Wills & Estates

Estate planning is more than just a part of your financial plan. It’s a long-term strategy that reduces stress on your family and outlines what happens to your wealth and investments when you pass away.

A complete Estate Plan involves:

• Looking at your assets, investments and estate holistically;
• Nominating decision makers to act on your behalf;
• Ensuring that the ownership of your assets is passed on to the correct beneficiaries;
• Ensuring that your assets are protected in case a beneficiary has legal problems;
• Reducing tax payable to an absolute minimum;
• Ensure your medical care is dealt with in accordance with your wishes; and
• Creating a (legally binding) Will.

A Will is the only document you will ever sign which deals with everything you own, and that makes it just about the most important document you will ever sign. A Will should be carefully planned and drafted to ensure that your wishes are accurately recorded and can be carried out in the most efficient and tax effective way possible.

By making a Will, you can:

• Make sure your spouse (or de facto), and children benefit the most from your assets;
• Choose your own executor – someone you trust to manage and distribute the assets from your estate; and
• Spare your loved ones the additional grief and distress that may result from the uncertainty of not having a Will and quite often, additional time and expense in administering your estate.

An Executor is the person or organisation appointed by you to be responsible to manage your assets and carry out the directions you make in your Will when you pass away. 

Executors look after some (or all) of the following tasks:

• Locating the Will;
• Attending to funeral arrangements;
• Applying for probate (the document which proves the validity of a Will and gives an executor legal authority to deal with the estate);
• Paying debts of the estate;
• Collecting assets of the estate;
• Distributing the estate to beneficiaries in a timely manner;
• Preparing estate accounts;
• Lodging estate tax returns; and
• Defending claims against the estate.

When an Executor has completed all of their duties, their role ends. However, where a Will establishes a trust or trusts, the person nominated as executor will often also take on the role as trustee of those trusts. Alternatively, another person other than your executor can be appointed as trustee.

Trustees often look after some (or all) the tasks:

• Preserving and managing estate assets for minor beneficiaries until they reach 18 years of age;
• Preserving and managing estate assets until a beneficiary attains a specific age as nominated by the testator, for example, 30;
• Preserving and managing estate assets that have been placed into a testamentary trust established on the death of the testator; and
• Passing accounts and lodging tax returns for trusts created under a Will.

Whoever you appoint as your executor and/or trustee must be someone you trust and someone who has the ability to understand the obligations they have, to act in that role. It is important to consider that person’s age, skills and ability to obtain assistance with the administration of your estate. Often family, close friends, accountants, lawyers and financial advisors are appointed as executors and/or trustees.

A beneficiary of a Will is and person (or organisation) that is listed in your Will as being entitled to receive a defined portion or the entirety of your estate.

Testamentary trusts are discretionary trusts established in Wills, that allow the trustees of each trust to decide, from time to time, which of the nominated beneficiaries (if any) may receive the benefit of the distributions from that trust for any given period. 

Upon the death of a Will-maker, the assets of the deceased are distributed to the trustee (or trustees) of the testamentary trust that hold the assets for and on behalf of the nominated beneficiaries. The assets are not transferred to the individual beneficiaries directly, but rather to a trustee of the established testamentary trust that holds the assets in the trust fund, for and on behalf of the beneficiaries.

Testamentary trusts are designed to provide maximum flexibility, whilst both allowing for the tax-effective distribution of capital and income derived from the assets and providing a greater degree of asset protection.

A Testamentary Guardian is a person who is responsible for taking care of the child’s daily and long term needs if there is no surviving parent and there are no other court orders stating who the child shall live with.

Probate is the process of proving and registering the last Will of a deceased person in the Supreme Court of New South Wales.

Usually, the executor of a Will attends to this and obtains the Grant of Probate from the Supreme Court of New South Wales, after which, the executor is able to administer the estate of the deceased person in accordance with the deceased person’s wishes, contained in their last Will.

If a person dies without a valid Will or a Will cannot be located and/or an executor appointed under a Will is unable or unwilling to act, then an Application must be made to the Supreme Court of New South Wales for Letters of Administration. 

A Grant of Letters of Administration means the Administrator appointed by the Supreme Court of New South Wales can administer (deal with) the estate of the deceased person in the same way as an executor would.  

Generally speaking, there are two main areas to challenging a Will. Firstly, on the basis that the Will is not valid and secondly, where there has not been proper provision from the Estate of the Will-maker for an ‘eligible beneficiary’ also known as a ‘Family Provision Claim’. 

A challenge to a Will must be made within 12 months of the death of the Will-maker. 

In order to challenge a Will on the basis that it is not valid, the person (or persons) seeking to challenge the Will must be an ‘interested person’. 

An ‘interested person’ is a person (or persons) who was (were) named in a previous Will as an Executor or Beneficiary or are named in a final Will as a Beneficiary.

The grounds on which a Will may be challenged include (but are not limited to):

• The Will was not in writing;
• The Will was not signed by the Will-maker;
• The signature of the Will-maker was not witnessed by at least two adult witnesses;
• The Will-maker was not present when at least two witnesses signed (witnessed) the Will;
• When the will was signed by the Will maker and or the Witnesses, the Will-maker did not intend to execute a Will;
• The Will-maker did not have the capacity to make the Will; and
• The Will-maker was subjected to undue-influence when making the Will.

A person is able to challenge a Will of deceased person on the basis that they are an ‘eligible person’ to challenge the Will and the deceased person did not make adequate provision for their ‘maintenance, education and/or advancement in life’.

An ‘eligible person’ includes:

• The spouse of the deceased person at the time of their death;
• A person living in a de-facto relationship with the deceased person at the time of their death (including same sex relationships);
• The deceased’s child (including adopted children, but not step-children);
• The deceased’s former spouse (in limited circumstances);
• A person who was:
• dependant (either wholly or partly) on the deceased at a particular time;
• A grandchild of the deceased;
• A member of the household of the deceased;
• A person who lived in a close personal relationship with the deceased at the time of their death.

If a challenge has been made to a Will, it is the job of either the executor and/or beneficiary (or beneficiaries) to defend the challenged Will. 

All challenges (in NSW) to a Will (including a challenge to a Will on the basis that it is invalid or a Family Provision claim) are heard in the Supreme Court of New South Wales.

Defending a challenge to a Will is a highly specialised area and requires specialised advice relevant to the particular challenge being mounted. 

An appointment of an Enduring Power of Attorney is the appointment of a person appointed by you (whilst you have capacity) that manages your finances in the event that you lose capacity or are unable to attend to finalising matters personally. An attorney is able to deal with your assets in the same manner that you would deal with them (subject to any directions or limitations).

Unlike a General Power of Attorney, an Enduring Power of Attorney continues to operate in the event that you loSe capacity. 

Like an executor or a trustee, you should appoint someone as your Enduring Power of Attorney that you trust and who has the ability to understand the obligations they have, to act in that role. Often your spouse, an accountant, lawyer, business partner or close friend is appointed as your Enduring Power of Attorney.

You are also able to appoint more than one person as your Enduring Power of Attorney in which case, both attorneys must act jointly. 

Yes, you can. Often there are specific limitations or directions outlined in an Enduring Power of Attorney that dictate what an attorney an and can’t do, for example a limit on the amount of money an attorney can use for gifts from you to someone else. 

An appointment of an Enduring Guardian is the appointment of a person (or persons) appointed by you (whilst you have capacity) that manage medical decisions in the event that you lose capacity and are unable to do so yourself. 

An Enduring Guardian is able to make decisions about where you live, heath care, personal services that you receive (such as nursing) and consent to medical treatment. 

Like an executor or a trustee, you should appoint someone as your Enduring Guardian that you trust and you believe will make decisions in your best interests. Often your spouse, a family member or close friend is appointed as your Enduring Guardian.

You are also able to appoint more than one person as your Enduring Guardians in which case, both Guardians must act jointly. 

You are also able to appoint Substitute Enduring Guardians in case your first choice of Enduring Guardian (primary Guardian) is unable or unwilling to act.