AAG In Action: Leave a Legacy, not a Mess
AustAsia Legal Pty Ltd (a member of the AustAsia Group) is experienced in the preparation and administration of Wills and estates. Our many years of experience has proven that you need good legal advice before drafting your Will, to ensure that your Will is clear, accurate and valid.
We come across situations often where a Will has been prepared with the best of intentions, but it is unclear and has not been able to be distributed in the manner that the deceased person intended.
As Oscar Wilde once said, “It is always with the best intentions that the worst work is done.”
It is important to note in the preparation of a Will that:
Assets that you can include in your Will are:
- Assets that you own in your individual name only (such as land, car, jewellery);
- Assets that you own as a Tenant in Common with someone else;
- Shares that you own in your individual name; and
- Any assets held overseas in your individual name only.
Assets that you cannot include in your Will are:
- Any share of assets owned as a Joint Tenant with someone else;
- Assets which are held in family trusts, because they don’t belong to you but to the trusts;
- Superannuation, as it is not an asset of your estate as the monies may go to the beneficiaries nominated with the Superfund Trustee or at the discretion of the Superfund Trustee, unless there is a Binding Death Nomination which appoints your Executor (Legal Personal Representative) as the beneficiary;
- Life Insurance Policies, because the proceeds of the policy may be paid to the beneficiary nominated with the insurer.
Seeking good professional advice to assist with the preparation of your Will should protect your beneficiaries from arguments, a lot of time, stress and incurring significant legal costs in administering and distributing your estate.
One example of a costly disaster (we have experienced many more examples):
Recently, one of our long-time clients was appointed the Executor of their mother’s estate. Our client sought legal advice, clarification and assistance in relation to the administration of the mother’s estate.
Our client’s mother had only two relevant assets in her own name, being:
- The family home; and
- A personal bank account.
The Will had been prepared by the mother’s accountant and was incorrectly framed by purporting to include family trust assets and superannuation benefits in the will including:
- a small business operated by the family trust structure;
- a commercial property owned by the family trust;
- a residential investment property owned by the family trust;
- a bank account operated by the family trust; and
- superannuation funds controlled by a public Superannuation Fund Trustee.
Our client’s siblings disagreed with the way in which their mother’s assets had been set out to be left to the beneficiaries under the Will. There was considerable friction between our client and the siblings, as the Will was left open to interpretation and argument.
Some the errors which we found in the Will were:
- the Will incorrectly adopted the position that the assets held by the family trust are owned by the estate when, in fact, legally, the Executor of the estate has no right to possess assets or power to distribute assets owned by the Family Trust.
- the Will incorrectly provided for the business (operated by the family trust) to be provided to one of the children;
- the Will incorrectly attempted to set out the manner in which the superannuation monies were to be distributed between the beneficiaries, when, in fact, no Binding Death Nomination had been made directing the superannuation to go to the Estate, leaving the trustee of the Public Superannuation Fund with the responsibility to determine where the superannuation proceeds would go.
Our client was in an unenviable position. There was a legal dispute brewing in the family over the Will and the wishes of the mother, because there was uncertainty over what the mother wanted and the distribution of the assets to the children was not properly dealt with.
AustAsia in Action
- AustAsia Legal identified the assets held by the deceased in the mother’s name, those held by the family trust and the superannuation benefits.
- AustAsia Legal advised on distribution of the specific gifts of assets held by his mother to the beneficiaries nominated in the Will.
- AustAsia Legal advised the options available to resolve the separate (non-Will) issues with our client’s siblings.
- AustAsia Legal advised on an equitable distribution in value of the assets held in the family trust and the superannuation account.
- AustAsia Accounting Services provided advice in relation to the tax implications for all the beneficiaries of the estate
- AustAsia Legal represented our client as Executor of the Will in extensive negotiations with the siblings, other beneficiaries in the Will, and their respective legal representatives, as to an equitable resolution of the disputes.
AAG’s perseverance yielded a positive outcome for our client as well as the other beneficiaries, however, the significant cost could have been avoided if the Will had been drafted correctly in the first instance, and the overall position of the mother properly reviewed and understood.
We like to assist clients to save money, and avoid spending money unnecessarily on legal arguments. Other considerations such as Testamentary Trusts (which comes into existence when you pass away) may be relevant in some Wills. See our Fact Sheet on Testamentary Trusts.
For more information on this particular matter or any other legal concerns you may have, please contact us on (08) 9227 6300 or via email
Important information and disclaimer
This publication has been prepared by AustAsia Group, including AustAsia Legal Pty Ltd (ACN 123 160 476) and AustAsia Accounting Services Pty Ltd (Registered Tax Agent No 7587 3005).
AustAsia Accounting Services Pty Ltd and AustAsia Legal Pty Ltd – Liability limited by a scheme approved under Professional Standards Legislation.
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.
Information in this publication is accurate as at the date of writing, 2 May 2019. Some of the information may have been provided to us by third parties. Whilst it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way.
Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of AustAsia Group, nor their employees or directors give any warranty of accuracy, nor accept any responsibility, for any errors or omissions in this document.
Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.