Viewpoint Autumn/Winter 2006 The newsletter for Australian Executor Trustees Limited clients What state is your estate in? Contents What state is your estate in? 1 My view: Andrew McLachlan 2 Case study: The need to have an up-to-date Will 2 Need professional advice 2 Learning from celebrity 3 Top ten excuses for not making a Will 3 Ask AET 4 Viewpoint survey results 4 Executor Assist 5 A charitable cause 5 AET welcomes our new s 6 Estate planning is important. You have worked hard to build your wealth but without effective estate planning that work may have been for nothing. The following checklist will help determine what estate planning issues you need to consider: Has your Will been reviewed in the last two years? Does your Will reflect any changed family situations eg. new grandchildren, divorce? Have you considered the most tax-effective way to pass on your wealth? Are your financial planning objectives considered in your Will? Do you have a trusted executor for your estate in place? Do you understand the different types of Powers of Attorney? Do you wish to give instructions regarding your funeral? Have you sold a property or moved to a retirement village since you last reviewed your Will? Have you thought about what would happen if you became unable to make decisions regarding your estate? Do you have complicated asset structures eg. DIY superannuation and are unsure what will happen to these on your death? Do you have a beneficiary with special needs? Have you considered the services of a professional executor or trustee? Estate planning is too important to be left to chance. There is a lot to consider, particularly if any of the above questions relate to you. Australian Executor Trustees can help you with these concerns and any others you may have. 1
Case study: The need to have an up-to-date Will Geoff and Lucy had recently married and were discussing their Wills with their financial adviser. My view We have received many positive comments about our Viewpoint newsletter written exclusively for clients of Australian Executor Trustees. We hope you will enjoy this edition as much as the last. It is not only extremely important to have a Will but it is also equally as important to keep that document up to date. Many events happen in life that can potentially affect how your wealth will be passed on to those closest to you. When planning the transfer of your wealth there are many issues to consider carefully. Our estate planning checklist helps you make sure you haven t missed any of the more important considerations. Australian Executor Trustees Estate Planning Consultants can offer you, and those close to you, assistance in developing a comprehensive estate plan that meets all your individual needs. This edition of Viewpoint also includes other articles from our leading s. If there is any topic you would like included in future editions or you would like to consult one of our s please contact us on 1800 882 218. All the best Andrew McLachlan They had lived together for many years and had made Wills three years ago. They were astounded when their financial adviser suggested that the Wills they had both made as a de facto couple may now be revoked by law following their marriage. Their financial adviser recommended they review their Wills with an Australian Executor Trustees estate planner. Their wills were reviewed and were found to be invalid. This meant that if either of them died without making a new Will, their estates would be divided according to a Government formula. If Geoff had died, Lucy would have to share his assets with his children from a previous marriage. The fact that Lucy was now pregnant brought home the urgent need to have their affairs in order. An Australian Executor Trustees estate planner worked with Geoff and Lucy to put new Wills in place. This ensured appropriate financial arrangements for the children from Geoff s previous marriage and separate arrangements for Lucy and their unborn child. Geoff s financial adviser organised additional life insurance to fund a testamentary trust for Lucy and the future education of their unborn child. Need professional advice? Have you reviewed your Will in the last two years? Have you made guardianship and financial arrangements for your minor children? Does your Will protect your beneficiaries inheritance in the event of a marriage breakdown within their family? Will your beneficiaries receive their inheritance in a tax-effective manner? Do you have an Enduring Power of Attorney in case you become incapable of looking after your affairs? If you can t answer yes to these questions, you may need to review your estate planning arrangements. For more information, talk to your adviser or contact Australian Executor Trustees. 2
Learning from celebrity: Restricting claims by beneficiaries History has shown numerous examples of high profile people having their Will contested. Frank Sinatra was married four times yet only his first and fourth wives were named as beneficiaries in his Will. Included in his Will was a lengthy No Contest Clause which meant that anyone who disputed his wishes would automatically receive nothing. This had the desired affect. In Australia, however, the law is different. Even though you may include a No Contest Clause in your Will it does not preclude certain parties from lodging a claim against your estate. Such a clause is not enforceable in Australia as you are not permitted to remove the Court s power to hear claims where there is specific legislation allowing such a claim to be made. Each State has legislation which allows claims against estates to be made. One of the reasons for legal intervention is to allow appropriate compensation for financial dependants where inadequate provision has been made. Lang Hancock s estate is a good example. His Will had numerous codicils but one in particular stated that, were his wife Rose or daughter Gina to challenge his Will then they were to receive no benefit from his estate. Even with this clause Rose and Gina fought for years in the courts over the estate. For further information contact Australian Executor Trustees. Top ten excuses for not making a Will Making a Will and keeping it up to date is so important because if you die without a valid Will in place the Government will decide who your assets will be distributed to. Although there are many excuses to not prepare or review a Will, none are a sufficient reason. There is no excuse for not having a valid Will in place. Many assumptions are made about estate planning. The biggest fallacy is that the estate will automatically pass to a partner or spouse. In some cases, particularly involving a de facto spouse, they receive nothing. This can result in costly court proceedings that may take years to resolve. Wills are not just for the rich or elderly. Anyone with a car, savings or sentimental items should have a Will. Some people think that a verbal agreement about distribution of assets is enough, however, this is very difficult to prove. Top ten excuses for not making a Will 1. I m too busy/no time 2. I m too young 3. I ve told my family who my beneficiaries should be 4. I m single 5. It s not my problem 6. I don t like my family anyway 7. I don t have any assets worth a significant amount 8. My partner will get my money if I die without a Will 9. I don t like lawyers 10. It s bad luck. These are only some excuses but you can see how important a current and valid Will is for everyone. Australian Executor Trustees can help you review or establish your Will so you don t encounter these problems. Simple Wills can be made online at easywill.com. au in 20 minutes. Alternatively, a professional estate planner can make preparing a Will straight forward and worry-free. Your family and friends may also benefit from the simplicity of using the easywill.com.au service. 3
Ask AET Q Can anyone challenge my Will? A In certain instances some members of our family, friends or charitable organisations may be considered more deserving as beneficiaries than others. This may therefore lead to some family members receiving less than they anticipated and they may challenge your Will in Court. Contesting a Will is not as easily done as some people assume. Each State has Family Provision legislation which allows certain family members and in some cases people outside of the family group to challenge a Will. In most cases, the challenge is based on the family member not receiving what they thought they should have. In legal terms they have to establish they did not receive adequate provision from the estate for their proper maintenance, education or advancement in life. This type of claim is the most common one used to challenge a Will. In most cases, these are settled before they reach a Court trial. However there is generally great expense to the estate, not to mention family disharmony. Other instances where a Will can be challenged include: when the strict legal requirements for creating a Will have not been adhered to when the Willmaker does not have the mental capacity (known as testamentary capacity) to understand the effect of making a Will. This is not determined by age or the onset of dementia but each person s individual circumstances when the Willmaker is subject to undue influence such that the terms of the Will do not reflect the true intentions of the deceased All of these situations can be difficult to prove. A professional adviser can help reduce the likelihood of a challenge to your Will. Janene Bon is a in WA. Our s can help clients with specialist estate planning advice, Wills and Power of Attorney preparation, estate administration, trustee and attorney services. Viewpoint survey results We would like to thank everyone who participated in the survey that was included with the first edition of Viewpoint. Your feedback is always extremely useful and appreciated. We hope to be able to reflect many of your suggestions in coming editions of Viewpoint and through the introduction of some new services Congratulations go to Mr Turner in South Australia who was the winner of the exciting prize draw available to those who completed the survey. Mr Turner is able to choose from one of the following prizes: a $10,000 cheque; a Mazda car ($15,999); travel and accommodation to the value of $15,000 or; a $15,000 home entertainment system. What did we find out from your feedback? From the survey we know that more than half of you would be interested in our proposed new Will management service. As part of this service we plan to offer reminders to review your Will, newsletters, legislative updates, safe storage of your Will and other documents along with some other additional services. We hope this will be a valuable service for all our clients. Also from the survey results we know that many of you are interested in finding out more about the services Australian Executor Trustees has available. 56% of people are interested in finding out more about Wills and estate planning services. 4
Executor Assist The administration of a deceased estate places many responsibilities on an Executor. Executor Assist, a service offered by Australian Executor Trustees, can help during this difficult time. Executor duties and legal obligations to be aware of include: 1. initial administration determine assets and liabilities, apply to the Supreme Court for a Grant of Probate 2. communicate with beneficiaries locate and advise beneficiaries of their entitlements 3. collect assets and pay outstanding debts 4. sell or transfer assets 5. determine superannuation entitlements and dependants ascertain options for payments and tax considerations 6. make distributions pay legacies, transfer bequeathed items, distribute estate funds and store estate records 7. register death for joint tenancies assets held in joint names automatically pass to the surviving partner but require formal registration 8. taxation determine the cost bases and acquisition dates for assets, provide cost base schedules, finalise tax returns and obtain tax clearance This is a complex and involved role and Executor Assist can help you with any or all of these responsibilities. A fixed quote will be provided to carry out your estate planning responsibilities depending on your requirements. You can retain as much control over the process as you wish and as your circumstances and capabilities permit. To find out more about how Executor Assist can help you with your duties as Executor, please contact your local Australian Executor Trustees office on 1800 882 218. A charitable cause Over the years, many Australians have decided to create a Charitable Trust in their Will with Australian Executor Trustees. One such Charitable Trust is the Sir Ross and Sir Keith Smith Fund. This Fund commemorates the achievements of two distinguished South Australian pioneer aviator brothers. The brothers won the Air race in 1919 for the first machine to fly from Canada to Australia in 30 days or less. In 1986 Lady Anita Smith, widow of Sir Keith Smith, bequeathed her entire estate to the establishment of this Fund for the purpose of advancement in the State of South Australia of the science of aeronautics and of education therein. Australian Executor Trustees is the Fund Trustee. The Fund s objective is to encourage scientific study, research and education in disciplines relating to aeronautics and aerospace technology. Research projects having clearly identifiable potential for worldwide commercial use are favourably regarded. Through this Fund, Australian Executor Trustees also undertakes exclusive or joint funding of appropriate education or research programs in approved tertiary institutions. Undergraduate and postgraduate scholarships along with academic fellowships are awarded to encourage further development and research. Australian Executor Trustees also provides sponsorship funds for activities that promote aerospace technology and education. The Fund has tripled in value since its inception and Australian Executor Trustees has provided in excess of $5 million to successful applicants. 5
Peter Hewish Peter Holdsworth Australian Executor Trustees welcomes our new s In response to the huge demand around Australia for estate planning services, Australian Executor Trustees has appointed two new s, Peter Holdsworth in Victoria and Peter Hewish in New South Wales. Peter Holdsworth has extensive experience in estate planning having practised almost exclusively in that area for the last five years. He also has over twelve years of trust company experience. Peter is a solicitor and legal practitioner in New South Wales and Victoria. He holds an accounting degree and a graduate diploma in financial planning. Peter is a member of the Law Institute of Victoria, the Society of Trust and Estate Practitioners and is a Certified Practising Accountant. Peter Hewish has over fourteen years experience as a lawyer including working with one of Sydney s leading estate planning firms. Peter s expertise includes Sydney tel 02 9028 1055 Robert Monahan Peter Hewish Mav Malik Adelaide tel 08 8218 4911 Lester Jarmyn Elizabeth Ferguson Grant Edwards Peter Saxon Brisbane tel 07 3218 2161 Mark Robinson specialist estate planning advice on tax planning, asset protection and advisory services. He also advises on Will preparation, Powers of Attorney and Enduring Guardian documents. His trustee experience extends to trustee services such as Testamentary Trusts, Living Trusts, Family Trusts and Charitable Trusts. Australian Executor Trustees welcomes Peter Holdsworth and Peter Hewish to our team of s. Australian Executor Trustees has one of Australia s largest and most experienced teams of estate planning professionals. For further information contact your local : Darwin tel 08 8218 4911 Lester Jarmyn Melbourne tel 03 9628 3133 Jo Hastings Peter Holdsworth Sue Zaia Mount Gambier tel 08 8725 9022 David Sandford Branch Manager Perth tel 08 9220 8713 Janene Bon Contact information freecall 1800 882 218 8.30am 5.00pm tel 08 8218 4911 8.30am 5.00pm fax 08 8218 4999 web www.aetlimited.com.au Important note: this newsletter is produced by Australian Executor Trustees Limited (AET). It is intended to provide general information in summary form on the topics discussed and is current at the time of publication. The contents do not constitute legal, tax or financial services advice and should not be relied upon as such. Before acting on any information contained in this newsletter you should consult an Authorised Representative of AET, AFSL Number 240023, or your financial adviser. No part of Viewpoint may be reproduced without the consent of AET in each case. AET, its directors, employees or any associate are not liable for any loss or damage arising as a result of any reliance placed on the contents of Viewpoint. This newsletter may be amended as determined by AET. Clients will need to contact their AET representative or financial adviser regarding any products outlined in this newsletter. Australian Executor Trustees Limited ABN 84 007 869 794 AFSL No. 240023 (AETEP1688)