the transactions, resulting in aggregation.
Finally, and most obviously, the combined use of the subject of the transactions will result in aggregation.
What happens if my transactions are linked, but they aren’t assessed as aggregated?
Your solicitor will rely on information provided by you in determining whether the transactions are aggregated. In order for transfer duty to be correctly assessed when payable, it is important to make sure that you disclose any relevant information to your solicitor from the outset. Failure to do so could result in incorrect assessment of your transfer duty liability, which can incur Unpaid Tax Interest until rectified.
As the circumstances in which aggregated transfer duty is payable vary from case to case, it is best to speak to your solicitor if you are considering entering into any Contract or agreement which could result in an aggregation. As transfer duty in Queensland is calculated at progressive rates, failure to take this into account before entering into a transaction could result in a high rate of transfer duty being assessed than you anticipated.
If you would like to discuss a potential aggregation with our office, please contact our office on 07 5574 3560.
by Katrina Brown | Nov 24, 2015 | Property Law
When entering into a Contract in Queensland, it is critical the Buyer’s and Seller’s names are complete, and correctly spelt. Any omissions or errors can cause significant headaches and incur significant cost further on in the conveyancing process.
The Seller is the first party listed on the Contract. The Seller’s details are the easiest to get right, as these must exactly match the title of the property (which can be discovered from a title search of the property, which your agent or solicitor can conduct before the Contract is signed). If, for some reason, you are selling the property and the entity registered on the title is incorrect (say, for example, the title is registered in the joint name of two people, one of whom is deceased), please speak to your solicitor before the Contract is signed about the Seller’s name that should be reflected on the Contract, and any special conditions that must be inserted to address the variation between the Seller’s name on the Contract, and the name registered on the title of the property.
It gets a bit trickier when inserting the name of the Buyer. If you are purchasing the property in your individual name, then your full legal name must be inserted (no nicknames, assumed names, or initials). If the purchaser is a Company, the full company name and A.C.N. of the Company must be inserted (e.g. SMITH NOMINEES PTY LTD A.C.N. 123 456 789). If you are purchasing the property as Trustee, then the full name of the Trustee and Trust must be entered (e.g. SMITH NOMINEES PTY LTD A.C.N. 123 456 789 AS TRUSTEE FOR THE SMITH FAMILY TRUST).
Firstly, if you sign a Contract that does not reflect the correct entity, leading to a change of the Contract, the Office of State Revenue may determine that any variation to the Contract to change the entity is a separate transaction, and may impose Transfer Duty on both the transfer reflected by the Contract, and the subsequent transfer to the correct Buyer. At a minimum, your solicitor will need to make additional submissions to the OSR to enable a cancellation of the incorrect Contract – and generally you will have to pay the Seller’s solicitor fees as well.
For example, Mr Bob Jones sells his property to Mr John Smith, and an unconditional Contract is executed indicating these names (and Mr Smith does not provide any instructions to his solicitor indicating that the Buyer is a company or trust) (this is Transaction One). One week before settlement, Mr Smith’s bank observes that the transfer documents do not indicate the name of the Trust purchasing the property. Further discussion with Mr Smith reveals that he did indeed intend to purchase the property as Trustee, and didn’t realise that his solicitor needed to know this. His solicitor approached the Seller’s solicitor, who agreed that the Contract could be amended to reflect the Buyer as Trustee. However, Mr Smith signed the Contract in his own right, and then (it appears) decided that the purchaser would be the Trust. As the Contract signed is immediately unconditional, the Office of State Revenue can determine that the change of Buyer from Mr Smith to Mr Smith as Trustee is a second, and separately assessable, transaction (Transaction Two). Whilst the ultimate outcome is that both transactions are effected and the property is held in the name of the intended party (i.e. Mr Smith as Trustee), the effect of such a determination by the Office of State Revenue is that the respective Buyers have to pay transfer duty on each of the transactions – meaning that Mr Smith has to pay Transfer Duty on Transaction One, and Mr Smith as Trustee has to pay Transfer Duty on Transaction Two. The double-payment of Transfer Duty would be entirely avoidable had the correct purchasing entity been inserted in the Contract from the outset. Your lawyers may be in a position to apply for a cancellation of the first contract, nullifying Transaction One in terms of duties – but the process will incur additional costs – usually including costs payable to the Seller’s solicitor and the Buyer’s solicitor.
Secondly, indicating the correct entity on the Contract from the outset creates less potential for issues to arise as the transaction progresses. An incorrectly listed entity requires amendment on the Contract, which can be made only if both parties agree. It is also important to note that, if purchasing the property as Trustee of a Trust, a certified copy of the Trust Deed (and any variations) is required to be lodged with the Transfer documents after settlement. As you may not have these easily accessible, it is best to allow sufficient time to locate these documents prior to settlement in order to avoid a last minute rush.
If you have any questions about the name that should be indicated on your Contract, please contact our office on 07 5574 3560.
by Katrina Brown | Aug 25, 2015 | Nautilus Law
Willmakers often want to set a date for which a minor or young beneficiary receives a gift from their estate. The most common is to suggest that their child receives their estate at 21 or 25 years of age. This is, however, not enforceable and the child can demand the whole of the provision at 18 years of age from the estate, unless provisions are written correctly.
In planning for minor or vulnerable beneficiaries, even a simple will (that is a will without a testamentary trust) needs to consider that a beneficiary who has entitlement to an asset (such as the residue of an estate) is entitled to take the provision upon reaching the age of minority – unless a condition prevents the vesting of the estate.
Conditions may include an obligation to survive by a certain date, with the provision that if the child does not survive until such date than an alternate beneficiary takes. Another condition may be that the child must reach a certain age and obtain a degree or level of training, with a failure of meeting such condition being sufficient to prevent the vesting of the estate (there are limitations in this regard). Alternatively, the provision can be made for the child out of a testamentary trust, with the child being one of many alternate beneficiaries until a date selected by a trustee.
We recommend that any provision to a minor or young person contain conditions. There have been many cases called to answer the rights of a person of legal age (18) calling upon the vesting of a provision from an estate. Proper legal advice can ensure your wishes are considered and upheld – with the obvious benefit being a savings of the estate until the beneficiary is of more suitable age and/or circumstances to inherit.
Nautilus Law Group’s Succession Law Team are trained in conditional planning and can assist you in achieving your wishes for your beneficiaries. We welcome you to contact Caitlin Bampton, on Caitlin@nautiluslaw.com.au or by telephoning at (07) 5574 3560, to arrange a no-obligation consultation with a member of our team.
