Wills & Estate Planning - elringtons lawyers

Charitable Gifts in Wills

Posted on13, November 201816, November 2018AuthorMitchell Evelyn

Leaving a gift to a charity in your Will can be a great way to provide generous support which might ordinarily be outside your financial means. As with any other gift in your Will, it is important to make sure that any charitable gift is clear, well considered and carefully drafted to ensure that your wishes are carried out after you have died.

Here are some of the key issues that you may wish to consider:

Why give to a charity in your Will?

The main reason people tend to give to charities in their Will is to support a cause which they care about.

However, we often see people include charities in their Will for other reasons. For example, a gift can be left to a charity contingently on certain other gifts failing in the Will. This process uses the charity as a safeguard to prevent the gift going somewhere the Will maker did not intend.

For example:

Mary is a single person with one son named Jack. Mary wants to leave her whole estate to Jack, and puts this in her Will. However, Mary and Jack both die at the same time in an accident and Mary’s gift to Jack fails. The statutory intestacy formula applies and Mary’s whole estate goes to her brother, who Mary does not get along with and would not wish to benefit under her Will.

Mary could instead provide in her Will that she leaves her estate to Jack, or if that gift fails, her estate will instead go to a charity of her choice.

Which charity to choose?

People choose charities carefully – often because they have either given to that charity regularly during their life or because they feel a close connection to the work done by that charity.

Before leaving a significant gift to a charity, you should investigate that organisation and make sure that you are comfortable with them. You should certainly ensure that they are a legitimate charity, and also be comfortable with how they will use your gift. Many charities will be very happy to speak with you over the phone and explain how your bequest might be applied if you do leave them a gift in your Will.

You should also be precise in identifying the charity – for instance, by including its Australian Company Number (ACN) or Australian Business Number (ABN). You should also keep in mind that some charities are administered as a group of state or territory organisations, so ensure that you nominate the correct one in your Will.

You may also wish to include substitution provisions, to allow for your gift to be made to a similar charity to the one you have nominated in the event that the charity no longer exists at the date of your death.

For example:

Mary leaves a gift to a local charity which helps to take care of people’s pets if they become seriously ill and can no longer do so themselves. This is a small charity, and after its founder passed away, the charity was wound up.

Mary’s Will includes a substitution clause, which provides that if a charity she has nominated no longer exists when she dies, then her Executor may give the gift to another charity of a similar purpose. Mary’s Executor instead makes the gift to the NSW RSPCA.

Purpose of donation

The conventional wisdom is usually that charities prefer to be given gifts which are specified as being “for their general purposes”. This permits the charity to decide how and where that donation is applied – some may go to the general overheads of the charity, and the rest may go into various projects or services being offered by the charity.

If you intend to make a bequest which is intended to serve a particular purpose – for instance, a gift which is expressed to specifically be for the purposes of assisting research into pancreatic cancer – it would be best to contact the charity directly and confirm that they are able to direct your donation to that specific purpose.

Recommended clauses

Family Provision Claims

The Family Provision Act 1969 (ACT) and Part 3 of the Succession Act 2006 (NSW), as well as equivalent statutes in each State and Territory, provide mechanisms for certain people (including close family) to challenge a Will in cases where they have not been afforded adequate provision under the Will.

You should be cautious if leaving a significant portion of your estate to a charity if that gift is at the expense of your children, spouse, or another person who you might be expected to provide for in your Will. If you do intend to substantially benefit a charity over people who are eligible to make a claim on your estate, this should be done only with very carefully considered legal advice from one of our estate planning experts.

For more information about when a person might be eligible to bring a Family Provision Claim against an estate, please see our article Disputing a Will: When can a person apply for provision out of an estate?

Elringtons Lawyers are big believers in giving back to our local community, so if you are considering leaving a gift to a charity in your Will, call elringtons experienced Estate Planning team on (02) 6206 1300 and make an appointment today. For information about elringtons’ partner charities, see our community page.

For more information or to make an appointment in either our Canberra or Queanbeyan office please do not hesitate to contact Mitchell Evelyn or Kerin Cotchett:

+61 2 6206 1300 | e: info@elringtons.com.au

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Top Tips for Estate Planning

Posted on28, September 201828, November 2018AuthorMitchell Evelyn

By Mitch Evelyn

Our team helps hundreds of people each year put together their plans for death or incapacity. Our role is to understand what your wishes are and ensure these are reflected in your Will. We often see well planned sensible Wills – however, we are also often instructed to prepare Wills (against our advice) which miss the mark and create headaches for friends and family after death.

Here are some of our top tips for making a good Will.

Keep it general

How your Will might work now could be very different from how it might work in a few years. We prepare our Wills so that they are flexible enough to account for large changes in your life between when you make your Will and when you die.

It is often better to describe things generally – such as “my primary residence” or “any motor vehicle I might own” if there is a risk that you won’t own them at your death. These sorts of gifts need to be phrased very carefully to make sure that they do not fail, so it is important to only include them in your Will with a lawyer’s help.

Talk to your family and ask them what they would want

Remember, you aren’t only making a Will for you, but for your family or your beneficiaries. If you are going to give specific things to certain people, you should make sure that you are giving them things which they actually want or need.

Sometimes beneficiaries are embarrassed by being given a larger share of an estate – to the point where they actually give some of their share to other beneficiaries. Sometimes, people receive property which they simply don’t want or need, and either give it away, sell it, or forget about it.

Don’t put too many people in charge

The old saying about “many hands” doesn’t apply in all situations. Generally speaking, having one or two executors at a time is ideal – more than that can often slow down the administration of your estate and create double handling issues.

If you appoint, say, four executors, then your executors need to work around four separate availabilities. This can be further complicated if one lives far away or doesn’t get along with the others. Weeks can be added to the winding up of your estate as documents are sent back and forth across the country.

Resist the urge to appoint everyone as an executor – one or two, with a backup executor to step in if your first executor cannot act, is more than enough.

You can’t plan for everything

When we prepare a Will, we stress test it by imagining what might happen if your circumstances were to change. However, there comes a point where there is no need to keep planning and the best course is to let things run their course and change your Will if your circumstances change in the future.

A good Will plans for contingencies – for example, by giving the whole of your estate to your partner, and if partner has died before you, to your children, or if your children have died, to their children. A Will which tries to plan for every contingency will often be more expensive and unnecessarily complex, both to prepare and administer.

Don’t rule from the grave

We sometime see people create elaborate and complex Wills which are heavy-handed in controlling how their family will receive and use their inheritance. Often, these include contingent gifts (for instance, person X will receive their inheritance only if something happens), or creating trusts which “drip feed” an income to beneficiaries.

These methods sometimes have their place. However, it is also important to bear in mind that you may be restricting your beneficiaries from reacting to changes in their own circumstances or needs – for instance, if their health takes a turn, or they lose everything in a natural disaster.

Beware of gifts which carry obligations

When you gift a house to someone, you are also giving an obligation to pay rates or maintenance, or possibly even refinance a mortgage to keep the property. If your beneficiary cannot afford to do this, then they are often placed in a difficult position – they may not be able to afford to keep your gift.

Some gifts can also be tax time bombs – for instance, if you give shares or property which may be subject to Capital Gains Tax to a person who is on a higher annual income, that person may need to pay more tax if they choose to sell those shares in the future.

You should also be careful when making provision for pets away in your Will. Always make sure the person has the financial means to care for the animal, and to provide it with a healthy physical environment and exercise.

We encourage you to think carefully over your Will and, if appropriate, discuss it with your family. When you are satisfied that you know what your Will should look like, call elringtons and ask to speak to one of our experienced Estate Planning lawyers at either our Canberra or Queanbeyan office.

e: info@elringtons.com.au | p: +61 2 6206 1300

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‘Undue influence’ in Estate Planning

Posted on15, August 201825, September 2018AuthorKerin Cotchett

Your Will is a crucial element of your overall estate planning. “Estate planning” refers to all those important documents and decisions that you make to govern what happens to your body and your belongings if you lose the capacity to manage for yourself including after your death. Estate planning can also include Power of Attorney and Guardian appointments, business succession agreements and superannuation binding nominations.

When you create a Will it is very important that you exercise free choice. After all, it is your wishes being recorded. Recording your wishes in a Will involves naming who you want to be in charge of your assets (your “executor”) and who you want to receive your assets (your “beneficiaries”) after your death. Having a valid Will is the best way to ensure your final wishes are appropriately carried out.

Your Will can be disputed if an interested party (a relative, close friend or carer for example) suspects that you (the “Will-maker” or “testator”) was under ‘undue influence’ at the time you gave your instructions for the Will to be drafted.

What is ‘undue influence’?

Undue influence refers to situations where a testator is under pressure to write a document (e.g. a Will or Power of Attorney document) in a way that actually goes against their true wishes. Manipulative behaviour such as blackmail, threats, lies and flattery may be used to unduly influence a Will-maker.

The primary purpose for someone to use undue influence in relation to Wills is so that they can gain more benefit from the testator’s estate. This is often at the expense of other beneficiaries, which may lead to family provisions claims (link to other elringtons articles re: FPA claims) by those unfairly treated family members of the deceased person.

For example, a deceitful child might make false claims about certain siblings to convince parents to leave their brothers and sisters out of an inheritance or disproportionately favour themselves. In other circumstances a new neighbour may befriend an elderly person and charm them in order to become a beneficiary of their Will in place of relatives in need of provision from the testator’s estate.

If a deceased person has left their whole estate to a single person, particularly if that beneficiary is a new acquaintance or unknown to other friends and family, this might be a sign that undue influence has occurred.

The Courts can determine that a Will is invalid if it is proved that undue influence has occurred. But how can someone prove that their loved one was coerced to make their Will?

How do you prove undue influence?

It is not an easy task to prove that a person was under pressure to write, sign or give instructions for their Will. Claiming that undue influence occurred is a serious allegation and the job of proving that it occurred is up to the person making the claim.

Witnesses to the production or signing of the Will may be able to provide evidence that the testator was coerced by someone who stood to benefit.

Other important evidence might come from the previous Wills of the deceased person. If the last Will is markedly different to previous Wills or differs greatly from their verbally stated intentions, the previous Wills might be used as evidence of the deceased person’s actual intentions.

There is no guarantee that any one of these factors will sway a judge, so please seek legal advice from a Wills and Estate Planning lawyer and let us help you make your case.

Contact elringtons Lawyers if you believe a friend or family member was under undue influence when making estate-planning decisions.

For more information or to make an appointment contact: Kerin Cotchett

e: kcotchett@elringtons.com.au | p: 02 6206 1300

Elder Abuse: Together making change

Posted on19, April 201825, September 2018AuthorKerin Cotchett

There are a number of reasons why the subject of elder abuse is gaining more traction with politicians and getting more coverage in the media at the moment. No doubt two of the main reasons Australians are beginning to take notice of this growing problem are: (a) Australia’s ageing population means that more and more old people (with more and more wealth) are at risk of abuse; and (b) the legal and social policy gaps in targeting this growing issue are becoming more and more obvious and difficult to ignore.

When I was given the opportunity to attend the ‘National Elder Abuse Conference 2018: Together Making Change’ I was thrilled for the opportunity, given that the majority of my clients are over the age of 65.

A few of the key legal issues in recognising and addressing elder abuse in a solicitor’s day-to-day legal practice include:

Assessing Capacity
Considering Undue Influence
Ruling out Conflict of Interest

Any one or all of these potential issues (and more) might arise when faced with taking instructions from clients, often presented by their children, wanting to make Wills or Enduring documents (Power of Attorney and Appointment of Enduring Guardianship).

Estate planning lawyers are obligated to ensure our clients have the mental capacity to give instructions to make a Will or Enduring documents (“testamentary capacity”). ^[1] In addition, we are encouraged to consider undue influence (even if just to dismiss it).^[2] Finally, it is important for us, as it is with any lawyer, to always assess “Who do I represent?” in order to avoid acting in conflict with our client’s best interests.^[3]

The National Elder Abuse Conference 2018 was comprised predominantly of short presentations and panel discussions about current issues and was geared largely towards social and economic policy development. The main legal focus of the conference was on those legislative reforms needed to reduce the occurrence of elder abuse and to better address and punish instances of it when it occurs. Two areas of legislative reform of particular relevance and interest to practising solicitors are:

Establishing a National register of Enduring documents; and
Criminal law responses to financial and other types of elder abuse.

National Register of Enduring Documents

The idea of a national register for Enduring Documents is one that has been around for some time,^[4] and is finally gaining momentum in the legal context. For example, in June 2017 the Australian Law Reform Commission recommended that there should be a three-step process, whereby the enduring appointments made by residents of all Australian states and territories become unified under the following:

An agreement on nationally consistent laws governing personally appointed substitute decision makers;
A consistent national model of enduring documents; and
A national online register of enduring documents, and court and tribunal appointments of guardians and financial administrators.^[5]

In recent times there has been a strong push from the banking sector, academics and elder rights groups for the establishment of a nation-wide electronic database recording all existing Power of Attorney documents.^[6] While it is possible that the changes, once implemented, may mean an increase in administrative tasks for staff in the banking industry, health-care workers and private practitioners, there is no doubt that all Australians would benefit from more effective regulation and policing of the use and abuse of power of attorney documents.

Policing Financial and other Forms of Elder Abuse

During the 2018 Conference The ‘Elder Abuse and Policing: What is Best Practice?’ Panel invited high-status members of the NSW and Victorian Police force and key community groups to discuss their current practices and limitations in their responses when faced with situations where they suspect abuse of an elderly person.^[7] The panel gave a number of examples of elder abuse including situations of neglect, instances of children or carers misusing power of attorney appointments, and other behaviours that fall within a broader definition of abuse than that currently prohibited or protected against under the current criminal law.

In its recent report on elder abuse the Australian Law Reform Commission stated:

In all Australian jurisdictions, there are offences that broadly relate to fraud, deceptive conduct, stealing and other property related offences. In certain circumstances, some of these may be applicable to cases of financial abuse of older people, including in respect of abuse of powers of attorney. In Victoria and Queensland there are a range of offences specifically relating to powers of attorney. The ALRC is unaware of any prosecutions under these provisions. ^[8]

At the end of the ‘Policing: Best Practice’ discussion the floor was opened for questions and Queensland Principal Solicitor Brian Heard asked: “Do you think the current level of data and the current legislation does enough to criminalise and target and address the problem of financial elder abuse?” NSW Detective Superintendent Robert Critchlow provided a very eloquent and honest answer (to paraphrase: “No and no”) and pointed to the work of one Rodney Lewis, Solicitor.^[9] Lewis has had a significant impact in the area of elder law, stating:

Even allowing for the ALRC recommendations there will remain gaps into which victims of elder abuse will continue to fall. We need a coherent statute adopted by States and Territories in a cooperative legislation scheme, to provide a focal point for the victim, their family, community and government support. It will include remedial and restorative justice measures which are affordable and mandatory when necessary for the perpetrator. Until we criminalise elder abuse in many of its forms, to address the just claims of our vulnerable elders, we cannot without significant legal risk and expense restore financial loss, let alone resolve the residual anguish, especially within the family.^[10]

Practising in this area when those well-needed legislative and policy changes come through will be exciting. While it may still be some years away, hopefully following the 2018 conference we will see some positive progress from politicians and eventually the legislature. Elringtons will be at the forefront of addressing those changes when they finally come through.

For more information please contact:

Our Wills and Estate Planning planning team:

p: +61 2 62061300 | e: info@elringtons.com.au

[1] Regarding the traditional test for determining testamentary capacity, see Banks v Goodfellow (1870) LR 5 QB 549; For comments that legal professionals need to be aware of circumstances which give rise to issues of capacity assessment see Legal Services Commissioner v Ford, [2008] QLPT 12, Unreported, Fryberg J, 22 August 2008
[2] Ryan v Dalton; estate of Ryan [2017] NSWSC 1007 at 107 per Kunc J

[3] Reilly v Reilly [2017] NSWSC 1419

[4] Parliament of Australia, House of Representatives, ‘Standing Committee on Legal and Constitutional Affairs Report Older people and the law’, 2007, ISBN 978-0-642-79014-9 (HTML version) and Keast, Jackie, ‘Lack of National Register Leaving Banks Unclear on Power of Attorney’, Australian Ageing Agenda, July 24, 2015

https://www.australianageingagenda.com.au/2015/07/24/lack-of-national-register-leaving-banks-unclear-on-power-of-attorney/

[5] Recommendation 5-3, Chapter 5 ‘Enduring appointments’, Australian Law Reform Commission, ‘Elder Abuse, A National Legal Response, June 2017

[6] University of Western Sydney, Cognitive Decline Partnership Centre, Council on the Ageing (COTA) NSW, “NHMRC Partnership Centre On Dealing With Cognitive And Related Functional Decline In Older People (Cdpc) Final Report: The Policies And Practices Of Financial Institutions Around Substitute Decision Making”, Annual Report 2014, https://sydney.edu.au/medicine/cdpc/documents/contact/2014-annual-report-summary.pdf

[7] Video available online at http://togethermakingchange.org.au/videos/ “Elder abuse and policing: what is best practice” (Brian’s question is at 44mins)

[8] ‘Criminal Justice Responses’, ALRC Elder Abusereport 2017, p. 365

[9] Video available online at http://togethermakingchange.org.au/videos/ “Elder abuse and policing: what is best practice” (Brian’s question is at approximately 44 mins)

[10] Lewis, R “Fill the gap in elder abuse responses with an Elder Justice Law”, National Elder Abuse Conference 2018: Together Making Change, and “Elder Law in Australia”, Launch, Parliament House, Sydney, NSW, 4 April 2012 http://www.supremecourt.justice.nsw.gov.au/Documents/Publications/Speeches/Pre-2015%20Speeches/Bergin/bergin_20120404.pdf

Minor Wills – Do you have to be over 18 to make a will?

Posted on14, March 201825, September 2018AuthorKerin Cotchett

As well as being “of sound mind” or having testamentary capacity to make a Will, a will-maker (also known as a “testator”) must also be an adult. That means your teenager’s threat of disinheritance scribbled on a napkin will not be legally binding – phew! But what if you do want to make a Will for a young person?

In special circumstances, a person under the age of eighteen years may be permitted to make a legally enforceable Will. For example, the child may have inherited a large sum of money from a relative, or, the child may have received a personal injury payment.

Legally, the only way to make a Will for a person under the age of eighteen years is to make an application to the Supreme Court under the Succession Act 2006 (NSW).^[1] The requirements for making an application to the Supreme Court for a minor Will include:-

The will-maker must be under 18 years of age and represented by a legal guardian;
The minor will-maker must understand the nature and effect of the proposed Will;
There must be reasonable circumstances that would permit the Court to make an order allowing the minor to make a Will, such as:

(a) It would not be appropriate, if the minor was to die without a Will, for their estate to be distributed to those entitled under the usual intestacy laws (e.g. where there is no Will the estate will go to the spouse or children of the deceased first, then to the parents, then siblings, then grandparents, then other relatives); or

(b) There are no living relatives.

Those parties affected by the application must be served with notice of the application (i.e. anyone excluded in the minor will-maker’s proposed Will who would be entitled to the minor’s estate under the intestacy rules must be made aware of the application)

It is also possible for the ACT and NSW Supreme Courts to permit a Will to be made for a minor who does not have testamentary capacity.^[2]

If you believe you or a young person under your care requires a Will, elringtons, with its team of dedicated lawyers, is here to assist. Please contact one of our friendly solicitors on 02 6206 1300 or info@elringtons.com.au to discuss at your convenience.

[1] Section 16 Succession Act 2006 (NSW)

[2] Section 16A Wills Act 1968 (ACT) and Section 18 Succession Act 2006 (NSW)