by Katrina Brown | Mar 18, 2013 | Estate Administration and Litigation, Succession Law
Simply put, Probate is the proving of a Will and in the process of “proving” the Will an “executor” or “executors” are appointed to act as representatives for the Estate of the deceased person. In Queensland, probate is issued by the Supreme Court.
When do you apply for probate?
Probate is usually required in Estates with assets held by financial institutions and/or in shares. Some Estates can be administered where the assets of the Estate do not require a Court Appointed Executor (such as furniture and vehicles), but banks, share registries and some land title offices require Probate before the Exector is permitted to deal with the Estate assets.
If the “Estate assets” are jointly held or of a superannuation death benefit type, the “Estate” may not require Probate, as jointly held assets and superannuation death benefits are disposed of without reference to a “Will” in usual course. Jointly held assets pass to the survivor of the title holders, and superannuation death benefits can be distributed at the discretion of the Superannuation Trustee (which is not your Executor).
Who applies for Probate?
The nominated Executor(s) can apply to the Supreme Court for a “Grant of Probate”. The lodgment protocol relative to proofs and publication are specific. An error at any stage can result in a costly rectification of the entire process.
How to apply for Probate?
The Courts have specific procedures that must be followed when applying for probate:
- The first step is to advertise the Application in the Queensland Law Reporter and the Public Notices section of the local daily newspaper in the area the deceased lived. You must also forward a copy of the advertisement to the Office of the Public Trustee.
- The next step following advertisement, is to lodge the Application. If a claim is made against the Estate following advertisement, the Estate will be subject to a “Caveat”, pending the resolution of the claim; and
- Your Application must attach: Original Will, Application for Probate, Affidavit of Publication and Service including copies of the advertisements, Affidavit Supporting Probate Application, and the original Death Certificate.
If the Estate is based on a “DIY” Will Kit, or handwritten by a party, additional compliance is usually required, such as further affidavits. Such “home made wills” are often subject to Requisitions, requiring further works for proving.
There are many aspects of the Application process which may be complicated due to extraneous factors, such as excluded beneficiaries, inappropriate or failed provisions and/or deceased beneficiaries.
The Nautilus Estate Team offers probate and administration services in Queensland and New South Wales. If have an issue outside of this jurisdiction, we may be able to assist with providing a referral to practitioners in the other Australian States. Further, our Practice Director, is a former United States Lawyer with experience in Estate Planning and Distribution in foreign jurisdictions.
We work on fixed fees for Probate, and hourly rates for Administration. We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
Submitted by: Katrina E. Brown BA JD ATIA TEP SSA
by Katrina Brown | Mar 6, 2013 | Estate Litigation, Powers of Attorney and Estate Planning, Succession Law, Wills
Leaving an inheritance: I don’t want to give my child anything…. is that okay? The answer, generally, is no. However, there are many strategies which can be implemented today which can significantly limit the opportunity for your child to receive anything from you.
Clients ask us this question when they have one child who is successful, whereas the other siblings may have substantially less. Other times where this question arises is where one child has been particularly difficult or distant, and the parents have lost contact or do not wish to be leaving an inheritance to the child for their inappropriate conduct. We have also seen this question arise in circumstances where a child has children of their own which they do not support, and our clients (being the grandparents) want their estate to pass to the benefit of their grandchildren.
Setting aside the reason for this decision, there are practical solutions – albeit the solutions may not flow directly from your Will.
For example, did you realise that superannuation does not pass as an estate asset? When you die, your superannuation is not disposed of by your Will. Most people do not realise this. The Superannuation Fund Trustee decides who receives your superannuation benefits. Some commercial funds, and all self-managed funds, allow you (as the member) to “bind” the Trustee to pay the benefits in a certain manner, but this manner must still comply with the terms of the Superannuation Legislation. Generally, the superannuation must pass to a spouse, child, dependent or your estate. There are, therefore, strategies which can be implemented to circumvent your estate.
Another possible solution is the foundation of a Discretionary Trust to hold your assets. Essentially, you “gift” your assets to a Trust, and when you pass away the assets do not belong to your estate. They are disposed of within the terms of the Discretionary Trust. You can nominate your successor to manage the Trust (referred to as a Trustee and/or Appointor) – and that person (or persons) then determines how the assets are distributed.
Another option, which carries a cost which may be a disincentive to many, is to create “joint tenancy” over property with the preferred beneficiaries – which means that the property passes automatically to the survivor(s) on your passing. This is definitely not one of my preferred options, but it is an option.
There are many other possibilities, and each circumstance is different. Therefore, we welcome you to contact the office to discuss the possibilities available to you and your family to reach your estate planning objectives, including, but not limited to, withholding provision to any one or more of your family members.
We welcome you to contact our team on (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.
Submitted by: Katrina E. Brown BA JD ATIA TEP SSA
by Katrina Brown | Feb 11, 2013 | Nautilus Law, Powers of Attorney and Estate Planning, Succession Law
Have you thought much of your superannuation? If you are young, and you have never seen an Estate Planning Lawyer – count yourself a member of a very large majority. The most common comments we hear are:
- “I’m only young, I will worry about it later.”
- ‘I’m not sick or dying, why do I need to do anything?”
- “I have nothing of value, no house or money, why do I need to see a lawyer?”
People forget they have one asset that can be of significant value – superannuation. Equally important, they do not consider the devastation they will cause to their family, if they die without leaving directions for their family.
Proper Estate Planning is not only for the elderly or wealthy. Clients often believe that if they do not have real estate, or significant savings or investments, that they do not have anything of value to be distributed in their Estate – but they forget their superannuation has a value, and often times has an attached life insurance benefit.
If you have worked during your lifetime, you will have accumulated superannuation. This is a valuable asset which must be distributed upon your passing. Many superannuation funds also provide life insurance to their members. If your superannuation has life insurance, the Superannuation Trustee may pay the death benefits to your nominated beneficiaries (which may include your spouse, children or dependents or your Estate). Often times, the Superannuation Trustee pays directly to your Estate. Remember, unless the Superannuation Trustee determines it to be so – your superannuation does not form part of your estate.
One of our primary recommendations when consideration superannuation planning, is to ensure that our clients have a nominated “binding death nomination” made on their fund – which requires the Superannuation Trustee to pay death benefits to only those intended by our client. Some superannuation funds do not permit “binding death nominations”, and for those funds we consider a “non-binding nomination.” In our experience, families who are left to deal with superannuation trustees where no nomination has been made, battle with guilt and grief, and the perception that they are “caring only about the money.” By simply making the nomination, the family can rely on this showing as a sign of our client’s actual intentions.
As a paralegal in the Estate Team, I have witnessed the nightmare that parents and families go through when they have to deal with the unforseen death of their child and loved one.
I have worked on a number of similar files over the last year, involving the death of young adults with separated parent. One of the files involved a young adult who passed away with a large superannuation insurance death benefit. His mother and father divorced when the child was young. The father was absent from the child’s life and provided little to no financial support to the mother, and did not seek to maintain a relationship with the child. The mother, however, provided extensive support and encouragement for the child through his adult life, often to her own financial detriment, and was a present and influential presence in the child’s life. The child unexpectedly passed away leaving a substantial amount of superannuation. The mother was tortured in having to prepare sworn statements about the child’s history, which could have readily been avoided if the child had merely nominated her as his binding death nominee. In the end, the funds were paid to the mother, but not without significant personal devastation.
If the Superannuation Trustee had nominated to pay the funds to the child’s Estate, because he had no Will, the family would have had to apply for probate and the rules of intestacy would have applied, being that the benefit would have been paid 50% to the child’s mother and 50% to the child’s father. We expect, knowing the history, that the child would have not been agreeable to this.
However, if he had left a Will, at least he would have avoided intestacy, and could have directed the entire benefit to his mother. Fortunately, it did not have to go through this process, because we prevailed at winning the distribution at the Superannuation Trustee level.
Further, the value of leaving your direction, even in a Simple Will, cannot be overstated in terms of helping families overcome the loss and devastation of your passing.
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
by Katrina Brown | Feb 3, 2013 | Wills
Nautilus Law Group stands beside families through life’s most difficult processes and challenges. The one consistent heartbreak most duly noted by our team is the anguish suffered as a result of ongoing family disputes.
Please, make amends. Life is finite. When you least expect it, your loved one may be gone.
It is never too late to open the line of communications. It is never too late to say, “I’m sorry.” It is never too late to just let the past be the past, and to create a new future. Sometimes, when we consider the position of others, we can begin to understand their position.
It is too late to make amends when your loved one is gone. So pick up the phone, write a letter, email or do whatever is necessary, to make amends. Don’t let the last words you share with someone be words of anger, for you may regret this when it is too late to take them back.
Submitted by:
by Katrina Brown | Feb 3, 2013 | Estate Administration and Litigation, Succession Law
Estate challenges are becoming more common than ever, with all members of the family seeking a share of a deceased family member’s estate. Wives, children, stepchildren, siblings, de facto partners, ex-wives are fighting viciously for what they feel they deserve. Nautilus Law Group strives to provide peace of mind to our clients to avoid the financial and emotional costs of extensive litigation.
It’s my money – I’ll do what I want with it!
When discussing the obligations of provision with clients, the most common question we are asked is ‘why can’t I give my money to whoever I want?’ Freedom to dispose of property as you wish in your estate seems to be a fundamental right, and clients are often shocked when they become aware of the fact that there are strict limitations on this right.
The law must draw a fine line between ensuring that these rights remain upheld, and introducing limitations to protect those that need protection. It is a balancing act – ensuring there is proper provision for the support of people that require such support, and the freedom to deal with your property as you see fit.
Succession Act
In Queensland, the relevant legislation relating to the governance of this balance is the Succession Act 1981 (Qld). Section 41 of this Act provides as follows:
“41 Estate of deceased person liable for maintenance
(1) If any person (the deceased person) dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person’s spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant.”
In sum, this section provides that if a person dies and does not make adequate provision for the support and maintenance of one of the following classes of people:
· a spouse;
· a child; or
· a dependant;
then the court may order that further provision be made for the person who is a part of such class. This section applies regardless of whether you have drafted a Will and clearly outlined your intentions in relation to disposition of your assets.
What is a spouse?
A spouse is relatively easy to define, and encompasses someone who is a husband or wife, a de facto partner, or a ‘registered partner’.
A de facto relationship is established where two people are ‘living together as a couple on a genuine domestic basis’. The court takes into account a number of factors when determining whether a de facto relationship exists. These factors can include:
· the length of the relationship;
· whether there exists financial dependence or interdependence between the parties;
· whether the relationship is publicly known or is made public;
· how property is owned and used, and assets managed; and
· whether there is a mutual commitment to sharing a life together, including providing care and support to each other.
In order for a de facto partner to be considered the spouse of a deceased person at the time of the death, the person had to have been residing with the deceased on a ‘genuine domestic basis’ for at least 2 years continuously prior to the deceased’s death.
A registered partner is a member of a registered relationship, being a legally recognised relationship regardless of the sex of the parties.
What is a child?
For the purposes of the Succession Act, a child includes stepchildren and adopted children of the deceased.
What is a dependant?
Perhaps the most important to define is the concept of ‘dependant’. As per the Succession Act:
“dependant means, in relation to a deceased person, any person who was being wholly or substantially maintained or supported (otherwise than for full valuable consideration) by that deceased person at the time of the person’s death being—
(a) a parent of that deceased person; or
(b) the parent of a surviving child under the age of 18 years of that deceased person; or
(c) a person under the age of 18 years.”
This definition essentially means that any person who relied on the deceased person for support or maintenance, whether entirely or only partially, is entitled to make a claim for provision against the estate.
What does this mean?
The number of classes of people who may be eligible to make a claim against an estate makes it important to carefully consider who may be eligible to make such a claim, and whether they have been adequately provided for in the Will.
A common scenario
We have a number of clients who, for whatever reason, wish to leave a greater share of their estate to one of their children. In most cases, this is simply because one child has made sacrifices for the care of the Willmaker, while the other child has lead a relatively independent life. The greater share is not intended to demonstrate a greater love for one child, but simply to provide compensation for the sacrifices given by that child.
Simply dividing an estate this way is insufficient for the purposes of protection of assets within an estate. An unequal split between children will, in many circumstances, result in a challenge to the estate when it is being administered.
Whether a claim against an estate is valid or not, the estate is still required to respond to such challenge. Solicitors are retained in order to defend such action, and potentially take the matter to court if required. Such action incurs legal fees which can cause an estate to dwindle rapidly. Thousands of dollars can be spent responding to a claim against an estate, and this form of litigation can go on for years. In addition to the costs, estate litigation is emotionally draining on families and can often cause irreparable damage to relationships.
How can Nautilus help me?
Nautilus Law Group prefers to see your money go where you intend it to go. Nautilus would prefer to see your assets in your estate distributed to your family instead of lining the pockets of an estate lawyer.
Nautilus provides our clients with peace of mind – we work with our clients to establish strategies to avoid estate challenges. We aim to arrange disposition of your assets in a way that is in line with your wishes, while also mitigating the risks that may cause conflict between family members.
Nautilus strongly advocates the preventative approach to legal issues, doing our best where possible to prevent situations of conflict arising. If you have a complex family situation, we encourage you to speak to us to ensure that your assets within your estate are protected.
Please feel free to contact our office on (07) 5574 3560 for more information.
by Katrina Brown | Feb 1, 2013 | Estate Litigation, Succession Law, Wills
There is nothing wrong with ruling from the grave! But, without an undertaker – your plans may be buried with you!
Are you scratching your head, wondering what in the heck I am trying to say? Probably – so let me tell you what I am talking about. Our clients have authorised us to discuss this case, so no confidentiality has been violated in the publishing of this article…here it goes…
Mr Smith (he’s always our favourite when it comes to grave stories) was a wealthy man, with his own ideas on investing money, family and friend relationships, and who could be trusted. Lawyers, not unexpectedly, was not high on that list! Mr Smith, bless his heart, loved looking the top of his game – and so employed a number of advisors, to do important things…he just did not tell the various advisors he had others, and he did not share with one advisor what he was doing with another. Mr Smith, being the important person he was, hired a typist from time to time to record his directions for his various estate matters.
I do not know at this stage he decided lawyers were not to be trusted, but he had purchased a Family Trust Deed in the mid-1990’s from one Law Firm, had it varied by another Law Firm later in the 1990’s and then lodged it with yet another office in the mid 2000’s. He had his first Will drawn in mid the mid 1990’s. It would appear that in the mid-2000s Mr Smith was advised of the benefits of tax planning through the use of “bucket companies” and so opened a company. Now, Mr Smith was later in his life, and whilst I am told he had capacity, he certainly had a difficulty understanding what assets he had and where, which was evident especially in the last two decades of his life.
To help this illustrate, we will call Mr Smith’s Family Trust – the Smith Family Trust. We will call Mr Smith’s Company – Smith Company. Unfortunately, Mr Smith could not keep these names straight, and he certainly did not take advice on how these vehicles worked because by the time of his death, he had “Directions” to the Executors of his Estate with incredible and bizarre stipulations.
Now, Mr Smith owned his waterfront home in his own name. He also owned all the shares in Smith Company. He was the “Apppointor” of the Smith Family Trust (see our Article Page on the discussion of Family Trusts and the use of Appointors). Within the Smith Family Trust, he had approximately $2M in mixed currencies. There was a small parcel of shares in the Family Trust as well. Smith Company’s only asset was unpaid loan accounts due from Smith Family Trust.
Mr Smith left a Will appointing a government department to act as the Executor of his Estate and directed his Executor to:
1. Transfer his home to “Smith Company Trust” – no such entity exists;
2. Required that his home be held for over 40 years, with stipulations such as the type of paint that could be used on the walls and a complete restriction on the keeping of animals or hanging of pictures, a demand that the home be occupied at all times – and other useful requirements (yes, I am being sarcastic – as none of his beneficiaries actually want to reside on the Gold Coast);
3. Demanded that all money in the Estate (and presumably in the Trust) be invested in New Zealand currency or Australian Currency, with newspaper clippings of when the currency exchanges could best be achieved; and
4. Provided strict limitations on the types of distributions possible from the Estate and Trust (such as no capital for over 40 years!).
Mr Smith, just to be thorough, over the years had written a number of “Directions” to the Executors and/or Trustees of the Smith Company Trust (remember, it doesn’t exist – it is the Smith Company or Smith Family Trust…so go figure, which was he referring to?!). In the last valid Deed, he completely rewrote the entire Smith Family Trust…permitting only five beneficiaries of the Trust. The the following years, however, he distributed income from the Trust to Smith Company – even though the Smith Company was not a beneficiary as a result of his Deed. (Quite a problem when he did not inform the various accountants, that another of the accountants had varied his Deed, whilst another created a new beneficiary to distribute funds to.) Then, the fun really started, because he strated to write “Directions” appointing different people to do different things after his death – but again, with no communication – who knows what was a wish and what was a proper direction by Deed. Without boring you, it turned into a mess.
The only thing that was consistent between his last valid Will and the last valid Deed, was that he had nominated his sole child and the child’s children as equal beneficiaries of his Will and Trust.
Now, for whatever reason, his list of nominees to work on the Will and Trust remained a long list in his planning. Over the year following his death, and over $125,000 in legal costs (charged by the Executor and the various people competing to have control over the structures — IMPORTANTLY, none of which were the beneficiaries who had been left out by Mr Smith in terms having any control, even though they were the beneficiaries) – the Court found in favour of our clients and passed the Estate and Trust over to the beneficiaries to with as they wish. So how were these costs incurred, well the Executors contacted the various accountants and house keeper nominated by Mr Smith and asked if they wanted to act, then the Executors engaged in a costly (and unnecessary, benefitting only themselves) investigation of what they should do to “help” these four beneficiaries – whilst refusing to relinquish control to the four beneficiaries and/or make any distributions to the four beneficiaries.
Do you want to know the funniest part of this story (if there is one)…Mr Smith’s neighbor, oddly enough, is a client of mine. On the eve of the hearing in this case, it dawned on me, that my client had told me about Mr Smith a few years earlier and had told him to come see me – but he had told her he didn’t trust lawyers, and never came. Had he come, I would have fixed his Estate and Trust and ensured the total wastage of over $125,000 by the Executor and their merry crew of advisors would not have resulted, but instead of a proper estate plan, with legal tax planning and asset structuring protocols would have been implemented.
So, what’s the lesson here – well, to go through them all, I need a few more Articles posts! However, to be brief – DON’T WRITE YOUR OWN LEGAL DOCUMENTS!!!!!! Okay, let’s say you have an estate of a few thousand dollars – go ahead, write your own, you aren’t losing much. But if you have an estate larger than $100,000 or if you have minor children – GET YOURSELF AN UNDERTAKER who can write a proper Will and help you actually achieve what you wanted from the outset. If you want to rule from the grave, and I fully support the idea, do it with designs that won’t have you rolling over in your grave!
