Document 6442404

Estate Planning Tasmania News
Issue 23
March 2011
Will Tips
In this Issue
• Ensure that your Will is kept
•
Estate Planning for Blended Families
•
Presumed Consent and Organ Donation
•
Our Regular Features
safely and that a person you trust
is aware of where it can be
found. This will ensure that after
your death there are limited
delays and that any wishes you
had that need to be carried out
immediately can be. Peter
Worrall Lawyers can arrange the
safe custody of your Will.
Estate Planning for Blended Families
Over a third of Australian marriages end in divorce. As a consequence of
this there are a large number of blended families, and the traditional
‘nuclear’ family of two married parents and their children is becoming
increasingly rare. A blended family exists where the parties to a
relationship have been involved in previous long-term relationships or
marriages, and there is a child or children of more than one relationship.
Where there is a blended family, there is increased complexity from an estate planning
perspective. There are more relationships within a blended family that the estate plan
must cope with and there will be different circumstances to a nuclear family that must
be taken into consideration.
The Consequences of a Member of a Blended Family Dying Without a Will
Intestacy is where someone dies without a Will. In Tasmania, if a person dies after
1 January 2011 without having made a Will, the Intestacy Act 2010 (Tasmania)
provides for the relevant statutory provisions of how the estate is to be divided:
• unless there are children of the intestate who are not also children of the surviving
spouse, the surviving spouse is entitled to the whole of the estate;
• where there are children from another relationship, the surviving spouse is entitled
to a statutory legacy of $350,000, the intestate’s personal property, and half of any
residue of the estate. The remaining half of any residue is to be divided between
all the intestate’s children;
• if there is more than one surviving spouse (for example if the deceased had
separated from their husband or wife, and is now involved in a de facto
relationship) and the deceased had no children who are not also children of the
surviving spouses, each spouse is entitled to a share in the estate;
• if there is more than one surviving spouse and children of the intestate who are
not also children of the surviving spouses, each spouse is entitled to a statutory
legacy (proportionally if there are insufficient funds) and a share of half the
residue, if any. All children will share equally in the remaining half of the residue
(if any).
(continued page 2)
Recent/Pending
Legislation & Cases
The Intestacy Act 2010 (Tasmania) has
rescinded Rule 3A of the Probate Rules
1936 (Tasmania), removing the definition of “partner”, introduced a new
Rule 22 to provide for the order of
priority of right to a grant where there is
no Will, and included the definition of
“spouse” in new Rule 22.
Our Firm News
• Peter Worrall Lawyers has expanded
•
•
to the ground floor of our building at
133 Macquarie Street, and now
occupies all four floors. Our new
reception area is located on the
ground floor, making access for
clients with limited mobility much
easier.
Peter Worrall presented a paper at
the Lexis Nexis 9th Wills and Estate
Conference in Melbourne about
controlling testamentary trusts on
16 March, and at the TEN CPD
Essentials – Wills & Estates Law
Conference on
18 March.
Kate Hanslow recently presented to
the Down Syndrome Association
Family Camp about estate planning
for families who have a child with
special needs.
Asked and Answered:
Q.
A.
How does a family know where a Will is held when someone dies?
Unlike registered Powers of Attorney, there is no registration of Wills in Tasmania. This means that it
is up to a family to make enquiries on a person’s death about the location of any Wills. Usually this is Kate Hanslow
a matter of reviewing the deceased’s files for copies of Wills, and trying to locate past correspondence
received from law firms or trustee institutions, as this can help narrow the search. It is the practice of our firm, and
most others, to search death notices in the local newspaper, and attempt to contact the Executors about Wills that are
held. But this is not 100% successful because Executor’s contact details can be hard to locate, and sometimes there is
no death notice in the newspaper. For this reason, we recommend that you tell your Executors about the location of
your Will to make this process less difficult and stressful for your family.
© Peter Worrall Lawyers
Page 1
Estate Planning Tasmania News
Issue 23 March 2011
Glossary
Estate Planning for Blended Families (continued)
Stepchildren
Tenants in Common
A stepchild is not entitled to a share of their stepparent’s estate when their
stepparent dies without a Will. A stepchild is only entitled to a share in their
stepparent’s estate when they have been adopted.
A form of ownership. If you own property as a
Tenant in Common it may be that you own an
equal share with the other owner/s or you may
own an unequal share. On your death your
share is a Willable Asset, it does not go by
survivorship to the other owner/s.
It is noted that under Tasmanian family provision law stepchildren are
considered children but only when their natural parent is still alive and in a
relationship with the stepparent. Stepchildren may be able to challenge a
Will under this legislation.
Providing for Children from Multiple Relationships
Separation and subsequent relationships can sometimes create resentment
and anger within families, because of the prospect of family assets going to
the new blended family rather than the children of the original relationship.
An effective estate plan, and properly drawn documents based on that plan,
can assist in ensuring that the deceased’s children are treated appropriately.
Doing this well will lower the risk of litigation, causing further bitterness
within the family and a loss of good relationships.
Testament
An older expression less commonly used today,
which refers to the written intentions of a person
about how they wish to have their personal
property distributed after their death. The
expression “Last Will and Testament” means
nothing more than “Last Will”.
Testamentary Discretionary Trust
The establishment of a properly worded trust in a Will is one of the ways of
providing a solution to the problem. This can assist in ensuring that one
beneficiary, or set of beneficiaries (for example the children from the first
marriage of a person) receive an appropriate part of the estate.
A Testamentary Trust that gives powers to a
Trustee in the form of discretions about when,
how and to whom to pay capital or income of the
Trust to a Beneficiary.
How can you Provide for the Varying Circumstances of Individual
Beneficiaries?
Testamentary Trust
A capital protected trust can allow for income to be paid to beneficiaries,
while holding the capital assets of the trust, which can then be allocated to
another class of beneficiaries. These are beneficial for blended families as
they can be adjusted to meet the circumstances of beneficiaries.
For example, a deceased person may have children of their first marriage who
are established in life, and younger children from their subsequent marriage
who are still being educated. A capital protected trust can be used to
provide for the education of the younger children, and the capital can be
made available for the older children at a time specified in the trust deed, or
upon those receiving income from the trust reaching a particular milestone.
The Trustees’ Flexibility to Adapt to Circumstantial Changes
When drafting a capital protected trust, it is possible to provide discretion so
the trustees can distinguish between members of the class of beneficiaries
who are receiving income, determine their individual circumstances and
distribute income accordingly.
When a Will has a Trust in it, the Trust is called a
Testamentary Trust. These forms of trusts are
also commonly called Will Trusts.
The lighter side of Wills
Old Softy
Young man applying for reduction of bail:
Ellis S.M.: I see this applicant wants to get
married. Perhaps I should do him a favour and
refuse the application. When are you getting
married?
Applicant: As soon as possible.
Ellis S.M.: Who am I to stand in the way of
romance? Application granted.
Melbourne Magistrates Court
This flexibility is beneficial as it can allow for adjustments to be made to reflect changes in circumstances. If a beneficiary
develops a problem meaning that large payments no longer achieve the Trust’s aims (for example if he or she develop a
gambling problem), a discretion can be exercised so that income can be distributed via a more suitable form, such as through
direct payment of expenses. This emphasises the importance of choosing who is to be your trustee.
Conversely, if a Willmaker is concerned that one beneficiary, or class of beneficiaries, will draw funds disproportionately ,
dissipating it for other beneficiaries, discretion as to the amount of income can be removed, providing a fixed amount or
percentage. Effective trust drafting is essential in estate planning, and is necessary to give effect to the Willmaker’s wishes.
How to Plan for your Blended Family
This article is not intended to constitute legal advice, which needs to be tailored to your circumstances. To learn more about
how best to plan for the future of your family, make an appointment with Peter Worrall Lawyers by calling (03) 6223 8899.
Kate Moss and Patrick Cooke
© Peter Worrall Lawyers
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Estate Planning Tasmania News
Issue 23
March 2011
Presumed Consent and Organ Donation
The treatment of a person’s body during life and after death is a critical Estate Planning issue. Laws around
Australia are currently under review in this area, and it will be interesting to see if Tasmanian law follows
suit.
Organ donation has historically been something that people can elect to do, with there being no obligation on a person to
donate their organs on death. Currently in Tasmania each person can nominate to donate their organs (with varying
degrees of what organs are included in this consent), with the ultimate decision lying with the person’s family. Family
members are able to refuse the donation, even where a person is a registered organ donor. It is for this reason that we
recommend that people do the following things when establishing an Estate Plan:
•
discuss your wishes with your family to attempt to ensure that they understand your views;
•
have in place a binding and effective Instrument Appointing an Enduring Guardian nominating a person or
people who you wish to make decisions of this type;
•
give real thought to who you appoint as a Guardian – ideally with the person or people having similar views
to your own about the donation of organs on death; and
•
keep a certified copy of your Appointment of Enduring Guardian on file with your GP, and local hospital in
case of emergency.
Whilst Tasmania continues to have this “opt-in” system of organ donation, Victoria and Western Australia are currently in
the process of reviewing their laws in this area. Both States’ parliaments are debating the merits of a new “opt-out”
system for organ donation. Under this system, it will be presumed that a person wishes to donate their organs, unless
they have confirmed otherwise by registering their objection. Similar systems are currently in operation in Spain, France,
Belgium, and Sweden.
We will be keeping our readers up-to-date as these debates continue, and let you know if any similar changes are proposed
for Tasmania.
Last year there were 309 donors Australia-wide, with 931 people receiving organs.
For those wishing to donate their organs, Medicare facilitates a National Organ Donor Register. See http://
www.medicareaustralia.gov.au/public/services/aodr/register.jsp or call 1800 777 203 for more information.
References: Grant McArthur, The Herald Sun, “Parliamentary Committee to Examine Move to Automatic Organ Donation”, 14 February 2011;
Cathy O’Leary, The West Australian, “Opt-Out Organ Donor Plan under Review”, 18 February 2011.
Kate Hanslow
© Peter Worrall Lawyers
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Estate Planning Tasmania News
Issue 23
March 2011
A note from our Commercial Practice Group - What is a Company Charge and How Will
it Affect my Business?
A company charge is a form of security interest that applies only to companies. The effect of a company charge
will depend on the type or class of charge. Most charges are registered with ASIC, and can be searched on the
ASIC website.
A fixed charge is a charge over a specific asset of the business (i.e. a specific item of plant and equipment). A floating charge
covers a class of assets that are continually changing (i.e. cash at bank or stock in trade).
The charge is said to “float” over these assets, allowing the chargor company to deal with or dispose of assets in the ordinary
course of business, until a specific event causes the charge to “crystallise.” A fixed and floating charge contains both fixed and
floating elements.
A typical example of a fixed and floating charge is where a bank takes a charge over the assets of a company to secure the
company’s repayment obligations under a loan. However, a charge may be required under a number of different commercial
arrangements, and it is prudent to seek legal advice before committing to any new security obligations.
If you require any assistance in this area, please contact one of our lawyers in our Commercial Practice Group.
Maggie Keeling
Our Estate Practice Group contacts
Peter Worrall
Sam McCullough
Kate Hanslow
Kate Moss
Partner
Ph: 6223 8899
[email protected]
Senior Associate
Ph: 6223 8899
[email protected]
Senior Associate
Ph: 6223 8899
[email protected]
Lawyer
Ph: 6223 8899
[email protected]
Our Commercial Practice Group contacts
Matthew Pawson
Sarah Slade
Stephanie Alcock
Maggie Keeling
Partner
Ph: 6223 8899
[email protected]
Senior Associate
Ph: 6223 8899
[email protected]
Lawyer
Ph: 6223 8899
[email protected]
Lawyer
Lawyer
Ph: 6223 8899
Ph: 6223 8899
[email protected] [email protected]
Diana Kelsall
Further Information
Our Website:
A wealth of information in relation to estate and commercial matters can be found at our website www.pwl.com.au
Contributions: Contributions and suggestions from Estate Planning News readers are always appreciated.
Caution:
Email us at [email protected]
This newsletter contains material for general educational purposes and is not designed to be advice to any particular person in relation to their own affairs as
it does not take into account the circumstances of the reader as an individual.
It is recommended that appropriate professional advice be obtained by each
reader so that reliance can be taken upon that advice.
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