Appointment of Executors and Trustees in your Will
The appointment of an executor and trustee is an important decision. Without proper consideration, unintended issues can arise.
The role of an executor in your Will is to administer an estate. This means that the executor becomes responsible for arranging the funeral and burial/cremation, liquidating/transferring assets and attending to the payment of debts. The executor must always act in the best interests of the estate and attempt to resolve any disputes either about the Will or the estate generally.
The role of a trustee in your Will is to manage assets on behalf of a beneficiary after the estate administration has been finalised. For example, a beneficiary may be under the age of 18 years when you die. The role of the trustee is to manage the bequest of that beneficiary until they reach the age chosen by you for receiving their funds.
Some important information to consider when choosing an executor and trustee are:
- Always choose someone you completely trust;
- Do not nominate a professional (e.g a lawyer, accountant or public trustee company) unless you have discussed what fees they propose to charge, and you are willing for your estate to pay those fees after your death;
- Keep in mind that executors can claim commission which is based on the value of the assets of your estate;
- No more than four people can be nominated as executors in the first instance. The greater the number, the greater the difficulty in achieving a unanimous agreement on issues, particularly if they are siblings who do not get along. A large number of executors and trustees can also increase costs if they live far apart;
- If possible, do not nominate a person who resides overseas. This can create difficulties administering the estate if they are unable to travel. It can also cause unintended tax consequences; and
- Have a backup executor in case your first choice dies before you or is unable to accept the role.
If you are unsure whether the executor and trustee you have chosen is appropriate, contact our Wills and Estates solicitors in Queensland today to arrange an appointment.
Your estate is your legacy. It is therefore important to nominate people who will honour your wishes and act in the best interests of your beneficiaries.
Appointment of Guardians in your Will
When you have a child under the age of 18 years, it is important to consider whom you would like to appoint as their guardian in the event of your death.
Appointing a testamentary guardian does not mean the child will automatically live with the guardian upon your death. Rather, the child will reside with the surviving parent. The testamentary guardian will only be responsible for long-term care decisions of your child if your Will states that they are to act in conjunction with the surviving parent.
In the event both biological parents have passed away, the testamentary guardian will be able to have custody of the child and make day-to-day, as well as long-term, decisions for the child.
Failure to appoint a testamentary guardian in your Will could result in people with a ‘sufficient interest’ in the well-being of the child, having to apply to the Family Court to be appointed as the child’s guardian. This can be time-consuming, stressful, and expensive. It can also lead to disputes between relatives from both sides of a family, as they try to agree on what is in the best interests of the child from their own perspectives.
If you have a child under the age of 18 years, and wish to consider appointing a guardian in your Will, we recommend you contact Dillon Legal, a law firm on the Gold Coast which specialises in drafting Wills. Call to make an appointment.
Testamentary Trusts in your Will
A testamentary trust is a trust which is activated upon your death by your Will. Once activated, it acts like a normal inter vivos trust in that the appointor of the trust has the power to appoint or remove a trustee, the trustee has the power to manage and distribute trust assets and the beneficiaries are either specific or discretionary.
Testamentary trusts can have multiple benefits, the most obvious being tax. Some other benefits of a testamentary trust include:
- It can provide a layer of protection for your beneficiary if they are at risk of bankruptcy, or a family law proceeding or have difficulty managing their finances;
- It can provide taxation benefits for beneficiaries who are high-income earners; and
- It can provide a layer of asset protection for your children if there is a likelihood your spouse will enter into a new relationship after you die.
Testamentary trusts can be customised to your needs to ensure they provide the level of protection that is required for your circumstances.
If you feel a testamentary trust in your Will is appropriate to your needs, contact our Gold Coast law firm today to arrange a consultation.
Special Disability Trust in your Will
A Special Disability Trust is a unique type of trust created by the Government to provide social security means test concessions for a beneficiary who suffers from a severe disability. The trust is designed to provide an opportunity for financial provision to be made to a beneficiary for their current and future care and accommodation needs without it impacting their means test concessions such as their disability pension, health care card and government housing.
A Special Disability Trust can either be created by Trust Deed or by Will and it must contain the key terms of a model trust deed which is reviewed and updated by the Department of Families, Housing, Community Services and Indigenous Affairs.
A Special Disability Trust is a complex trust with advantages and disadvantages that vary depending upon the circumstances of each beneficiary. Rules and regulations surrounding the Trust mean that legal advice is strongly recommended when considering such a trust as it is important to ensure it meets all legislative requirements to provide maximum benefit and protection for the beneficiary.
If you care for a person with a severe disability and feel a Special Disability Trust may be an option for your estate plan.
Mutual Wills
Mutual Wills are a unique type of contract regarding a Will. It is an agreement between two people who have made Wills in similar terms that they will not change all or part of their Wills without the written consent of the other person. This means if one person dies or loses capacity, the other person cannot change all or part of their Will.
Generally, Mutual Wills are sought by people who are in a subsequent marriage, and they wish to ensure their children from a prior relationship will receive a portion of their estate upon the death of the surviving spouse.
The purpose of a Mutual Will is to protect respective interests. They work by ensuring that if a gift is made for a beneficiary, it cannot be removed by the will maker without the consent of the other person who made the Will in similar terms. The Deed of Mutual Wills also provides that the parties cannot diminish their estate, for example, by giving away assets during their lifetime.
Although Mutual Wills do provide protection for beneficiaries, they can be a problem as they are inflexible, and if a major change in circumstances arises, the surviving will maker cannot change their Will. For example, if a beneficiary dies, they cannot be removed from the Will and another beneficiary nominated in their place.
If you feel a Mutual Will is appropriate to your circumstances, we recommend you contact our Gold Coast wills and Estates lawyers for advice.
Life Estates & Rights to Reside in your Will
In certain circumstances a life estate or a right to reside in a property may be appropriate.
A life estate and right to reside are similar concepts. They provide a nominated person with the ability to continue to reside in your property after your death. Ownership of the property will vest in your executor or trustee until the life estate or right to reside comes to an end. Ownership will then pass in accordance with the terms of your Will.
A life estate is an interest in land that enables the nominated person to reside in the property and/or use it for income producing purposes. Sometimes the life tenant may wish to sell their interest in the property.
A right to reside allows the beneficiary to occupation of the property only.
Conditions concerning the occupation of the property, and when the life estate or right to reside will end, can be drafted according to your own wishes.
Both concepts have advantages and disadvantages. Generally, a life estate or right to reside is considered as an option when the testator would like a second spouse to continue to reside in the property but, ultimately, have ownership of the property pass to the children of their first marriage.
The disadvantages of a life estate or right to reside are twofold. First, both concepts have the potential to impact the Centrelink pension of the beneficiary if the life estate or right to reside is not accepted (disclaimed) or terminated early by the beneficiary. There are also sometimes stamp duty implications. Second, both concepts have traditionally been inflexible to the changing needs of the beneficiary. This can result in situations where the beneficiary is forced to remain in a property that is inappropriate to their needs.
If you feel a life estate or right to reside is appropriate in your will for your circumstances, we recommend you contact our Gold Coast wills and Estate solicitors today.
Statutory Wills in Queensland
In certain situations, the Supreme Court of Queensland has the power to authorise the making of a Will for a person under the age of 18 years or for a person who lacks testamentary capacity.
A Statutory Will is appropriate in circumstances where the minor or the person who lacks testamentary capacity has significant wealth, and if they were to pass away without a Will, their estate would be distributed in a way that would not be desirable for that person.
In both situations, the proposed Will must reflect the intentions of the minor or be a document the relevant person would make if they had testamentary capacity. The guiding principle being that whatever is done must be for the benefit, and in the interests, of the relevant person.
If granted, a Statutory Will is valid and will have the same effect as if an adult or person with testamentary capacity had made a Will.
As an Application for a Statutory Will requires the satisfaction of several conditions, including the production of a draft Will for consideration by the court. As such, it is always recommended that legal advice be sought.
If you are a minor or a person who cares for a person who lacks testamentary capacity, we recommend you contact our Gold Coast wills and Estates solicitors today to discuss the prospect of obtaining a Statutory Will, and the legal costs involved.
Intestacy (Dying Without a Will)
If you were to pass away without a valid Will in Queensland, your estate will be distributed according to the rules of intestacy, irrespective of what the deceased may have wanted or intended.
The people who will be eligible to administer your estate are determined in order of priority. The person with the highest priority is a spouse (including a de facto) followed by children, then grandchildren or great-grandchildren, then parents and so on.
Regarding entitlement to the proceeds of an estate, legislation also governs the way an estate is distributed. For example, if a deceased is survived by a spouse and children, the spouse is currently entitled to $150,000 and the household contents. The balance of the estate is then divided equally between the spouse and children.
Situations often arise where the deceased was separated but not divorced from their spouse. Without a formal order from the court, the deceased is considered still legally married, and the estate will pass to their former partner even if they had not been in contact with each other for several years.
In contrast, even if still happily married, being forced to share the residuary estate with their children often leaves a surviving spouse with insufficient funds. This can cause significant stress for the spouse who then must pursue a family provision claim against the estate to increase their entitlement.
To ensure your estate is administered and distributed according to your wishes, it is important that a valid Will be signed. Instructing a legal practitioner to prepare a Will for you might be an expense initially, but it will save significant stress and expense for your beneficiaries after your death.
If you do not need a new will, we recommend you contact our Wills and Estate Lawyers located in Robina to arrange a consultation.
Informal Wills
An Informal Will is a document which does not satisfy the legal requirements for a valid Will. For example, the Will:
- was written on a computer or mobile phone;
- was not signed or witnessed by two witnesses;
- contains amendments which were not witnessed;
- was written in different colour pens; or
- does not appoint an executor or distribute the entire estate.
If a Will does not meet legal requirements, it will be necessary to apply to the court for a determination about its validity. If held to be invalid, the deceased will be considered to have died without a Will and the rules of intestacy will apply.
If you have a Will and are unsure whether it is valid, we recommend you contact our Gold Coast wills and Estates law firm today on (07) 5575 9990 to arrange an appointment.
Enduring Power of Attorney
An Enduring Power of Attorney is a document which will only apply during your lifetime. Upon your death, your Attorney should no longer access any of your assets (even to pay your debts) as they will fall within the control of the executor of your estate pursuant to the terms of your Will.
An Enduring Power of Attorney is an important document as it enables your Attorney to make health, personal and/or financial decisions on your behalf whilst you are alive. The power can range from choosing where you live (eg at home, respite, hospice or nursing home) to managing your bank accounts and investments. The Attorney you choose should therefore be someone whom you trust. The Attorney must also be a person who would be capable of managing your affairs for an extended period, if required.
Once activated, an Attorney will be responsible for making decisions which are solely in your best interests. Failure to do so could result in consequences for the Attorney, such as their removal.
End of Life Decisions
Whilst you can include wishes and directions for your Attorney in your Enduring Power of Attorney, a request for your Attorney to agree to voluntary assisted dying in the event of a terminal diagnosis cannot be included. To undertake voluntary assisted dying, you must have capacity throughout the entirety of the process. The decisions cannot be delegated to another person. Should you have any concerns about your treatment or care in the event of a terminal diagnosis, we recommend you complete an Advance Health Directive.
If you have any queries regarding an Enduring Power of Attorney, we recommend you contact our Gold Coast wills and Estates lawyers to obtain advice.
General Power of Attorney
If you have a company, you may want to appoint someone to act on your behalf if you are incapacitated or overseas.
We can review the constitution of the company and advise you if a General Power of Attorney is appropriate for your circumstances.
Advance Health Directive
Advance Health Directives are documents which enable you to direct your end-of-life care decisions. They can form an integral part of your estate plan as you are able to control your preferences for future care including your beliefs, values and goals.
We particularly recommend an Advance Health Directive:
- prior to any significant medical intervention;
- if you are elderly;
- if you do not have any relatives or people whom you trust to make decisions on your behalf;
- if you are concerned that your family may disagree with your decisions; or
- if you wish to remove the burden of decision-making upon your family.
At Dillon Legal, we can provide assistance and guidance concerning your advance health directive Your General Practitioner will be required to provide you with any medical advice and assist you with completion of the form.
If you are unsure whether an Advance Health Directive is appropriate for you, contact Dillon Legal wills and Estates lawyers today for advice.
