Issues to consider with these ‘informal’ arrangements:

1. When real property (land and buildings/improvements) is purchased in joint names, both owners are equally responsible to repay the mortgage to the bank. This means that if one party does not repay the mortgage, the bank will still require the other party to repay it;
2.  When one party chooses to individually repay the mortgage, the bank will consider this to be a new loan application, requiring that party to go through the finance process again; and
3. Absent any ‘formal’ Family Court Order governing the marriage separation:
   • The transfer of the property will attract stamp duty on the one-half share despite no money changing hands. In some situations, the stamp duty can run into thousands of dollars. (For example, if you are transferring a property valued at $1 million, the stamp duty for transferring 50% could be over $10,000);
   • Any ‘informal’ arrangement cannot be enforced against the party agreeing to repay the mortgage if he/she fails to fulfil his/her promise. (For example, if the party agreeing to repay the mortgage fails to do so, the bank will still require the other party to repay it and the courts cannot enforce any ‘informal’ arrangement between them).

The Benefits of ‘formal’ Family Court Orders:

• • Property transfers in a marriage separation will attract only nominal stamp duty in each State, which ranges from $20 to $100;
  • The ‘formal’ Family Court Order can be enforced against the party failing to fulfil his/her promise to repay the mortgage. (For example, if the party fails to repay the mortgage as set out in the Family Court Orders, the court may direct the bank to pursue the debt only against that party and not the other party).
  • ‘Formal’ Family Court Orders do not mean the parties have to go through acrimonious disputes between themselves, they can come to a mutually acceptable agreement referred to as Consent Orders by the Family Court of WA.

A separation may lead to people considering the following options:

1. Refinancing the mortgage to a single name in place of both names. – However, with the changes in the lending landscape, the bank may require significant information from and assessments of any party before agreeing to any refinance.
2. Selling the real property as part of the separation process. – The current property market conditions are such that you may not receive the value for the property that you expect/wish, leaving you to decide how to deal with any shortfall.
3. Updating or setting up a Will and/or an Enduring Power of Attorney/Guardianship

The key takeaway message is to seek legal and tax advice and assistance before agreeing to any division of marital assets post-separation and to achieve an amicable settlement.

Please contact us. if you are in this situation or if you just have questions that we can assist with.

The post How to Transfer Property in a Marriage Separation appeared first on AustAsia Group.

Succession Planning is much more than just having a valid Will and remains very relevant in these extraordinary times as everyday life has become uncertain and precious. It is something you should address now, don’t wait until it’s too late. It can:

• Provide certainty that your children from a current and/or previous marriage and/or your stepchildren are taken care of;
• Provide certainty by getting the right assets into the hands of the right people, at the right time; and
• Enable you to provide for your loved ones while minimising the tax payable by your nominated beneficiaries.

We strongly recommend to our clients to consider the protections of these legal documents:

1. An Enduring Power of Attorney (EPA) by which you appoint a person to manage your financial affairs should you be incapacitated in the future;
2. An Enduring Power of Guardianship (EPG) by which you appoint a person to make lifestyle decisions on your behalf should you be incapacitated;
3. An Advanced Health Directive (AHD);
4. Superannuation Binding Death Nominations;
5. Life Insurance proceeds; and
6. A Will.

Please click on the following links to AAG Fact Sheets published on our website, for more detailed information on these topics:

Personal Succession Planning

Enduring Power of Attorney, Enduring Power of Guardianship and Advanced Health Directive

Binding Death Nominations

Protecting your most Important Asset: You

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One positive note to come out of this situation is that it has given businesses and individuals some unexpected “free” time to consider matters that may have remained ‘shelved’ until now – a legal health check if you like.

It presents an opportunity to work on your business rather than in your business.

With payments to businesses either delayed or defaulting, we recommend our business clients to consider their:

1. Debt collection procedures;
2. Terms and conditions of trade;
3. Asset protection;

Or, consider putting some formal procedures in place for the first time, if you don’t already have them

Debt Collection Procedures

Businesses will need to reconsider their current debt recovery procedures as the following laws have temporarily changed:

• Statutory Demands
  • – The time for payment has been extended from 21 days to 6 months
  • – An increase in the threshold owed before issuing the demand (from $2,000 to $20,000).
• Bankruptcy notices
  • – The time for compliance has been extended from 21 days to 6 months
  • – An increase in the threshold owed for a creditor to initiate bankruptcy proceedings (from $5,000 to $20,000).

Here is a link to a Government Covid19 Fact Sheet on this topic:

Providing temporary relief for financially distressed businesses

Terms and Conditions of Trade

Businesses must expect delays in payments from their debtors and must consider the following issues when negotiating payment terms with their debtors:

• Draw up a written Loan Agreement with your problem debtors;
• Take security for the debt owed in the Loan Agreement by registering your interest with the PPSR (Personal Property Securities Register) to get the benefit of being a preferential creditor;
• Despite being delayed, specify the dates for payment of a debt in writing as arrangements such as “I will pay you when I get paid” are vague, ambiguous and unenforceable.

Asset Protection

Now more than ever, it’s very important to have plans in place to safeguard the business you’ve built up over many years, covering key issues such as:

• How can a business’ main assets like real property, equipment or intellectual property be protected?
• As a director or business owner, have you safeguarded your personal and family assets from creditors?
• Is my structure the most tax-effective?

See also The 4 Principles of Business Structure & Asset Protection

For more, here are links to two Business Succession Planning articles that we published in 2019:

The Importance of Business Succession Planning

Business Succession Planning

The post Now is the perfect time to do a Legal Health Check appeared first on AustAsia Group.

• You can make provision for your choice of funeral rites, organ donation and who will look after your children when you die.
• You can also make provision for who will receive specific assets from your estate.

If you already have a will, you have recently separately, you have remarried or your family circumstances have changed you should consider updating your will.

If you don’t have a will

• Your assets are divided according to the Administration Act 1903 (WA).
• If the family home is in your name only, your spouse will not automatically inherit the family home.
• If you are separated from your spouse, they can benefit from your estate.
• Your de facto spouse, stepchildren and same sex partners are excluded from benefiting from your estate.
• You have no choice of executor.
• You have no say in what happens to your hard-earned assets.
• It is likely to cause hardship for those you leave behind.

If you don’t have a will, contact us. for assistance.

Click here to download this article in PDF format.

The post Wills appeared first on AustAsia Group.

This statement is usually used to encourage people who are losing enthusiasm for a task or goal.

But it also reflects the way many people feel about personal succession planning. They think that so long as you have a Will, your wealth will be passed correctly to your family and your loved ones will be taken care of.

But this is not necessarily the case. Personal succession planning is much more than just having a Will, especially for blended families and families with stepchildren.

Did you know that in 2012/2013, in Australia, step and blended families accounted for approximately 6% of all families¹ with children under 18. The days where mum, dad, and 2-3 blood children made up the average Australian family are a thing of the past.

Often people in blended families – with their second or third spouse – want to ensure their children of an earlier marriage are provided for or ensure a former spouse cannot access their Estate.

Here are a few important questions that you may relate to if you had a former relationship, have a blended family or live with stepchildren:

• Have you had a legally binding property settlement following the breakdown of former relationship/s?
• Have you removed your former spouse as a joint owner where assets were purchased in joint names previously?
• Do you have any financial responsibilities from any former relationships?
• Have you updated all beneficiary nominations on investments and policies which name your former spouse as the beneficiary?
• Do you have vulnerable beneficiaries (such as beneficiaries dealing with separation/divorce, beneficiaries facing addiction or with special needs)?
• In the event of your death, would you like to provide for your children from a previous and/or current relationship or provide for stepchildren?
• Is there anyone who may have a claim on your estate, who you do not wish to benefit from your death (such as an ex-spouse or a vulnerable beneficiary)?
• Would you like your estate assets to be held in trust for your children and be distributed to them at a certain age?
• Are there any assets you wish to retain within the family bloodline?

Without an appropriate succession plan, you may not have certainty that the right assets will go to the right people at the right time in the most tax effective way.

Do I need a personal succession plan?

Personal succession planning is something all parents should consider and address. By doing so you’ll ensure loved ones have access to appropriate financial assistance, educational opportunities, and anything else they might need to ensure their quality of life continues when you’re no longer around.

At a minimum, every parent should have:

• A current Will to distribute estate assets;
• Guardianship arrangements for young children and teenagers;
• An Enduring Power of Attorney to cover situations where they’re unable to make financial decisions themselves; and
• Appropriate estate planning arrangements to distribute specific assets that are not covered by the Will (such as superannuation benefits, life insurance proceeds, assets held in family trust/s).

What are the benefits of personal succession planning when you have a blended/stepfamily?

Personal succession planning can:

• Provide certainty that your children from a previous and/or current marriage and/or your stepchildren are taken care of;
• Provide certainty by getting the right assets in the hands of the right people, at the right time; and
• Enable you to provide for your loved ones while minimising tax payable by your nominated beneficiaries.

What are the consequences of NOT having a personal succession plan?

Personal succession is something you should address now. Don’t wait until it’s too late.

If you have previously nominated your ex-spouse to be the executor and beneficiary of your Estate and/or the beneficiary of your superannuation or life insurance and if you die without updating your nomination, the proceeds from these policies may be distributed to your ex-spouse which may not reflect your wishes.

If you die without a valid Will, intestacy legislation will determine how your estate assets are distributed to your surviving family members.

And, if you’re badly injured in an accident or lose mental capacity, who will manage your affairs while you’re still alive but unable to make your own decisions?

How can we help you?

AustAsia Group provides advice on tax, legal matters, financial matters, superannuation, and investments. So we are able to assist you to:

• Ensure you’re making the right ownership decisions when acquiring new assets or re-structuring your existing assets. For example, your financial adviser can help you determine whether it’s best to invest in your name, your partner’s name, or jointly with your partner. We may consider your situation to investigate further tax and legal advice to consider another arrangement such as a trust or company.
• Determine if you have sufficient means to achieve your estate planning objectives. Additional life insurance inside or outside of superannuation may be necessary to provide your family and loved ones with a lump sum payment or an income stream to repay debts, meet ongoing living expenses and cover your children’s future education costs when you’re no longer around.
• Make a provision in your Will to allow for the establishment of testamentary trust/s for minor children. The establishment of testamentary trust in a Will can provide flexibility and can enable distribution of estate assets in a tax-effective way to beneficiaries including children from previous marriages, young children and teenagers. A reliable Trustee of your choice will ensure that distributions are made to such beneficiaries with their welfare in mind.
• Make a provision in your Will to allow for the establishment of testamentary trust/s for adult children. The establishment of testamentary trusts in a Will can provide asset protection in the event of a relationship breakdown and/or bankruptcy.
• Develop a range of strategies to provide certainty, tax efficiency and/or asset protection. For example, your financial adviser can explain superannuation death benefit and life insurance beneficiary nomination options. By making appropriate nominations now, your beneficiaries will be able to effectively and efficiently receive the death benefits when you’re no longer around.

AustAsia Group is able to assist you with all of your estate planning and succession planning requirements.

¹ Australian Bureau of Statistics, Family Characteristics and Transitions 2012-2013, Families with children aged 0-17. Release date 26 February 2015.

Click here to download this article in PDF format.

The post Personal Succession Planning appeared first on AustAsia Group.

If you do not have a will and you pass away then you will be considered to have passed away “intestate”. For any of your assets to be distributed an interested party would need to make an application to the Supreme Court for Letters of Administration which could include your former spouse who may be able to argue they should receive some or all of your estate.

Have you recently gone through a separation? If so you should consider:

1. Preparing a new Will;
2. Revoking any existing Enduring Power of Attorney and preparing a new Enduring Power of Attorney; and
3. Reviewing and amending your Binding Death Nomination of your superannuation fund to protect your assets.

Please contact us. for further information.

Click here to download this article in PDF format.

The post Things to Consider Post Separation appeared first on AustAsia Group.

Click here to download this article in PDF format.

The post Security Interest in Personal Property appeared first on AustAsia Group.

You need to be sure of the position. There are different obligations depending on the situation. If you are the “employer” you can be personally liable to who you may have thought was a contractor but is actually an employee if those obligations are not met.

If a dispute occurs you need to know your position.

The Test

The test used by the Courts has now changed. The Court used to only consider who had more control to determine if the relationship was an employee or that of a contractor.

The Courts consider 5 key factors in determining if someone is a contractor or an employee:

1. Control; Greater control by the boss indicates employee relationship, whilst an employer exercising little control indicates a contractor;
2. Payment; payment on a regular basis (employee) as opposed to payment for particular service (contractor);
3. Delegation; Contractors can delegate work to others, an employee does the job personally;
4. Commercial risks; contractors carry their own insurance and bears the cost of the defects in their work – usually an employee does not; and
5. Responsibility for equipment; contractors pay for their equipment, employees are supplied with equipment or are reimbursed.

This new test blurs the line.

What you need to do

Employers need to exercise caution as failure to do so may result in the employer’s liability for:

• Superannuation;
• Payroll tax;
• Holiday leave and sick leave;
• Workers compensation;
• Back pay;
• Unfair dismissal; and
• Long Service leave.

Employees also need to be aware of their obligations and rights.

There is no obligation for the above to be paid for contractors – but there is for employees.

AustAsia, together with our legal partners can assist you with preparing the relevant documents to ensure the relationship is properly recorded.

The post Contractor vs Employee appeared first on AustAsia Group.

The post Do you need an Advanced Health Directive? appeared first on AustAsia Group.

An EPG comes into effect only if you are unable to make reasonable judgments about personal matters (including your living arrangements) and medical matters, which is required (this ability is referred to as “capacity”).

Guardian or Guardians

You can appoint:

1. One person to be your Enduring Guardian with an alternative person to act as your Enduring Guardian, in the event that the person appointed is unable to act as your Enduring Guardian; or
2. Two persons to be your Enduring Guardians together.

An Enduring Guardian can make decisions in the areas, or functions, specified in their appointment. The most common functions are to make decisions with respect to:

• Where to live;
• Healthcare;
• Which personal services are required; and
• Who you associate with.

There are some functions an Enduring Guardian cannot undertake:

• Voting on your behalf;
• Making decisions about the care or wellbeing of the your children;
• Making (or revoke) a will;
• Make (or revoke) an Enduring Power of Attorney;
• Consent to a marriage or a sexual relationship or the dissolution of a marriage;
• Make decisions about adoption of a child;
• Enter into surrogacy arrangements;
• Manage the principal’s estate on their death; and
• Consent to an unlawful act.

When deciding on whom to appoint, you should consider who would best understand your values and wishes, and who would have the skills to make good decisions for you.

Planning ahead includes thinking about a time when you might need help with everyday life, such as shopping or housework. You may need extra care at home, or you might need to move to a nursing home or hostel.

Appointing an Enduring Guardian is a good way to plan ahead for possible changes in your ability to manage everyday life.

You can appoint one or more Enduring Guardians to make decisions about your care, accommodation and health needs if you ever lose the capacity to make these decisions yourself.

It is best if you talk to your Enduring Guardians about your wishes.

How do I appoint an Enduring Guardian?

If you want to appoint an Enduring Guardian, you must complete a form of appointment, which we can assist you with.

The person(s) you appoint as your Enduring Guardian(s) must also sign the form to show that they have agreed to be your guardian.

All signatures on the form must be witnessed by an eligible witness. An eligible witness is a legal practitioner, Registrar of the Local Court.

You may wish to plan your future medical care according to your beliefs, values and preferences. You can do this by preparing an Advanced Health Directive. See “DO YOU NEED AN ADVANCED HEALTH DIRECTIVE?”

Please note that neither an AHD nor an Enduring Power of Guardianship will cover your financial affairs so you may also need an Enduring Power of Attorney. See “DO YOU NEED AN ENDURING POWER OF ATTORNEY?”

Click here to download this article in PDF format.

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