Partner providing Q & A on the 2GB Chris Smith Afternoon Show discussing issues in relation to Wills & Estate Law 30/05/13

Thursday, 30 May 2013

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Luke    26 minutes after 1 o’clock.  A few weeks ago in Smithies legal segment with Turner Freeman, Paul Sant was in the studio taking your calls on wills and estates and from what Chris’ producers have told me, the lines went into what we like to call here, meltdown!  So, we thought we better get Paul back in the studio to continue our discussion on wills and estates and open up the lines to you on 131873.  Paul, good afternoon.

PS       Good afternoon Luke.

Luke    Nice to talk to you.  The whole area of Wills and estates I think is a little complicated by the ability to walk into a newsagent, get the Will kit and think happy days.  And I reckon that whole process is fraught with danger.  Am I right?  And obviously don’t defend your profession…am I right or wrong?

PS       Definitely right.  The number of home made wills that have created problems and cost people a lot of money is absolutely amazing.

Luke    Ok, so primarily, what’s the drama with a home made Will if you will?

PS       Non-compliance with the formal requirements that a Will meets.  Now, there’ve been some amendments to overcome…you know, perhaps you only have one witness instead of two but I had one recently where…a home made, he appointed X his executor and that’s it.  He didn’t say who was going to get the estate.

Luke    Oh, ok.  So what happens in that instance?

PS       Well, luckily, we discovered another document which we submitted as an informal Will.  It clearly indicated he wanted to leave the estate to a certain person and we submitted that to the Probate Court and they accepted it.

Luke    Now, in relation to that, I suppose if you’ve got to get what you just called an informal Will, should there be an objection, I’m thinking that an informal Will would be a lot easier to object to from another interested party than a properly executed one, is that right?

PS       Definitely.  In that particular case, we actually had an agreement between all the people who couldn’t make claims and we all agreed that we would go a certain way.  We were very lucky in that instance.

Luke    Alright, line 1, Ben’s there.  G’day Ben, how you doing?

C1       How you going gentlemen?

Luke    Good.

C1       My situation’s a little bit left of centre than what you guys are currently on.  My current situation is, I’m actually the executor as well as guardian for my father.  He’s just recently widowed and he’s given me a power of attorney over his estate and what not but he’s indicated to me that he would like to re-enter into the dating scene at some stage to find companionship which is all well and good but we just wanted to more or less know, are there any measures we can sort of take in order to protect his assets?

Luke    We get the picture Ben.  Just hang on there mate.  Paul, have you got a take on that?

PS       Look, if you’re talking about pre-nuptials, there is a case presently before, I think, the Full Court, it might have even gone to the High Court where the Federal Attorney General has been given leave to appear and they’re testing the whole validity of this prenuptial provision under the Family Law Act.  I can tell you that most lawyers who practice in the family law field, a lot of them do not do prenuptials.

Luke    Oh, does that help you out at all Ben in any way?

C1       Well, if he doesn’t have a pre-nuptial, does that pretty much put him up the creek?

Luke    Only if he’s a bad chooser of partners I would imagine.

PS       Look, if all depends the person’s status when he passes away.  Were they living together in a de facto relationship?  Was she financially dependent upon him?  Were they married?  Once they’re married, the rights of a spouse are pretty well significant and remember, if he marries, he must do a new Will because marriage revokes Wills.

C1       Right, ok.

Luke    Ok, Ben, thanks for your call.  131873 the open line number.  You said something interesting there, in relation to the power of the spouse.  If there’s no Will, is the spouse normally looked after or can it be a disaster?

PS       No, the spouse is looked after.  There’ve been some significant changes to what happens in intestacy but they have preserved…

Luke    What was that word mate?

PS       Intestacy mate, sorry I keep going into legal jargon.

Luke    No, but I like it.  What is intestacy?

PS       Intestacy is when you die without a Will.

Luke    Right.

PS       So when you haven’t got a valid Will, you’re dying what’s called “intestant” and then there’s an Act called the Succession Act that says, well in this case, this is what’s going to happen.  Now it used to be, if you had a spouse, the spouse gets it.  If you didn’t have a spouse, it goes to your children.  If you didn’t have children, it goes to your parents etc.

Luke    Good yeah.

PS       But there’ve been these significant changes that have now recognised multiple house holdings so, if someone passes away and has a spouse and children, children from that one relationship, your spouse gets it.  But in cases where there’s spouse, there’s children but there’s children from another relationship then all these other things come into play, it’s sort of half split and now they recognise you can have two spouses so it’s interesting times.

Luke    It’s potentially a mind field isn’t it which comes back to my opening point about the Wills you might buy in a newsagent and complete.  You want to be sure you get it right.  Tell me about joint tenancy and relation to what that does with assets in joint names and how they become passed to the survivor?

PS       Look, it’s very interesting that so many people don’t understand the effect of buying something in joint tenancy and I had an email from one of your listeners actually this week on that point.  If you buy a property as joint tenants, not just joint names, it has to be joint tenants.  When one dies, the share passes to the survivor.  Full stop.  Your will might say, I give everything to the dogs home or whatever you wanted to put in the Will but that asset passes to the survivor.

Luke    Right.

PS       Now but there’s a second way of holding it.  It’s not joint tenants, it’s called tenants in common.  Now that’s different.  If you hold a property as tenants in common in let’s say equal shares, husband and wife.  Husband passes away.  His share goes in accordance with his Will.  It does not pass by way of right of survivorship.  A lot of people don’t understand the difference.  Sometimes people…often, people will buy property, let’s say before they get married.  They buy it as tenants in common, they forget about it.  They may think that, 20 years down the track, oh well if my spouse dies, I’ll get the property.  Well, not quite.

Luke    So, what do you do then.  When you’re buying a property.  You and your partner, you and your wife and it’s got both of your names on the mortgage document for example, what does that imply, have you already made the choice, tenants in common or joint tenancy?

PS       It’s different.  The title on the real property is either joint tenants or tenants in common.  The liability on the mortgage is joint, it means basically joint tenancy.

Luke    Ok, so on the title of the property, is that something decided by the conveyancor and consult with clients how you end up?

PS       Correct.  That’s exactly it.

Luke    So you made that call.  But is there a way then that they generally advise you to go or does it alter?

PS       Usually if they’re married, everyone will buy it…usually they’ll buy it as joint tenants.

Luke    Right.

PS       If they are, let’s say, planning to live together and they’re planning to marry…or let’s say they don’t live together.  They’ve been going out for X number of years and they plan to get married, I mean I’d tend to advise them…buy it as tenants in common because if something happens and the relationship breaks up, the property is still in joint names, one party dies well then the other party inherits.

Luke    Yeah, alright.  131873 the number to call.  We’re with Paul Sant from Turner Freeman and we are talking amongst other things about Wills and estates.  Give us a call 131873.

 

Absolutely 131873 is that open line number.  We are talking Wills and Estates.  It’s our…Smithies I should say…legal segment on a Thursday afternoon with Turner Freeman Lawyers.  Paul Sant is with us today.  131873.  Boy, we’ve triggered off an avalanche of callers here so let’s hook in Paul and we’ll come back and talk about the other issues we’d started.  Marie or Maree on line 2?

C2       Yes, Marie.

Luke    Nice to talk to you, go ahead.

C2       Hi, I was just wondering, if a couple were separated but not divorced and a new Will was written, would the Court respect that new Will or not?

PS       Yes.  Well, the Probate Court or the Supreme Court will grant probate in accordance with that Will.  But, if you’re separated, remember under the Family Provision sections of the Succession Act, a spouse…can make a claim if she can show dependency or needs.

C2       But if a spouse was to make a claim and that spouse has more because the settlement has not occurred, would that impact?

PS       Sorry, did you say…what…a family law property settlement had not occurred?

C2       Yes.

PS       Look, one of the requirements to make a claim under the Family Provision sections is you need to show…you have to show need.  I mean, if the spouse happened to be a multi-millionaire or millionairess, it would be very hard for her to make a claim on the spouses estate, assuming it was a modest estate.

C2       Ok.

Luke    Alright Marie, thanks for your call, best of luck.  Email from Randall:

Email   “Paul made the statement that marriage revokes a Will.  Does divorce also revoke a Will?”

PS       Ah, good question.  Divorce doesn’t revoke a Will but it revokes the section where you leave a bequest to your ex-spouse.  So, you’ve made a Will leaving part to your wife, you then get divorced.  That section is revoked.  The rest of the Will is fine.

Luke    Wow, there you go, great question.  Fascinating answer.  Del in Canberra, good afternoon.

C3       Yes, good afternoon.  Look, my ex-husband passed away five and a half years ago, my children still have not got their inheritance, my son has engaged his own solicitor at $490 an hour and he doesn’t seem to be any better than the solicitor in Melbourne who is handling the Will.  What can we do?

PS       Well, you say, five and a half years ago.  Was there a Will?

C3       Course there was.

PS       There was a Will.  And they were beneficiaries in the Will?

C3       There was a Will with two executors, one of whom has died.  The solicitor in Melbourne says he doesn’t know where the other executor is, although she has family in Melbourne and he could easily find out.

PS       Oh so what you’re saying to me is that he’s passed away, he left a Will and no executor is doing anything about the estate?

C3       Well it appeared they did until he died and now I don’t know what’s happening and we keep getting told from the Melbourne solicitor, oh it’s gone to the Taxation Department, oh I’ve made a mistake, no it hasn’t…quite frankly, I would try to get the fraud squad in.  I don’t know what to do.

Luke    Well that’s a serious problem.  How does Del get some sort of resolution?

PS       She could perhaps contact the Professional Legal Society down there.  If an executor is not performing or administering the estate, a beneficiary can make an application to the Court to take it over.

C3       We know that but we’ve got to get permission from everybody and we can’t find my sister-in-law.  I’m sure she’s living in Melbourne somewhere.

Luke    Has that been the problem, if you don’t mind me asking, Del but for five and a half years you haven’t been able to find your sister-in-law?

C3       No, she was around and then when we’ve complained, he said, oh well, it’s up to the executor and then we found that the executor was my brother-in-law and his wife, that’s my husband’s sister, which I think was a mistake in the first place.  However, one of them died and then we were told well that was the problem because he didn’t do anything and now we’re told that it’s gone back to the Taxation Department.  I have been in touch with the Taxation Department and, quite frankly, they’re not allowed to tell me anything but the man did whisper to me that he thought they’d finished with it.

Luke    Alright, well, Del just look, Paul is shaking is head mate, go ahead.

PS       I think it might be a good idea you give me a call on our 1800 number.  I think it’s a little bit more complicated than what I first thought.

Luke    Righto, Del, we’ll take your call back and we’ll get some details and make sure you’ve got Paul’s and he’ll give you a view off the air.  It sounds very complicated and…does it sound unusual?

PS       I’ve had instances, particularly, yeah in other States where it’s been taking a long time and we have to sort of wheel the stick a bit and we get it finalised, yeah.

Luke    Margaret is next up, hi Margaret.

C4       Hello, how are you?

Luke    We’re well thanks.

PS       Good thanks Margaret.

Luke    Go ahead.

C4       Now, I bought a house in 1988 and it’s totally in my name and then I remarried in 1976.  Now, the husband didn’t want his name in the house at all and he’s passed away now and he has two children.  Have they got any chance of the house?

PS       How long has he passed away?

C4       Only in February this year.

Luke    Sorry to hear that Margaret.

C4       So am I.

PS       Did he leave a Will?

C4       Oh yes we both left a Will.

PS       Leaving to each other.

C4       Yes.

PS       Look, the entitlements of a spouse are basically paramount.  If the children make a claim, the court will favour the spouse primarily over the children.  And listen, they’ve got to look at the facts and if the property was owned by you before your marriage, I mean the chances are the court taking any part away to the children would be unlikely.

C4       Yes.

PS       Look, it depends on need.  You know, the big factor on needs.  I mean, it depends on the children.  Were they adult children or are they minor children.  Were they financially dependent upon him?

C4       No, well when we married, he didn’t want the house in his name as well as mine.

PS       No, sorry actually, I retract my…what I’ve just said to you.  That property was yours, it’s got nothing to do with him.

C4       No.

PS       No, that’s fine, it was your property, it doesn’t form part of his estate, there’s nothing they can claim.

C4       No, I think he didn’t want any part of it at all because he knew the children were always after money.

PS       It’s your property, it has nothing to do with his estate.

C4       Ok.

Luke    Alright Margaret, best of luck for the future, thank you for your call.  Jean, you’re next up, hi.

C5       Hi.

Luke    Go ahead.

C5       Yeah, look, my mother passed away about five years this July and my sister that was the executor of the Will, she’s passed away over 20 years ago and my brother’s not answering any calls and we can’t get any satisfaction out of it.

PS       Ok, your mother passed away about five years ago?

C5       Yes.

PS       Did she leave a Will?

C5       Yes, there’s a Will.

PS       And the executor named in the Will passed away beforehand you tell me?

C5       Yes.

PS       Was there an alternative executor?

C5       No, my brother just had power of attorney.

PS       Power of attorney ceases on death so having power of attorney’s not going to help you or help him.

C5       So, how do we go about getting a copy of the Will now?

PS       No, getting a copy of the Will is under the changes to the Succession Act, a spouse, child or anyone like that, can ask for and is entitled to a copy of a Will or any other previous Wills so that part…it’s in the Act, and no executor can refuse it.

C5       Right.

PS       Or they can try but you can easily fix that.  So, once you get the Will, if there’s no executor appointed then what happens is a beneficiary…someone’s asked to have an interest in the estate.  One of the beneficiaries can apply to get what they call a Grant with Will annexed…Grant of Probate or Letters of Administration with the Will annexed.  So, the first part of the Will has fallen through because there’s no…has fallen down because there’s no living executor but one of the beneficiaries or someone who’s got an entitlement in the estate can put their hand up.  Usually you get the consents of the other beneficiaries but not necessarily…as long as you prove service on all the other entitled parties, a court will then grant Letters of Administration in accordance with that Will.

C5       I’ve been told by the solicitor that made…that wrote the Will, that my brother had been down and got another copy of it and they haven’t got a Will now.

PS       What, the original Will?

C5       Yeah, so how do we go about that?  And it’s going to cost us between $10,000-$20,000 to get it organised.  It’s only a house that’s involved in it.

Luke    Righto.  Jean, is that, again, one of those off-air things?

PS       I think so.  It’s starting to become more complicated as we get into it.

Luke    Righto Jean, stay there, don’t go away.  Back with more calls in a moment 12 to 2.

 

10 to 2 We’ll get back to the news of the day soon.  Paul Sant with me from Turner Freeman for Smithies legal segment.  Paul, let’s get back to callers.  We’ve got Joan from Canberra there on line 7, Joan?

C6       Oh good afternoon gentlemen.

Luke    Good afternoon.

PS       Good afternoon.

C6       Recently, I’ve made a Will leaving one of my five children out of it because of the large debt that he owes me and has never paid a cent over the last 20 years of it.  In the Will it’s written that the debts were given on mine and my husband’s death but I understand that he can still contest that.  Can I put in there something to the effect that the debt is not forgiven if the Will is contested?

PS       Good question.  Look, if…

Luke    It must be good…you’re taking your time mate.

PS       Because I’ve thought of that a number of times, actually for a number of clients.

Luke    Right.

PS       In those circumstances, it is vital that there is some evidence to say why you’re leaving one of your children out, such as, in the Will, I’ve done this because I’ve benefitted him during his life or a separate statement that says on such and such a date I advanced this because, if anyone does make a claim, that evidence can be admitted and a court takes that into account.

Luke    Right.

PS       Now, a clause along the lines that, if he contests then the debt is not forgiven.  You can try it, I’ve just got a feeling that court might think that’s probably against public policy.  It’s like the clauses that people want to put in that if so and so contest then the gift I’ve given him or the little gift I’ve given him well then that goes out the door.  You know, the courts will say, hold on that’s not appropriate or that’s not public policy.

Luke    Oh ok, alright, thanks Joan, hopefully that helps.  Louie at old Toon Gabby, hello Louie.

C7       G’day fellas, how are you?

PS       Well.

Luke    Yeah, well mate, go ahead.

C7       Alright, I want to know, is it possible to purposefully leave a child out of a Will?  If you’ve got a group of children, 3 or 4 children and one of them has always been…never asks questions, never showed up…you just don’t want to leave that person anything.

PS       Look, the first point is this.  It’s your Will, you can provide in your Will what you want to.  So, yes, you could make a Will and leave XY and Z out of the Will.  The problem is that there’s this legislation…the Succession Act, in the Family Provision Section, that says that if certain people fall within certain categories, one of them being a child then nothing you can do can stop them from making a claim on your estate.  And a court will determine their entitlement based on their needs, ok?  So, you have a child who happens to be, as I said before, a multi-millionaire, doesn’t have any needs, leave him out of the Will?  I think it would be difficult for him to make the claim.  Have a child you isn’t well-off, has needs, they’ll make a claim and, you know, it depends on a whole bunch of factors.  They’d be entitled to a share of the estate, even though your Will provides otherwise.

Luke    Alright Louie, we’ll leave it there…we’re nearly out of time.  Rob in Hornsby, g’day Rob.

C7       How are you?

Luke    Good.

PS       Well.

Luke    Go ahead.

C7       Good.  Long story, quick.  Parents divorced many many years ago, both remarried, father moved away with his new wife to the ACT, subsequently before he died he chopped the three sons out of his Will, his wife was obviously the beneficiary, she died not long after unfortunately and the two step-daughters ended up with everything.  Is there anything we can contest there?

PS       How long back did the father die?

C7       This would be coming up to three years.

PS       Alright, so you’re outside the time limitation which is 12 months from the date of death.

C7       Ok, I thought so.

PS       So, he died, everything passed to his wife and then she died and everything passed to her children.  The question is whether you’ve got a claim on her estate.  I’m assuming you never lived with them as a child and was never financially dependent upon them?

C7       No.

PS       Then it would be very difficult.

C7       Ok.

Luke    Righto Rob, there you go.  I kind of wish we had better news for him but it’s the law isn’t it…and what about we go to Maureen at Sans Souci quickly before we wrap things up.  Maureen, hi.

C8       Oh, hello.  It’s quite complicated.  My brother died in 2004, left an unsigned Will, he lived and worked in a country north of Australia for 20 years, had a partner there and two children.  Now, in the Will, my sister and I were to manage it because it was unsigned, nothing was done.  Anyway, this is 2013, probate is being granted but because it was a large estate and complicated but the estate has not been handed over because they think that the person who comes from another country and now lives in Australia is not capable of handling the affairs.

Luke    Alright, now we’re going to bump into news and things here and, you’re right, that’s a lot more complicated than what it says here…I think one of the questions you had was once probate has been granted, is there any reason why it can’t be handed over so I’ll put that question to you Paul.

PS       Well, once probate is granted then it’s up to the executors to call in the estate, work out the liabilities of the estate and distribute.  It’s usually, you know, assuming that the 12 month period has expired for claims to be made and no claim is made then it’s pretty well sailing but it depends upon the complication and the nature of the estate.  Some of them take a bit of time to wind up.

Luke    Alright, how do people contact you Paul?

PS       Mate, they can ring me on 1800 800 088.

Luke    Paul Sant from Turner Freeman Lawyers, news is next.