Do you need a testamentary trust?

Posted on May 22nd, 2015

By Robert Lindsay

Robert Lindsay is a Director at Mullane & Lindsay in Newcastle and leads our Commercial & Property Law team.

Often the reason a Testamentary Trust is included in a Will is to enable the beneficiaries of the trust to save tax. However, a Testamentary Trust can have other benefits. If a potential beneficiary of a Will suffers from an addiction or is unable to control his or her spending then the Testator should consider paying the share that the beneficiary would otherwise have received into a trust and appointing a responsible third party as trustee of the trust. The trustee will have the power to pay part or all of the income of the trust to the beneficiary at his or her discretion. Naturally, if the trustee considers that the beneficiary is asking for money for unnecessary purposes then the trustee can refuse payments. If however the trustee believes that the money will be used responsibly then payments can be made to the beneficiary. If the trust provides for the payment of capital then at some time in the future, the trustee may use his or her discretion to provide accommodation for the beneficiary.

By introducing a trust and a responsible third party to act as the trustee, the Testator (ie the Will maker) is putting in place the checks and balances to ensure that the beneficiaries’ entitlement under the Will is not wasted and is available for the long term benefit of the beneficiary.

Robert Lindsay is a Director at Mullane & Lindsay, and practises extensively in Commercial Law, Property Law and Wills & Estate Planning. If you require any assistance in this area please contact Robert Lindsay to arrange a consultation or contact our Newcastle office. 

Superannuation and binding death benefit nominations

Posted on May 22nd, 2015

By Robert Lindsay

Robert Lindsay is a Director at Mullane & Lindsay in Newcastle and leads our Commercial & Property Law team.

Many individuals or families have their own self managed superannuation funds (SMSF). Superannuation is paid after a member’s death at the discretion of the Trustee of the fund. However, if the Trust Deed creating the superannuation fund provides for a Binding Death Benefit Nomination then a member of a fund can direct the Trustee of the superannuation fund how the superannuation should be paid in the event of the member’s death. The member can remove the discretion of the Trustee. However, it is very important to ensure that the Binding Death Benefit Nomination form is valid. The recent decision of Munro v Munro in the Supreme Court of Queensland is a reminder of the care that is required. In that case Mr Munro, a retired solicitor established a self managed superannuation fund in 2004 with his wife and himself as Trustees. In 2009 he signed what purported to be a Binding Death Benefit Nomination in favour of “the Trustee of Deceased Estate”. Unfortunately, however the Nomination failed. Clause 31.2 (b) of the Trust Deed creating the superannuation fund provided that the Nomination in a Binding Death Benefit Nomination form must be in favour of one or more nominated dependents or the legal personal representative of the member. Read the rest of this entry »

Can a carer contest a will?

Posted on May 15th, 2015

By Robert Lindsay

Robert Lindsay is a Director at Mullane & Lindsay in Newcastle and leads our Commercial & Property Law team.

Under Section 57 of the Succession Act, a person with whom the deceased was living in a close personal relationship at the time of the deceased person’s death is a person eligible to make a claim under the provisions of the Succession Act 2006. A carer of the deceased can, in some circumstances, be deemed to be an eligible person. To be an eligible person the carer must live under the same roof as the deceased person. Also, the carer must not be providing services for reward. Sometimes there are circumstances where two people reside together and one of them provides services in the nature of care to the other, however the relationship does not constitute a de facto relationship. Read the rest of this entry »

Incorporating policies into employment contracts

Posted on May 8th, 2015

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

A banking executive who was made redundant on the merger of two banks, has succeeded in a multi million dollar redundancy claim based on a policy he was not aware of during his employment but which, the Court said, formed part of the employment contract.

Mr James worked for AMRO prior to its merger with Royal Bank of Scotland in about 2008.  AMRO’s redundancy policy allowed 4 weeks pay for each year of service, plus an “ex gratia” payment.  The evidence showed that, in practice, well performing senior employees were almost invariably paid the ex gratia sum even though it was technically discretionary. Read the rest of this entry »

Security for payment claims – Insolvent contractors beware

Posted on May 1st, 2015

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

One object of (state) security for payment legislation is so that contractors can maintain cash flow during projects.  One means of achieving that object is to prevent principals on whom a claim payment is made, from arguing they have a “set off” claim against the contractor.

However the position can be different if the contractor, being a company, becomes insolvent.  In the case of insolvency, the (Commonwealth) Corporations legislation specifically permits set offs against claims by insolvent companies. Read the rest of this entry »

Application for divorce

Posted on April 20th, 2015

by Rose Laffan

Rose Laffan is a Senior Solicitor at Mullane & Lindsay in Newcastle and practises extensively in Family, Relationship and Matrimonial Law

With the introduction of the Family Law Act in 1975 the principal of no-fault divorce was established in Australia.

This means that when an Application for Divorce is made the Court does not consider why the marriage ended. The only consideration is that the marriage has broken down irretrievably – that there is no reasonable likelihood of the parties reconciling their relationship.

How does the Court determine that the marriage has broken down irretrievably? The criteria used is that the parties have been separated for 12 months and one day.

Read the rest of this entry »

Helping elderly parents manage their money – Some traps

Posted on April 17th, 2015

by Felicity Wardhaugh

Felicity Wardhaugh is a Special Counsel at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

A recent case of Fulton v Fulton [2014] NSWSC 619 in the Supreme Court of New South Wales highlights how money can cause bitter family disputes.   The case was heard in the Supreme Court for 6 days: an expensive exercise best avoided.

The dispute arose after the death of a father.  He died leaving four adult sons.  Three of the sons alleged that the fourth son (A) had taken approximately half a million dollars out of the father’s bank account whilst he was still alive.  The father had allowed A access to his bank accounts primarily to pay bills for him.

Read the rest of this entry »

Who can inspect your will?

Posted on April 17th, 2015

by Lana Black

Lana Black is a Solicitor at Mullane & Lindsay and practises primarily in  Commercial & Property Law.

While you are living no one other than yourself is entitled to inspect your will; of course this does not prevent you from allowing someone to inspect your will while you are living. But what happens after you die; who can inspect your will then?

Prior to 1 March 2007 a deceased person’s will could only be inspected (after the deceased person died) with the consent of the Executor appointed by the will. If Probate of the will was subsequently obtained, the will would become part of the public record at the time, however if Probate was not required, the Executor could potentially keep the terms of the will confidential. The Succession Act has, however, introduced provision for a significant number of people to have the right to receive a copy of a deceased person’s will.

Read the rest of this entry »

Guarantees by wives – Some risks

Posted on April 10th, 2015

 

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

Particularly since the GFC, the Courts frequently deal with claims by borrowers or guarantors who seek to be relieved of loan or guarantee obligations because they were misled or pressured into signing documents, or because they were taken advantage of. A particular ‘subset’ of these claims involves claims by wives, or female de-facto partners, who have guaranteed debts of their husband or of their husband’s company. Claims in this category are generally made by reference to the 1939 High Court decision of Yerkey v Jones [1].

Read the rest of this entry »

Court resources under strain

Posted on April 3rd, 2015

by Rose Laffan

Rose Laffan is a Senior Solicitor at Mullane & Lindsay in Newcastle and practises extensively in Family, Relationship and Matrimonial Law

Recently the Australian Bureau of Statistics released statistics showing that the case load between the Family Court and the Federal Circuit Court (known as the FCC) in 2012/2013 stood at 86% in the FCC and 14% in the Family Court.

While there may be a division of work between the two Courts both deal with incredibly important issues relating to the breakdown of a relationship or marriage, including who is to care for children and how people are to divide their assets. Delays in having the Courts determine such matters has an impact on the lives of the parties, their children and everyone in their extended family and support network.

Read the rest of this entry »

“You can sort it out when I’m gone!”

Posted on April 2nd, 2015

by Felicity Wardhaugh

Felicity Wardhaugh is a Special Counsel at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

The NSW Supreme Court in Re RB, a protected estate family settlement [2015] NSWSC 70 recently found solutions to the problem of an 80 year old Husband who had become incapable of managing his affairs and who had not written a will.   He was in a nursing home with a prognosis of no more than 6 months to live.  He lacked mental capacity to make a will.  Read the rest of this entry »

More on the new drink driving penalties

Posted on March 27th, 2015

by Lana Black

Lana Black is a Solicitor at Mullane & Lindsay and practises primarily in  Commercial & Property Law.

Further to our recent article ‘A Must Know – The New Drink Driving Penalties’, the following table provides details of the new disqualification periods and interlock periods imposed for serious and repeat drink driving offences:

Read the rest of this entry »

Trends in family court filings

Posted on March 19th, 2015

by Mark Sullivan

Mark Sullivan is a Director at Mullane & Lindsay in Newcastle and specialises in Family, Relationship and Matrimonial Law

In February 2015 the Australian Institute of Family Studies released a report analysing trends in family law court filings over a 9 year period between 2004-05 and 2012-13.

The report sheds light on the impact on court filings of the 2006 parenting reforms.  These reforms encouraged greater use of non-court based mechanisms (such as mediation counseling) for resolving parenting disputes and placed hurdles to curb parents commencing court proceedings.  Read the rest of this entry »

Ambiguity in commercial contracts

Posted on March 13th, 2015

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

Generally, where the terms and conditions in a commercial contract are clear, they are enforceable as drafted. However from time to time, Courts have looked at evidence about “surrounding circumstances” to determine precisely what contractual terms mean, where those provisions are ambiguous. The best known decision in this area is Codelfa which, amongst tother things, stands for the proposition that a Court must be satisfied a contractual provision is ambiguous before it can consider surrounding or extrinsic circumstances, and if it is not satisfied as to ambiguity it may not do so. Read the rest of this entry »

What is a case guardian?

Posted on March 6th, 2015

by Rose Laffan

Rose Laffan is a Senior Solicitor at Mullane & Lindsay in Newcastle and practises extensively in Family, Relationship and Matrimonial Law

Occasionally a question will arise as to whether a party has the necessary capacity to make their own legal decisions following the breakdown of a relationship or marriage.

Should the party’s treating doctor or a specialist state that the person does not have capacity but the proceedings or action needs to continue, it will be necessary to consider the appointment of a Case Guardian. Read the rest of this entry »

What are “personal effects” in a will?

Posted on March 5th, 2015

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

Early in 2015 the NSW Supreme Court dealt with a dispute in which a widow argued that, properly understood, her late husband’s gift to her of ‘household furniture and furnishings and personal effects’ meant she should receive a motor vehicle, shares, money in bank accounts and on term deposit; and what appear to have been some convertible notes.

The case hinged on the legal meaning of the phrase ‘personal effects’. The widow argued that, because the disclosed estate property did not refer to household furniture and furnishings or items such as clothing, watches, accessories or appliances, the expression ‘personal effects’ must have been intended, in that context, to refer to things like bank accounts and share holdings. Read the rest of this entry »

Total and permanent disability insurance

Posted on February 27th, 2015

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

Many Australians now have Total and Permanent Disability Insurance (TPD), particularly self employed individuals. Commonly, TPD is arranged through a superannuation fund and both the fund trustee and the insurer have to be satisfied of an entitlement to a policy benefit before it will be paid.

In Banovic v United Super Pty Ltd [2014] NSW SC 1470, a manual labourer who injured an arm made a claim for a TPD benefit. Eligibility depended on him proving that he was unlikely to ever be able to engage in “any” occupation for which he was suited, by reason of ‘education, training or experience’. The medical evidence showed he would never return to heavy labouring; but the claim was declined on the basis that there were other jobs, that were less physically demanding, that Mr Banovic could still perform. Read the rest of this entry »

The vexed question of hire car costs

Posted on February 27th, 2015

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

Imagine your car is involved in a crash and is off the road for an extended period. You need that car for your day to day activities such as going to work, taking the kids to school and so on. You hire a replacement vehicle while your car is being repaired and then try to recover the hiring costs from the driver at fault, or their insurer. Can you recover the whole of the hiring cost, or will you be left out of pocket?

Because the dollar value of claims of this kind is relatively small, decided cases are often in the Local Court rather than in superior Courts. Local Court decisions (particularly in its Small Claims division) do not have the same precedent value as, say, a Court of Appeal decision, but they can still be instructive. Read the rest of this entry »

SMSF & Family Law: Be alert!

Posted on February 26th, 2015

by Mark Sullivan

Mark Sullivan is a Director at Mullane & Lindsay in Newcastle and specialises in Family, Relationship and Matrimonial Law

New laws applying to SMSF contraventions commenced after 1 July 2014 and imposed administrative penalties, education directions and rectification directions on defaulting trustees.  Trustees can be personally liable for penalties of up to $10,200 per breach and may be directed by the ATO to rectify the contravention and undertake an SMSF education course.

If your relationship has broken down and you have an SMSF with your ex partner/spouse then be on notice that your responsibilities as a trustee or trustee director continue until your SMSF is wound up, or you have rolled your interest out of the fund into some other complying Fund and resigned as a director/trustee.  You are therefore still at risk and need to act with care and diligence. Read the rest of this entry »

Do not rely on an informal will

Posted on February 20th, 2015

By Michael McGrath

Michael McGrath is a Director at Mullane & Lindsay in Newcastle and specialises in our Commercial, Property & Estates Law Team.

A recent decision of the Supreme Court of NSW serves as a timely reminder of the importance of having a legally valid Will and not relying on an informal document to carry out your wishes on death.

Under the Succession Act, the Court can recognise a document which appears to contain a deceased’s wishes as their Will, notwithstanding that all formal requirements have not been met. The Court must be satisfied however that the deceased intended the informal document to be their Will.

In the case of Burge v Burge [2014] NSWSC 1772, the deceased had previously made a legally valid Will with his solicitor in 1983, under which his spouse was his sole beneficiary. In 2007, the deceased made handwritten alterations to an unexecuted copy of his 1983 Will, including amending the sole beneficiary to now be his son. He initialled next to the changes and at the foot of the document, inserted the date and signed his name. His signature was not however witnessed as required for a legally valid Will.

The deceased’s spouse sought to administer the estate under the terms of the 1983 Will under which she was the sole beneficiary. The deceased’s son however sought an order that the amendments made in 2007 constituted the deceased’s informal Will and that the estate should therefore be administered under the terms of the 2007 informal Will, under which he was the sole beneficiary.

After much legal argument, the Court ultimately held the amendments made in 2007 did not constitute the deceased’s informal Will and therefore the estate was administered in accordance with the 1983 Will. The Court found that having previously executed a legally valid Will, the deceased would have been aware of the requirements for a legally valid Will and there was no reason that he couldn’t have arranged to make a new Will which complied with these legal requirements prior to his death in 2013. In the absence of other evidence as to the deceased’s intentions, the Court was not satisfied that the deceased intended the amendments made in 2007 to constitute his Will.

Michael McGrath is a Director at Mullane & Lindsay, and practises extensively in Commercial, Property & Estates Law. If you require any assistance in these areas please contact Michael McGrath or contact our Newcastle office.