Latest Legal Blogs : confessions of an estate planner
Confessions of an Estate Planner: Part 10 Laying to Rest
When we lose the ones we love The end of a life for one person and the start of a new one for their beloved and those left behind is usually experienced with a whole host of raw emotions. Shock, fear, sorrow, guilt, loss, melancholy, relief, anger, helplessness, hostility, bitterness, pain, nostalgia, resentment, despair, amongst others are often encountered (separately and all at once). It never isn't emotional. Some deaths come at the end of a long life or a long illness and are expected. That doesn’t make things any easier. Others are untimely and come suddenly in that they are as a result of a diagnosis of an incurable disease with limited time to live, or an accident or homicide or suicide (which no one saw coming). Or the deceased is very young or in the prime of their life. Everyone reacts differently and everyone reacts the same and often words just do not do justice and cannot describe everything that is happening of what is being felt. What should be said or done? What shouldn’t be said or done? Often just being there is what counts and all that is needed. Everyone is affected in different ways and at different times. Soon after a loved one or dear friend has departed there is a funeral and a wake to prepare for and attend. It usually is all a blur. It can be stressful (apart from everything else). And then comes the after ……. and the thought of it. It is very easy to sink into the quicksand of your thoughts. The unknown future is a daunting prospect.
Confessions of an Estate Planner: Part 9 - Easy Death
“I’m not afraid of dying… I just don’t want to be there when it happens” Woody Allen. It is not surprising (after reading Confessions Part 7 and being exposed to some of the real life stories from the (other) Royal Commission into Aged Care Quality and Safety) that we are hearing more and more about Euthanasia (a term derived from the greek word ‘euthanatos’ which means ‘easy death’. The fear of death is ingrained into all of us (natural selection dealing with those who were, unfortunately, not naturally averse to death many millions of years ago) but we all accept that at some point it inevitable. The acceptance grows as we grow older. When we were young it was never going to happen to us. I think it is fair to say that most people accept that they will die but what they fear the most is that they won’t get lucky and die in their sleep peacefully or otherwise quickly and painlessly. They dread a long illness and dying alone, in hospital connected to all sorts of very expensive machines and computers, in severe pain, suffering immeasurable indignities daily under sedation and without any privacy or empathy. To put it another way “a living hell”.
Confessions of an Estate Planner: Part 8 Enduring Powers of Attorney
I briefly touched on the topic of Enduring Powers of Attorney Part 7 (Crimes against the Elderly). Enduring Powers of Attorney (EPA) An enduring power of attorney enables you to appoint a representative to make financial (and other) decisions on your behalf, should you become incapacitated. It is a legal document in which you are able to nominate someone you trust to handle your affairs, should you lose the ability to make decisions for yourself. Without an enduring power of attorney, there may be nobody with legal authority to manage your affairs and make decisions on your behalf.
Confessions of an Estate Planner: Part 7 Crimes Against The Elderly
Unconscionable, Criminal and Invisible Taking advantage of the old, frail and vulnerable members of society is more prevalent now than it ever was. People are living longer, they have more money and many are developing mental illnesses such as Alzheimer’s Disease. It’s too easy and they are ripe for the picking. The property of the victim can be extracted from them by a variety of tried and tested ways including subtle manipulation, physical abuse, mental torture, undue influence, coercion as well as every day garden variety frauds and scams. It’s criminal. Although more often than not the conduct is not reported to the police due to embarrassment, lack of capacity or death. Even if reported, it is often quite difficult to secure a fraud (or other) conviction due to the required criminal burden of proof (i.e. beyond reasonable doubt) unable to be met. The conduct is always unconscionable even if a criminal conviction is not secured. Whilst difficult and costly, the civil courts and tribunals can put things right by making orders for damages and costs that penalise the offenders. And it is mostly invisible. It is happening in your neighbourhood or a retirement village near you every day. Right under your nose.
Confessions of an Estate Planner: Part 6 Estate Litigation - Claims of Children
If I ever was a child…… Estate Litigation This area of litigation is often called challenging a will. A will can of course be challenged if there is something wrong with it or how it was made or how it is to be read. At common law a willmaker is free to do as they wish. Just like anyone can decide to make a gift of something to someone during their lives. The common law has been changed by statute in most modern jurisdictions to allow certain eligible people (usually those closely related to the deceased) to be able to claim for better provision out of an estate (if adequate provision has not been made for them in circumstances where they should have been properly provided for). Societies demanded (and legislated many years ago) to protect the rights of wives and dependent children. This area of Estate Litigation is termed Testator's Family Maintenance and more recently Family Provision. Part 5 dealt with claims of spouses. This Part deals with the claims of children.
Confessions of an Estate Planner: Part 5 Estate Litigation - Claims of Spouses
Estate Litigation This area of litigation is often called challenging a will. A will can of course be challenged if there is something wrong with it or how it was made or how it is to be read. At common law a willmaker is free to do as they wish. Just like anyone can decide to make a gift of something to someone during their lives. The common law has been changed by statute in most modern jurisdictions to allow certain eligible people (usually those closely related to the deceased) to be able to claim for better provision out of an estate (if adequate provision has not been made for them in circumstances where they should have been properly provided for). Societies demanded (and legislated many years ago) to protect the rights of wives and dependent children. This area of Estate Litigation is termed Testator's Family Maintenance and more recently Family Provision. Part 5 deals with spouses.
Confessions of an Estate Planner: Part 4 Superannuation Litigation
Superannuation Death Benefits With many people holding a sizeable part of their retirement savings (and investments) in Superannuation, and given the increasing number of cases in the courts where Superannuation Death Benefits are in dispute, I thought it would be best to devote Part IV to this ever growing area of practice. What may seem very simple, simply isn’t that simple given the variety of factors that come into play. All you need is someone sufficiently motivated to put everything to the test. Every family situation is different. Every Super Fund is different. And, there is not, as some may have you believe, a ‘one size fits all’ strategy. There are as many strategies for just as many varying scenarios and no one issue is complex (but putting it all together can be). And if you think that your Will covers your Super think again. Absent a properly made Binding Nomination, the payment of Death Benefits from a Super Fund is almost always in the discretion of the Trustee of the Fund (so it does not matter what your Will says). The Questions Here are some questions you should ask yourself (and provide the answers to your advisor):- Do you want flexibility or do you want to lock things down forever? Do you have an SMSF or are you a member of a Retail/Industry or Public Sector Fund? Does your Fund Trust Deed provide that the payment of a Death Benefit is in the absolute discretion of the Trustee? (don’t be surprised here – most do); Will your spouse/former spouse/defacto spouse/children/step children/children of your defacto spouse be happy or unhappy with what you have done (or haven’t done)? How does this fit in with the Will you prepared 10 years ago when your account balance was not as big as it is now? Is there potential for a claim to be made that the person making the decision about a Death Benefit has a conflict of interest (i.e. they are also the executor of your estate and bound to pay it to the estate)? What does your last Death Benefit Nomination say? Is it consistent with your Will? Is it consistent with the pension your accountant got you to set up? Are the nominated beneficiaries legally able to be paid a Death Benefit? What is the tax treatment of whatever it is you have done (or not done)? The reassuring thing is that most people lead such uncomplicated lives that by and large none of this will ever concern them or affect their loved ones greatly. In saying this, the seeds of most bitterly fought Superannuation disputes are sowed years before during the development of a blended family (commonly the biological children of the deceased at war with the most recent spouse of the deceased). There are also often disputes about whether or not someone is a spouse or not. There is layer upon layer of regulation (and recent superior court decisions about the conflicts facing estate executors who are also Superannuation Fund Trustees) to make it a lawyer’s paradise. I think you will agree that this is a fantastically ripe environment for litigation/mediation/court hearing processes (not to mention angst, stress and all of their companions) to be generated. Not the best experience for your loved ones and something that can in the majority of cases be avoided.
Confessions of an Estate Planner: Part 3 An Uninsured Advisor
Part II Post Script: Before discussing the advisors you will be aware that the since Part II was published there has been a lot of public debate about the banks taking advantage of consumers. The Government has beefed up ASIC with $120,000,000.00 to go towards their watchdog functions. The Labor Opposition is calling for a Royal Commission. And the CBA is in the news again. The Financial Sector Union is alleging that CBA staff are being put under pressure to push products:- Click here to read "CBA staff pressured to push products, says Finance Sector Union" After a while it all starts sounding the same.
Confessions of an Estate Planner: Part 2 The Advisors
Part 2 - The Advisors Improving Australia’s Financial System “While consumers are responsible for the consequences of their financial decisions, they should be treated fairly. The financial services and products they purchase should perform in the way they are led to expect. Recent history provides a number of examples of product and advice failures. While the circumstances of each case differ, problems have arisen when commercial incentives have overridden consumer interests. We will do more to lift the standards of financial advisers, including by placing this activity on a professional footing for the first time. Following extensive stakeholder consultation, we will introduce legislation to make the issuers and distributors of financial products accountable for their offerings. This will ensure a stronger customer focus in product design and marketing. We will consult with stakeholders on the development of a new ASIC product intervention power that could be used to modify products, or if necessary, remove harmful products from the marketplace.” This is an extract from the Federal Government’s response (entitled “Improving Australia’s Financial System”) to the findings of the Financial Services Inquiry it commissioned in 2013. It was released on 20 October 2015. The full response can be found at this link, click here. The terms of reference of the Inquiry included the current cost, quality, safety and availability of financial services, products and capital for users. In late 2015 the Federal Government released draft legislation which requires that new financial planners will require a degree, undertake a professional year and pass examinations to be able to legally operate. Existing financial planners will be required to sign up to a code of ethics. An independent, industry-established body will be created from 1 July 2016 and will set education standards for existing planners who will be given until 1 July 2019 to complete an appropriate degree equivalent, if they do not already hold one.
Confessions of an Estate Planner: Part 1 The Estate Planning Conundrum
Part 1 - The Estate Planning Conundrum Retirement Planning (planning for your life after work) and Estate Planning (planning for the lives of others after your death) involve a mysterious web of rules, regulations and taxes overlayed on the family dynamic. Confusing to most and industries within themselves (where seemingly everyone not only the taxman is putting their hand in your pocket along the way and where you get different advice depending on the advisor and where everyone is telling you they know more than the others). There are conundrums and risks at every turn whether planning to live comfortably during your winter years or providing for your loved ones when you have departed. Getting your plan wrong can have disastrous consequences in this life and for your family in the generations to come. Getting it right can buy you something priceless. Peace of mind. If you are looking for a clear way forward the words that follow may be helpful. Behind despair hope is patiently waiting. Hopefully this confessional will help people:- gain a better understanding of the advice they receive make an informed decision to rely (or not) on that advice; assess whether or not they are getting value for money; make informed decisions about when and what they do in their planning (and see through the Estate Planning spin in its varying forms). It is a confessional as I have been witness to too many bad things. I need to clear the air, get it off my chest so to speak and tell the world. I am going to feel better once I have done this. I will attempt to provide a reality check and the right information on Enduring Powers of Attorney, Advance Health Directives, Estate Planning, Testamentary Trusts, Wills, Probate, Family Trusts, Family Law, protecting an Inheritance, Asset Protection, Estate Disputes, Estate Litigation, contesting Wills, Administration of Deceased Estates, Superannuation Death Benefits, SMSFs, Binding Death Benefit Directions & Nominations, Pensions, the Financial Planning Industry (including finding the right advisors) and the like. There is a lot of ground to cover and the confessions will come in instalments. There is too much to digest all at once. So let's start at the end - where we are now in 2016.