Category Archives: Estate planning

What is Estate Planning and Why Do I Need One?

What is estate planning?

Estate planning is more than simply making a Will. It is the process of anticipating and arranging for the management and disposal of your estate during your life and after your death.

It should provide you with peace of mind that your family will be secure if something happens to you. If well-crafted it can minimise any tax paid by your heirs and help avoid any family disputes. It should also include documents that govern how you will be cared for, medically and financially, if you become unable to make your own decisions in the future.

Every family is different and it needs consideration of all aspects to determine the best plan.

Estate planning is also vital to any financial plan. A good estate plan requires the involvement of skilled legal, accounting and financial specialists to ensure the right funds get into the right hands at the right time.

Laws change so your estate plan needs to be regularly reviewed and updated to ensure it is still achieving what you want it to achieve.

Some of the major estate planning tasks include:

✓ Understanding your assets and what can be done with them upon death
✓ Creating a Will
✓ Limiting disputes by setting up trusts for beneficiaries transferring assets now
✓ Establishing a guardian for living dependents
✓ Naming an executor of the estate to oversee the terms of the will
✓ Creating/updating beneficiaries on plans such as life insurance & superannuation
✓ Setting up funeral arrangements
✓ Setting up durable power of attorney (POA) to direct other assets and investments
✓ Placing assets outside of your estate to avoid litigation

Transferring the family farm or other businesses has never been more affordable

Recent changes to tax legislation and stamp duty rules has made now an excellent time to consider how you want to manage the family farm or business for the future. Up until now tax consequences and stamp duty have made this unviable for many families but the new rules are making a big difference. Previous rules were very strict but now there is a lot more flexibility if your farming or other business meets certain criteria.

So if you have ever discussed selling or gifting the farm or your business to family members now is the time to talk to us about the new rules.

How do I avoid my family fighting over my will?

In our modern world families no longer accept their loved ones’ decisions as set out in their will and more and more people are commencing court action against estates. The costs both financially and emotionally to families is enormous. Proper estate planning involves more than drafting a will. Considering transferring your assets to entities that are not impacted by your will, managing superannuation and debt and generally letting you know where the risks to your estate plan lie and how they can be minimised is an essential part of the estate planning process.

Managing family expectations and then setting up your assets in entities that are difficult to contest when you die is one of the many ways we can help ensure that your wishes are put in place. Traditionally some of these options were very expensive but new taxation and stamp duty provisions have made estate planning far more affordable.

I have a great estate plan in place so what else can go wrong?

It is also important to consider how your assets are dealt with if you lose the capacity to make decisions for yourself. It is amazing how often a great estate management plan can be affected by an attorney dealing with assets without considering the impact on your will. Many fail to consider these implications and a ‘standard’ or ‘kit form’ power of attorney can be as disastrous as a will kit. Worse still if you have no power of attorney the courts determine who will manage your affairs and often will appoint the Public Trustee. Can a stranger manage your assets for you???

Call Wright Clarke Solicitors on (07) 4992 2722 to arrange an appointment to discuss your Estate Plan today.

Have you thought about who will get the family farm?

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Your farm represents a lifetime of hard work, and it can often be difficult to avoid disputes when transferring it to the next generation.  The majority of farmers in Australia haven’t discussed succession planning.

Business succession planning outlines what will happen and who will take over your business when you leave, whether by choice or by circumstance. The aim is to provide the business with a smooth transition so that disruption is minimised.

Succession planning involves many complex issues, spanning legal, financial and management arenas, so it’s important that you seek legal advice to ensure all your bases covered.

Each business is different of course, but you will likely need to consider:

  • Goals and objectives of all parties ?
  • Do you require an ongoing income from the business?
  • What impact will there be on all members of your family?
  • Identify your potential successors and objectively assess their capability, needs, commitment, skills and experience.
  • Minimising Capital Gains Tax, Stamp Duty and Income Tax for you and your family and remaining partners
  • What will happen in the case of catastrophic injury or death?
  • Define roles and responsibilities of current family members, business owners and employees
  • Business valuation – is there a plan to increase the value of the business particularly if it is to be sold?
  • How will you exit and by when?

Wright Clarke Solicitors will liaise with your financial advisors to ensure cost effective practical solutions to these issues.  We also have experience in bringing reluctant parties to the table in a friendly safe environment ensuring all parties are heard and understood and their needs met and issues resolved in most situations.

I’ve been appointed as an Enduring Power of Attorney – what do I do?

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Life always comes with unexpected surprises. Many are pleasant but not all are. Often people are asked to handle a friend or family member’s affairs and whilst most people want to help, the red tape of life does make the task complex to say the least.

To be able to handle someone else’s affairs legally you must be appointed their attorney. An Enduring Power of Attorney is the most common form these days. This document authorises the attorney to act even when the person has lost capacity (due to accident illness etc). The attorney must always act in the best interest of the person who appointed them and in some instances the attorney must act for the best interest of the other person even where such an action is in conflict with what is financially best for the attorney themselves. This is a position of ultimate trust.

Often the power only starts when the person is unable to act for themselves and if this is sudden or family members aren’t aware who should be making decisions this can cause stress and arguments. Do you know where to find their personal health and financial records? Has the person given details of what is important to them?

Any person acting as an attorney should keep detailed records of what they have done as the attorney and what money has been spent on. Any substantial decisions should be made after consulting with experts that can guide you such as doctors for health decisions and accounts and lawyers for financial and legal decisions. Keep records of their advice.

Most attorneys don’t charge for assisting and this is often a thankless task. For advice on how to best manage someone else’s affairs or who to appoint to handle your affairs in the event that you cannot do so, please contact Anna Radel at Wright Clarke Solicitors for a consultation.

 

Who do you trust to help you through the tough times

If you were to suffer a sudden and severe illness who is going to manage your affairs? Who will deal with the doctors, medicare, pay your bills manage your investments make claims on insurance policies and keep your family operating as well as possible after this trauma? If you don’t have a valid effective Enduring Power of Attorney your family may not be able to pay the bills or ensure that you get the treatment they know you would want. Applications to court may be necessary which is both expensive and time consuming.

Taking the time now to properly consider your affairs and how you want things managed can make a big difference to how well your family copes with the trauma of losing you.

It is important that your family and close friends know who to contact if something should happen to you.

Are you involved in business? If so then who will act for you in your business, trust or superannuation matters? Do they understand what assets you would sell and what you want to keep for your estate? What do you want them to do if you lose capacity and you have to face assisted living facilities and large medical bills. A poorly advised attorney can wreak havoc on your carefully planned will simply by selling the wrong assets or drawing funds from the wrong account.

There is no substitute for properly prepared estate planning documents. If you care about how your affairs are managed and how you are treated when you can no longer make these decisions yourself please call 07 4992 2722 to arrange a time to meet with Anna Radel at Wright Clarke Solicitors.

7 Steps to build a better business and family

You work long hours in your business so don’t let unplanned for risks undo all that hard work! Follow our 7 simple steps to ensure your business and family are protected.

7 Steps to build a better business and family

 

  1. Stress Less.  Take some time out to plan your affairs. You don’t want to be rushing through your estate planning or other legal matters because you’re going overseas or there is a major event in your life.
  2. Get Organised. Do you have a Will and Enduring Power of Attorney? Is it current? Do you know if it will actually deliver the result that you intend? Take the time to ensure that all your assets are considered as many are not covered in a standard will.
  3. Take Control. While your superannuation assets might not form part of your estate in the event of your death, you can certainly control how they are to be dealt with in that event, for example by making a binding death nomination. Again though it is important to review this regularly to ensure that it is in keeping with your current succession plan.
  4. Prepare Properly. We all put a great deal of effort into planning a party or a trip away but loathe to sort out our legal matters. Take our personal and business legal health checks and then sit down with our professional team to map out a future plan to ensure all your legal matters are up to date.
  5. Dream Big. Take your business to the next level.  If you are running a business now is the perfect time to consider what goals you wish to achieve in the coming year and whether your business structure suits your present commercial needs.
  6. Protect your assets. Will an unexpected claim cause all your hard work to crash. Book an appointment with Anna Radel to ensure that your business and personal assets are protected from potential risks.
  7. Get advice early. Don’t wait until it’s too late. Wright Clarke Solicitors is happy to provide some initial general advice of the hidden risks in that handshake deal on a complimentary basis to our clients. We can also prepare and negotiate a specifically drafted legal document having regard to your specific circumstances that can reduce these risks and provide guidance on areas where disputes most commonly occur. It is too late when the deal has gone bad.

If you’d like assistance with legal needs contact our team for a Complimentary Legal Health Check.

When do I need legal advice on my business structures?

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So you’ve seen your accountant and developed strategies to manage your income and future planning. Recommendations often include trusts, companies and self-managed superannuation. Before implementing any strategy it’s important that you understand your legal obligations.

At Wright Clarke Solicitors, business structures are what we do. When we are talking to you about any aspect of your farming or rural business, four of the things that we will constantly be thinking about are:

  • How can we protect your assets?
  • How can we save you tax?
  • How can this be organised for business succession?
  • How will this fit in to your estate plan?

We offer plain English advice and practical solutions tailored to your needs. Early knowledge is always the most cost effective way to manage your legal affairs.

Don’t leave your business to chance – contact Wright Clarke Solicitors to ensure your business is protected.

 

DIY Wills and Will Kits

DIY Wills and Will Kits

Do It Yourself Wills and Will kits are a tempting option for those on a budget because they offer a cheap solution to having a will drafted by your solicitor.

Wills drafted by suitably experienced estate planners are no longer cheap however it is important to understand that an estate planning solicitor does a lot more behind the scenes with regard to reviewing your situation. Without legal training you often unaware of the implications your personal and financial situation could have.

But my affairs are simple?

Many people think their affairs are simple and a will kit would be suitable. However quite often it is found that people do not have the simple affairs they initially thought. The law covering estates is complex. An understanding of the multiple pieces of legislation surrounding estate planning as well as a sound understanding of how the courts interpret the common law is important to make sure your wishes are fully put in place.

The following common situations are rarely appropriately covered by a will kit:

  • Blended families and children from multiple relationships;
  • Children and/or grandchildren under 18 years of age;
  • Other parties financially dependent upon you;
  • Family members with a disability;
  • Family members facing insolvency;
  • Family law matters;
  • Consideration of taxation issues;
  • Assets held by other entities such as companies;
  • Family trusts; and
  • Dealing with superannuation and life insurances.

 

In fact, most of the professional fees that you pay are not for the piece of paper that is your will, but for the review of your situation and the advice given to you situations such as jointly owned assets, assets held by other entities, practical considerations and knowing the risks that your estate is exposed to from members of your family contesting your will.

 

The following is a summary of the most common mistakes with will kits that we have seen over the years that have resulted in many thousands of dollars being expended by the estate in rectifying the omissions:

1. Failing to appropriately identify parties in your will

This can be incorrect spelling, failing to think ahead (i.e. at the time you did the will you had two children and down the track you had more), failing to appropriately describe people so that they can be identified. This then requires an application to the court and evidence given identifying the person you intended to name in your will.

2. Failing to properly execute your will

The use of white out, not signing every page, not having two adult witnesses witnessing the will, having the wrong clause stating how the will was reviewed by the willmaker for instance where the willmaker cannot read, is sight impaired or cannot sign, can all render a will invalid. Failing to properly date it can also leave wills susceptible to a challenge that it was made before what was in fact a previous will.

3. Not appointing appropriate executors and trustees

Many times people appoint their family members without giving consideration to whether they can appropriately manage the responsibility. Sometimes the role of an executor or trustee can last for many years, such as where there are minor beneficiaries to be cared for or a life interest over property. It is very important to ensure that the people appointed can manage any of these issues and can work together efficiently.

4. Giving away assets that you don’t actually own or cannot be divested through your will

It is important to understand how you hold property. The investment house that you intend to leave to your son could be owned by your family trust and the control of that passes from the trustee to somebody other than the son you intend to leave it to. You may wish to leave your interest in a bank account that is held jointly with your spouse to your children, because of the nature of the bank account those wishes will not be carried into effect.

5. Leaving family members out of your will

Sometimes you can inadvertently leave out a gift to a family member or in fact you do not intend to leave them anything for a variety of reasons. An estate lawyer can assist you with the appropriate documents to lend weight to your decisions and provide advice about the risk of your estate being contested so that you can make an informed decision.

6. Poor drafting of gifts

You may choose to leave the house you live in to your children. If you subsequently move house and this is not appropriately drafted, that gift would fail and the house that you have moved into in substitution for the house referred to in your will would not be gifted to your children. Again an application to the court would be required to attempt to rectify this however the costs are high and the outcome is often uncertain.

7. Failure to understand estate planning laws

Failure to give consideration to the tax implications on which the way your gift is dealt with; sometimes the wording used in a will can result in a transfer of an asset become a taxable transfer whereas separate or different wording would result in it being a tax free transition.

8. Handwritten amendments

As most will kits are fill in the blank wills it is important that all of areas are appropriately signed, initialled and witnessed by all parties necessary to sign the will in each and every instance. Failure to do so could render those gifts or the entire will invalid.

9. Mistakes

Often people think they have dealt with all of their assets and fail to put in a residue clause. This can result in a partial intestacy of your will and the assets not appropriately dealt with in your will kit will be dealt with under the succession law which may not be in accordance with your intended wishes.

Each of these omissions can result in the failure of your wishes to be put into effect and potentially thousands of extra dollars in legal expenses being borne by your estate. It is always advised that you have your will and other estate planning documents prepared by a solicitor who is experienced in estate planning.

 

At Wright Clarke Solicitors we are happy to give you a complimentary half-hour estate planning review so that we can provide you with an estimate of costs and provide you with advice on how to best manage your affairs so that your wishes can be put in place for your family after you’re gone. We can also come up with arrangements in order to assist you with paying for your estate planning if necessary.

Please contact Emily Templeman, our estate planning and administration clerk on 07 4992 2722 if you are interested in arranging a consultation.

The return to school battle!

January and early February have been a flurry of school based activity. Both my children now are boarding at The Rockhampton Grammar School. So January was busy with cricket and golf training, fencing and cattle work as well as arguments with contact and the sewing machine!!! 

My goodness the busyness of getting school books uniforms and casual clothes kept my mind off the fact that I would be home alone (except for a husband that crashes each night exhausted on the couch!!). It was hard sending my eldest last year, but to send them both this year resulted in a two hour drive home in tears!!  

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I have been looking for some me time for 13 years and now that I have it – I would give it up in a heartbeat to have my lads back home!!

 I find it amazing how the jobs seem to take no time at all when you are not hollering at them to stop fighting or clowning about and feed the dogs, check the eggs, feed the poddy calf.  I now wonder why I didn’t just do it myself – oh that’s right I was washing folding ironing cleaning and shopping for food (my poor husband had the fun of cooking most nights!!!) not to mention adjudicating the incessant pre-teens squabbles and hiding iPad’s.

My eldest  son took an entire year to settle into boarding last year. Thanks to the tireless efforts of a well-equipped and generous minded staff he finished the year well and waded back into the fray with hardly a backwards glance.  A cricket tragic, he was off in a cloud of dust to the cricket nets!!!

My younger son had a few ups and downs but has found some mates and will no doubt find his rhythm soon. The teary phone calls are less often and he seems to be having lots of fun! 

Choosing the right path for your children is always a challenge – every option has its pros and cons. The discipline and focused education was vital to my boys who are not naturally academic. The exposure to so many children from other areas helps them understand others and truly realise the world is a lot bigger than Biloela! 

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So term one has begun and now I am taking the time to follow my own advice. This week I am completing our legal health check for our personal affairs. Whilst we never want to think about early death or sudden serious injury – riding the quad bike through mud paddocks to get to town for work  made me stop and think – did we consider the risks and what if a nasty accident had occurred? Well after I complete this check I will know what I need to do to ensure my boys are safe and cared for if something happens to me!  

Have you considered the potential outcome of sudden death or illness on your family? Our free personal health check questionnaire can help narrow down issues that need to be considered and we can formulate a plan to ensure that all bases are covered and your family provided for legally in the event of an accident or illness.

Email or call our office on 07 4992 2722 and arrange a time for me to contact you by telephone to discuss your situation and see how we can help you. Sign up for our emails and let us know what legal issues interest you.

 

How to challenge a Will

Losing someone close to you can be an emotionally difficult time, and having to challenge a Will can make this all the more difficult.  Challenging a Will can be complicated and strict time limits apply- so seeking legal advice early is imperative.

Under the Succession Act 1981 (QLD) the following categories of people are eligible to make a claim for further provision from an estate if they feel unfairly provided for under the Will:

  • Husband or Wife of the deceased
  • A de facto partner of the deceased
  • A child of the deceased (this includes adopted and step children)
  • A dependent former husband or wife of the deceased
  • A person who was wholly or substantially maintained by the deceased at the time of death

To challenge a will and to make a claim under the Succession Act you must establish that inadequate provision has been made for you by the deceased.

The court will consider 4 things when deciding if adequate provision has been made from the Estate for your proper maintenance and support, namely:-

  1. Your financial position;
  2. The size and nature of the deceased’s estate;
  3. The totality of the relationship between yourself and the deceased;
  4. The relationship between the deceased and other persons who have a legitimate claim on the estate.

You may also challenge a will due to:

  • Undue Influence – if someone attempts to influence the terms of the Will or if physical, psychological or threatening duress was placed upon the deceased the Will can be contested.
  • Incapacity – if the deceased lacked capacity to make the Will meaning they did not understand the nature and effect of their Will they were signing or were unable to make rational decisions about how their estate is distributed the Will can be contested.
  • Contract to Make a Will – sometimes people may choose to enter into a binding contract to make their Wills in a certain way. Problems occur when one of the parties makes a later Will which is different to the contract. On most occasions the other party is not told of the change or in some circumstances has passed away. Providing the contracts have been drafted correctly and can be enforced legally, a person affected by the breach of the contract may be entitled to make a claim.

Wright Clarke Solicitors gives consideration to all of your personal and financial affairs when drafting your Will. We examine your own financial position and the size of the estate to determine your needs relative to the value of the estate. During the estate planning process we look at both current and previous relationships that may entitle others to a claim on the estate.  Contact our team today to discuss your Estate Planning needs.


Have you seen the other posts in our Estate Planning series?
Estate Planning Introduction: When to review your Will
Estate Planning Part One: How do I make changes to my Will
Estate Planning Part Two: The role of executors
Estate Planning Part Three: Challenging a Will

The role of executors

Being an executor can be time-consuming and emotionally demanding. You may be personally liable for the decisions you make. So agreeing to be executor is a decision which should not be taken lightly.

The paperwork involved in estate administration is increasing every day. Prior estate planning involving the relevant family members can minimise the negative impacts on a family. Many families are shocked to discover that the death of a loved one can trigger so much bitterness. Estate planning can identify areas of dispute and often help resolve them during the lifetime of the willmaker.

Estate planning involves more than just a well drafted will, although this is an essential component. Analysing the assets and liabilities and discussing gifting of personal effect (high sentimental value but generally of no commercial value) and implementing these plans can minimise the financial and emotional costs of managing an estate.

Executors are charged with identifying estate assets and liabilities, discharging the liabilities and then distributing the assets in accordance with the will. Some estate assets can decrease in value if not dealt with swiftly or if the estate has insufficient funds to maintain them. Sometimes this means making hard decisions and offending other family members. Whilst fair and open communication between the family members will minimise costs, it is imperative to obtain both financial and legal advice early on to ensure that executors are aware of the risks and obligations involved and some of the options available to them.

Have you been appointed executor?
It is your role as executor to locate the original Will, advise family and friends, then assist and pay for the funeral, and follow up the special wishes/ instructions from the deceased.

You must establish a complete picture of the deceased’s finances, including identifying any debtors and creditors. Funeral expenses, income tax, fees for administering the estate and out-of-pocket expenses must also be paid.

It is also your duty to carry out everyday tasks such as arranging for pets to be cared for, redirect mail, cancel services and pay any outstanding bills.

The executor must identify the estate assets including any interstate or overseas and have them valued, secured and insured. This would include such things as a home, car, superannuation, jewellery, investments and home contents

As an executor you are potentially responsible should something happen to the assets of the estate. It is important for the executor to ensure that all assets including property, collectibles and investments are safe and to arrange insurance protection if needed.

Before an estate can be distributed, it is necessary to obtain a clearance from the Australian Taxation Office. It is your duty as executor to obtain this clearance. It requires both a date of death and an estate tax return. The executor will have to give details of all income earned during the current financial year and past years.

There are many legal issues that arise when administering an estate. The executor is responsible for resolving estate issues, liabilities and disputes. This may consist of challenges to the Will including, entitlement issues and beneficiary disputes.

Wright Clarke Solicitors handle many estate matters and liaise closely with financial advisors to ensure practical efficient and costs effective advice is given to families involved in estate administration and planning.


Have you seen the other posts in our Estate Planning series?
When to review your Will
How do I make changes to my Will