Category Archives: Blog

Transactions with family entities under greater ATO scrutiny than ever

Farming, Structures, EntitiesDo you have several different taxation entities such as companies trusts and family partnerships? The Australian Taxation Office (ATO) is investigating these relationships more and more. ATO rulings indicate that informal arrangements will not be accepted.

If your entities are reviewed and the ATO does not consider the arrangements appropriate, any taxation advantages can be lost and interest and penalties can be imposed.

Ensuring that all related party transactions are drafted as though you are entering those relationships with strangers (arm’s length transactions in the legal lingo) reflecting normal commercial terms and rates will reduce the risk of financial penalties.

We work with our clients to put together arrangements that meet their financial outcomes but provide legal protection for the unforeseeable. We have flexible solutions for all budgets and a vast understanding of business structures helps to ensure contingencies are identified and considered.

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

 

Deferred Livestock Sales – Lease buy arrangements

Livestock on farm

Exiting the primary production game or trying to establish a herd with cash flow restrictions? Leasing and Sale Purchase Options can be a fabulous way to manage the needs of people buying and selling livestock and properties.

Each offers its own benefits and flexibility and can offer certainty of price and timing of payments when put together with expert advice.

We work with our clients to put together arrangements that meet their financial outcomes but provide legal protection for the unforeseeable. We have flexible solutions for all budgets and a vast understanding of livestock operations helps to ensure contingencies are identified and considered.

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

Livestock away on agistment? Are you properly protected?

Lifestock on agistment

Since 2009 a new regime has been implemented creating a new one stop register for all securities on assets that are not land or fixtures of the land. The impact on owners of livestock agisted on another person’s land is significant. A hand shake deal will not assist you if the bank takes control of the land.

If the landowner fails to meet its mortgage terms and its bank is entitled to possession of the land then your livestock on that land can be taken by the bank in satisfaction of the debt owed to it by the landowner IF you do not have your title to the livestock secured by registration on the PPSR (Personal Property Security Register).

Even when you are in a family arrangement or you have different family members or structures owning the land to the members who own the livestock this documentation is vital to protect the ownership of your livestock.

This registration is a complex procedure and must be supported by correctly prepared documentation evidencing the agistment (or similar arrangement ie backgrounding schemes) terms and particularly noting the way that this transaction is able to be protected under the PPSR scheme.

At Wright Clarke we can offer a range of services tailored to your needs and budget from a thorough review of all transactions and complete advice on the best way to structure these arrangements to a simple agistment agreement covering the very basic terms and covering the PPSR issues but leaving many of the small details to you and the landowner to negotiate from time to time.

Talk to us today to ensure your business is protected.

Buying a property? Get our top auction tips!

Auctions are a way to market and sell a property without negotiating the terms. It can be stressful, especially if you are a first time bidder.  At an auction, the property is sold to the highest bidder above the reserve price.  On the auction day the successful bidder will be signing an unconditional contract with no cooling off period.

Do not just turn up and bid!

You need to make sure you do your homework on the property prior to the auction and be fully prepared on the day.

This may mean that you will need to pay for a solicitor to review and advise you on the contract and to attend to property searches prior to the auction. Some of the searches that we highly recommend include:

  • Title Search
  • Plan Search
  • Contaminated Land
  • Mining Search
  • Rates
  • Land Tax
  • Water Search (DNRM)

There are many more searches to consider depending on the property you are buying and what you want to do with the property.

PRIOR TO AUCTION

  • Determine if the seller can in fact sell the land and any other items included in the sale!
  • Obtain building and pest report
  • Obtain pre-approval of finance (remember you cannot get out of an auction contract because you can’t get finance)
  • Review the auction contract with your solicitor so you are aware of any key issues.
  • If there is a ‘Buying as is’ clause, carry out searches prior to auction as recommended by your solicitor
  • You can often negotiate before the auction to bid on different terms to the auction contract. For example, a longer settlement, a small deposit or an extension of time to pay it. Don’t be afraid to ask, the seller can only say no
  • Ascertain what you think the property is worth and what you are expected to pay. Set a ceiling and stick to it – do not get caught up in the excitement of the day.
  • If a person who must sign the contract as buyer cannot attend the auction, obtain a bidding authority from this person. This can be arranged through the agent prior to auction.
  • Remember auction properties are often sold prior to auction so you may want to speak to the agent about submitting an offer prior to auction

ON AUCTION DAY

  • register with the agent as a possible bidder
  • Don’t be afraid to ask any last minute questions
  • You may bid by putting up your hand, calling out or nodding your head when you catching the auctioneer’s eye
  • Start lower than what you’re prepared to pay for the property and think clearly about each bidding increment.
  • Try to break the auctioneer into smaller increments as bidding increases
  • Know how much you are willing to pay and stick to your limits
  • If the property is not sold at auction, it is ‘passed in’ and you may continue negotiating with the seller if you wish

If you have any queries about auctions or buying or selling property in general, contact Anna Radel on 07 4992 2722 or email admin@wrightclarke.com.au.

Selling your property? Don’t sign it all away!

STOP! Before signing a contract, you need to ensure you understand what you are signing.

A contract is a legally binding document. A standard document does not mean it is safe to sign it without proper advice.

Once you have signed a contract you are bound by the conditions. It can be a difficult and potentially expensive process to negotiate changes or terminate a contract. Does that contract cover all your concerns? If it does not, then in the event of a dispute only a judge can make a decision. Do not leave your affairs to chance!

If you are buying or selling real estate and are signing a lease, trust documents or any other contracts, it is recommended you have the contract/deeds reviewed by your solicitor prior to signing.

Get advice before you contract to sell your home

Residential contracts have become complicated over recent years. There are a large number of government regulations dealing with residential property. Real Estate Agents are not allowed to give legal advice and do not conduct the searches necessary to determine if your property is legally ready for sale. Sellers must be careful to avoid being ‘penny wise and pound foolish’ as the saying goes. Just because it is a standard contract doesn’t mean it is safe to sign. One size fits all never applies to legal matters!

Most people agree that attending to various searches before buying a property is smart. Incurring legal costs can prevent much greater losses where these negative impacts are not discovered before you become the owner of the property. Many sellers simply are not aware of the financial consequences of not attending to these matters before sale.

Sellers must ensure that their house has a compliant electrical safety switch and smoke alarms installed and that the swimming pool is registered and a current safety certificate held (if not held an appropriate notice must be given to the buyer before signing the contract). Other issues with the property must be determined and disclosed. In addition the seller or its agent must comply with certain government requirements when giving the contract to the buyer to sign. Are you entitled to sell? Has anyone got an undisclosed interest in your property? Is the property described properly? Have you complied with the Consumer Law and all the other laws that impact upon selling your property?

The failure to comply with these requirements can result in the buyer terminating the contract and seeking payment from the seller for the failure to comply. In many instances these costs far outweigh the legal costs of ensuring the contract is fully compliant.

At Wright Clarke Solicitors we will review your contract to confirm it reflects the intended agreement. We can help you understand the terms and conditions of the contract and identify any legal implications.

A simple review is often complimentary and we always advise you before fees are incurred. Contact us today on 07 4992 2722 or admin@wrightclarke.com.au if you’d like our assistance with reviewing your contract.

What sort of compensation can I expect?

Our approach is not to advise on what a company will pay but what a company is required to pay under the relevant legislation. We often consider issues other lawyers do not – why – because we have day to day understanding of life on the land – the connection to the soil and the real impact of mining on the family farm.

As the landholder you are entitled to receive compensation for any adverse impacts the resource company may cause.

You must be compensated for:

  • deprivation of possession of land surface
  • reduction in land value
  • reduction in land use including reduced use that could be made through any improvements to it
  • severance of any land from other parts of the land owned by the landholders
  • any cost, damage or loss arising from activities carried out under the land surface
  • damages incurred by the landholder as a consequence of matters mentioned above

The resource company is also required by law to compensate you for your reasonable and necessary legal costs incurred in the negotiating and preparation of a conduct and compensation agreement. This also extends to costs associated with accountancy and valuation services.

So how does Wright Clarke Solicitors charge?

We pride ourselves in dealing with our fees and costs with our clients upfront and in an ethical fashion. We will discuss with you how your fees will be charged and we are required by law to enter into a costs agreement which sets out the terms of our retainer.

We endeavour to ensure that the party seeking to access your property agrees to pay. Do not be fooled by limits! We will ensure that you understand what your risks are and how our fees are to be paid each step of the way!

If you are faced with CSG or coal mining activities on your land please contact the team at Wright Clarke Solicitors – we’re here to help.

Your rights and obligations when faced with Mining activities on your land

New land laws came in to effect in October 2010 and these laws set out requirements of both the resource company and the landholder, in relation to access to the private land and the need for compensation. While a company with the required authority is allowed to explore and produce resources from private land the affected landholders are entitled to know what activities are being under taken and also receive compensation for those activities.

If a company has met all its legal obligations it is an offence for anyone, without a reasonable excuse, to obstruct a resource company from:

  • entering or crossing land to carry out authorised activities or
  • carrying out authorised activities.

For example, you cannot obstruct a resource company just because you don’t agree with the activities being carried out on your land.

As it’s likely you will be working with the company over an extended period of time, it’s in both parties interests to share a good working relationship. The negotiated conduct and compensation agreement is the foundation of that relationship and may assist in determining the quality of future interaction you have with the company.

In our next article we will be looking at what is included in a Conduct and Compensation Agreement and how you can best prepare for negotiations and ensure you come to an agreeable outcome.

If you are faced with CSG or coal mining activities on your land please contact the team at Wright Clarke Solicitors – we’re here to help.

Binding and Non-binding Superannuation – what’s it all mean?

Who is going to get your hard earned Superannuation
You’ve put away money for that rainy day – but who will get this money if you die?

When you die the Trustee of your super fund decides on who receives your super. Many people are blissfully unaware that their entire super, and often their insurance benefits, are up for grabs amongst the dependants they leave behind. Many more do not know who is a ‘dependant’.

Hang on I told them who was to get my super if I die
Under superannuation law, the Trustee of your super fund has the discretion to pay out your super benefits if you die amongst the defined ‘dependants’. At this stage you might say to yourself, this does not apply to me, I have nominated my beneficiaries. Are your bases covered?

Was it a binding nomination? Or did you just write in your partner’s or your children’s name. Have you checked recently? It is surprising how many people nominated mum or dad 20 years ago and now have a family.

Okay I didn’t do that binding thing
On the positive side, this power allows the Trustee to take into account a new spouse or family if the Superannuation Member never got around to updating those nomination forms. The downside is that this may mean that your “ex”, who you never got around to removing as a nominated beneficiary, may get their hands on your super after you have gone and it is too late to argue. Will your ‘ex’ take care of all your children properly? This is not something we should leave to chance. You need good financial and legal advice and this advice must be within the context of all your financial affairs and your specific and unique family circumstance. A simple ‘kit’ just won’t cut it.

Binding Nominations
Well now you can have the final say about who receives your super. This feature is called a Binding Death Benefit Nominations (Binding Nominations).

What are the benefits of making a binding nomination?
You remove any uncertainty about who receives your super (including insurance amounts) when you die. This means you can nominate exactly who gets what. Provided you get good professional advice you can prevent unwanted claims against your super. This makes your Estate Planning more precise and effective.

Who can I nominate?
You can nominate any of your dependants as defined under the superannuation law – i.e. your current spouse (including your defacto) or your child of any age (including adopted children and your spouses children), or a person financially dependent on you at the time of your death (your grandson you are raising). You can also nominate your estate (your assets in your Will). It is important to understand the financial consequences of who you nominate.

It is also vital that you understand who is considered your child under the super laws. This can be quite shocking – particularly if you are separated but not divorced and have a defacto partner. The definition of child is very broad.

You can split the benefit between people as long as you give details of those dependants and the proportional share you want to go to them. You can also determine how they take their super in certain circumstances – such as pensions for spouses rather than a lump sum payout. Only the nominees who are dependents at the time of your death can receive your super so it is important to review this with your advisors regularly.

Must I make a binding nomination?
No. The decision is yours to make. You can make or revoke a binding nomination at any time prior to your death provided you have capacity.

What happens if I don’t make a binding nomination?
The Trustee distributes your benefits amongst your dependants and your estate in whatever way it believes is fair and reasonable. This is done taking into account the nomination you completed on your application form (remember, though, they are not bound by your nomination unless you made a ‘Binding Nomination’).

Special care needs to be given to self managed super funds. Who will be the Trustee at the time that you die? If that is your spouse or a child can you be certain that they will put your other family member’s needs and your wishes ahead of their own interests. It is not against the law for your Trustees to use their power to give your super to themselves if they are your ‘dependent’

What if I have already named my beneficiary?
Any nominations made before December 1999 are not binding on the Trustee. The Trustee continues to take them into account when exercising its discretion, provided you do not make a ‘Binding Nomination’. However, if you make a ‘Binding Nomination’ now, you override any prior death benefit nomination you have made.

Are binding nominations effective forever?
No. You can revoke or change your nomination at any time. Some nominations lapse other remain until you change or revoke them. Each super fund has its own rules and you must be certain that you comply with the rules to ensure your nomination is valid.

How do I make a binding nomination?
Contact your super fund and ask them whether they allow you to make binding nominations. You will need to complete a special form and have your signature witnessed in a special way. It is very important that you discuss this with your lawyer and financial advisor before you make a binding nomination. All your assets and interests must be considered to ensure that your wishes can be upheld after you die.

What happens if my nomination is invalid?
If your nomination is invalid for any reason, e.g. not signed properly, your super is paid at the discretion of the Trustee, to either your dependants or your estate.

Is there anything else I should consider?
You may want to consult an adviser and a lawyer to determine any tax and legal implications and to ensure that you achieve the optimal financial result for your dependants.  Bear in mind that superannuation money left to someone other than a spouse or minor (under the age of 18) dependant is in most circumstances taxed.

How does the Trustee make their decision
Generally a fund’s trust deed determines a benefit is paid to a dependant or anyone who is financially dependent in any way on the member.  The Trustees must also go through a pain staking process, which involves notifying anyone who may be considered a dependent and entitled to claim on your super.  This may encourage people to make a claim, purely because it has come to their intention that they may be entitled to a benefit.

As a result the distribution of a member’s super death benefit can become a time consuming and sometimes costly process.   Beneficiaries can appeal the trustee’s decision through the Superannuation Claims Tribunal and due to the processes involved, the distribution of the superannuation proceeds can take many months and even years.

In the meantime, your loved ones are left to deal with the financial, emotional and physical devastation of no longer having you in their life.  To add to their difficulties, they are left to deal with the stress of the superannuation claim appeals process, not to mention the disintegrating family relationships that may result from such a process.

You will need to keep your nominations up to date, especially if you marry, re-marry or have children.

There is no substitute for regularly reviewing your affairs with your trusted advisors and ensuring that all your assets and entities are taken into account and taxation, debt management and other issues properly considered in the full estate planning context.

Anna Radel at Wright Clarke Solicitors takes the time to thoroughly review your financial and personal affairs and to explain the various legal matters that must be considered when planning for the future of your family when you can no longer take care of them. If you need help with your Wills and Estate Planning contact us on 07 4992 2722 or email admin@wrightclarke.com.au.

Are you faced with mining activities on your land?

It is an antagonising and often worrying experience when first faced with exploration or development on your land especially when dealing with the uncertainty of unknown impacts to your land, business, family and your future.

It is important that prior to any entry to your property that you know your rights and know the right questions to ask. It is also important that you get the right legal advice from people with expertise in gas and mining negotiations, but also lawyers that understand you and your business.

Anna Radel prides herself on providing landholders with the highly technical advice they need in practical terms they can understand.

Our approach is simple:

  1. Negotiate an agreement which protects your rights – now and for any future impacts;
  2. Ensure you the landowner really understands the potential risks as opposed to the compensation amount offered;
  3. Clearly define and explain the activities that will be undertaken on your land and how those activities will be undertaken; and
  4. Include compensation which adequately covers your loss, the impact to your land, your business and your time.

If you are faced with CSG or coal mining activities on your land please contact the team at Wright Clarke Solicitors – we’re here to help.

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