At Welden & Coluccio Lawyers we absolutely love what we do.  In fact, the passion that we have for Estate Planning, Administration and Litigation is the real secret to our success.

Perhaps somewhat of an industry secret, Doyle’s Guide, is an annual publication that celebrates the best lawyers, barristers and law firms in the business.  Within each area of law, and for each State, rankings are allocated, identifying pre-eminent, leading and recommended practitioners.  Similarly, the guide recognises law firms specialising in specific areas of law and ranks them in tiers.  What makes the guide really special is the process by which these rankings are calculated.  Admission in the guide is determined by our peers, who identify firms and individuals through surveys, telephone and face to face interviews.

This year we have extended our success across a range of categories, improving equalling (and in some cases) improving our ranking from 2015 and 2016:

Leading Wills & Estates Litigation Lawyers – South Australia (2017): Jason Coluccio (Recommended), Greg Welden (Recommended)

Leading Wills & Estate Litigation Law Firms – South Australia (2017): Welden & Coluccio Lawyers (Second Tier)

Of special note is our achievement in what are new categories for 2017:

Leading Wills, Estates & Succession Planning Law Firms – South Australia (2017): Welden & Coluccio Lawyers (First Tier)

Leading Wills, Estates & Succession Planning Lawyers – South Australia (2017): Jason Coluccio (Leading), Greg Welden (Leading)

The message is clear; Welden & Coluccio Lawyers really are the ‘estate specialists’.

For more information about the guide and to see the final list please click here.

For many Australians times are financially tough.  It is quite a source of frustration to know that you have a stash of money growing in a super fund, yet are struggling with mortgage repayments and the rising costs of living.  Add to this an unexpected illness or significant misfortune and you may find yourself asking the question, “Can I get my hands on my Super early?”.

In most cases, you are not able to withdraw your superannuation until you reach your ‘preservation age’ and retire.  Currently the date you reach this age will depend on your date of birth.  See table below:

It all gets a bit confusing, a situation that is made more so by the reality this table is likely to continue to change as the government make tweaks to the rules about preservation ages.  I agree, a very frustrating matter.

While accessing your superannuation early (before you retire), is for the most part, not recommended (after all you will be needing this to fund your retirement), there are some situations where accessing this early (or part of this) is permissible by law.

Strategy 1: You Commence a TRIP Plan (a transition-to-retirement pension):

Once you reach your preservation age, you may continue to work in some capacity, but can commence a super pension.  This means that you may withdraw no more than 10 per cent of your account balance in the form of pension payments each year.  However, in most cases these payments can’t be converted into lump sum payments.  Furthermore, before activating this strategy it is highly recommended that you seek the advice of a financial planner to determine if this is a good strategy in your circumstances.

Strategy 2: The Preserved Amount of Superannuation Benefits is Less Than $200

You can access the balance of your preserved benefits should you leave a job and employer contributions for that job total less than $200.  I agree it is not an amount that is likely to make a huge difference to your financial situation… more of a small bonus.

Strategy 3: You Experience Severe Financial Hardship

Severe financial hardship, as determined by the government (no not your standards), can satisfy special conditions that may allow you to receive a portion of your superannuation benefits early.

This may be deemed appropriate if:

• You receive Commonwealth Government income support in the form of unemployment benefits for at least 26 weeks continuously. If the trustee of your super fund agrees that you are unable to meet everyday living expenses you may be granted a single payment of $10,000 (including tax) in any 12 month period.
• If you have reached your preservation age and have been receiving government income support for at least 39 weeks, you may be eligible to receive your entire superannuation benefit.

Strategy 3: Compassionate Grounds

Part of, or all, of your preserved benefits may be released to you on compassionate grounds for extenuating circumstances.  This might include you suffering a life-threatening illness or perhaps the bank wishing to take possession of your home (due to overdue loan repayments).  Similarly, you may be able to access these funds to pay for a funeral, medical expenses or palliative care.  Should you, or one of your dependents be severely disabled, it may be possible to release these funds to allow for home or car modifications.

Strategy 4: Terminal Medical Condition

If you are diagnosed with a terminal medical condition, as defined by superannuation laws, you will be able to access your preservation early.  Should a terminal medical condition affect a family member you may still be able to access your preservation according to the release of funds on ‘Compassionate Grounds’ (see strategy 3).

Strategy 5: Temporary Resident Leaves Australia Permanently

In most cases, if you are a temporary resident of Australia, you may access your preservation when you permanently leave Australia.  However, specific conditions affect citizens of New Zealand, who in this situation will not be able to access the funds but may transfer these funds to a KiwiSaver account.

Strategy 6: Permanent Disability or Permanent Incapacity

Sufferers of chronic illnesses or serious disability may be entitled to make a claim as part of the permanent disability insurance policy that is often attached to their superannuation account.  Individuals who suffer permanent incapacity, that is that due to ill health it is unlikely that they will  ever be able to work in a job for which they are qualified, trained or have experience in, can access their superannuation entitlements early.

Strategy 7: Death

Upon your death, the superannuation fund pays your death benefit to your estate, and via this to your spouse, dependants and other nominated beneficiaries.  Because of this, it is imperative the correct beneficiaries are identified in the binding nomination through your superannuation fund.  It also follows that appropriate estate planning, via an Estate Specialist, is recommended to circumvent the potential for error through the careful perusing of your superannuation documents and the drafting of a legal Will.

A key concern for many families while preparing their Will and Testamentary documents is the discussion surrounding how they might ensure the needs of their children will be met in the event of their unexpected death or illness.  Indeed, this is a critical discussion that must happen, particularly when the clients have very young children.  While most clients in this situation come to us ready to discuss these arrangements (having nearly always discussed this prior to the meeting), the same can’t be said when addressing business owners in the process of preparing their estate plan with regards to planning for the succession of this business.

In fact, most business owners, who come to us for the purposes of estate planning have thought little (if at all), about what might happen to the business should they die unexpectedly, or, become incapacitated and are unable to run the business.

Consider the following scenario:

Eva and Jim are married.  Jim, an Accountant, has built a large, successful accountancy firm while Eva managed the family and occasionally assisted with general operations of the business.    They have two adult children, Tim and Sophie.  Tim is in the process of undertaking an Economics Degree at university and Sophie is in the process of completing her Bachelor Degree in Medical Science.  Tim is currently working at his part-time at his parent’s accountancy firm and plans to undertake post-graduate study in the future.  It is assumed that Tim will eventually take over the business when Jim retires at 65.  Sophie plans to work in the field of medical research and has no interest in the family business.

At face value, assuming that everything happens as it should, Eva and Jim’s plan sounds like a great one.  However, for couples in this situation, careful attention to estate planning is crucial to ensure that should something unexpected occur, a contingency plan is in place to deal with this.  Indeed, even if everything evolves as it should and Jim reaches retirement age at 65, careful estate planning operates to ensure a smooth transition of the business to their son.

Commonly, business owners appoint their spouse or their children to act as executor of their estate without adequately considering whether they are the best person to run the business in the immediate period following their death.  Ideally, in the case of Jim and Eva, their business will fall into the hand of their son when Jim retires at 65 and by this time it might be assumed that Tim will be appropriately skilled and qualified to manage the demands of the business.  However, should this not occur, if Jim was to die before this time (or become incapacitated), the choice of Tim as executor could be a disaster.

A skilled estate planner will be able to devise solutions to ensure that the client’s intentions are fulfilled even in the event of unfortunate circumstances.  This may involve the creation of a company trust, so that for an interim period, the control of the business falls into the hands of someone who can ensure seamless management of the business until such a time as the owner is able to do so.  In this situation, while appearing similar, there is a distinct difference between ‘ownership’ and ‘control’.

Furthermore, depending on how the business is set up, this will determine whether the business can be transferred to a beneficiary via a Will.  Indeed, if the business is owned by a company or a trust then they are not the property of the client, and as such are non-estate assets.

It also follows that careful consideration should be paid to other children who may not wish to have any involvement in the business.  In the situation described above, the daughter Sophie, intends to pursue a career outside the family business.  Jim and Eva would be wise to consider separate estate provisions for their daughter so as to prevent the possibility of eventual litigation.

While this article serves to identify a few of the things that business owners must consider when preparing an Estate and Succession Plan, it should be highlighted that this type of Estate Plan has the potential to be deeply complex.  With this in mind, business owners are encouraged to seek specialist advice when preparing Testamentary documents so as to cover every possible scenario.

A recent judgement out of the Supreme Court of South Australia sends a timely reminder to all Will Makers, that trying to successfully leave someone out of your Will is still a very difficult and tricky proposition.

 For many years now a myth has been perpetuated in many circles relating to the misconception that leaving someone a ‘token’ amount in your Will is a sound tactic for preventing them from mounting an inheritance claim against your estate.  Perhaps the notion originated from an assumption that the mere fact that you have provided for someone in your Will (no matter how nominally), makes it more difficult for them to successfully challenge it and be awarded a greater share of your estate. This is simply not accurate.

Take for example an estate of approximately $500,000.  If this was gifted to one of only two children then it seems likely the second child may commence an inheritance claim in reaction to receiving nothing under the original Will.  Invariably, it is highly likely that they will succeed in this inheritance claim.  If, however, in the original Will the second child was provided a nominal gift of $100,000, with the first child receiving the remaining $400,000, the second child is still likely to commence a claim, attempting to convince the Supreme Court that they deserve a share beyond that which was already allocated to them in the Will.

So you see, a nominal or ‘token’ gift just isn’t going to cut it.

Let’s get back to the recent case.  The claimants were three of the six children of the deceased widower.   When the deceased and his wife immigrated to Australia from the UK, three children stayed behind as young adults (they were gainfully employed).  The deceased and his wife emigrated with their 3 younger children who, under the Will, inherited the whole of the estate.  A few important points to consider:

–      The deceased emigrated in 1973 and thereafter sustained a cordial relationship with the children left behind.

–    The Will was written in 2007 some 34 years after the deceased emigrated from the UK and, of importance, the size of the estate was modest just a little over $300,000 in total.

–    The Judge still awarded the claimants a sum of $47,500 each.

The next chapter to be written in this case is that of who pays the legal costs.  Under normal circumstances the estate pays everyone’s legal costs.  This further diminishes the value of the estate thus reducing the inheritance received by those chosen by the deceased.

The ruling highlights some of the difficulties apparent when preventing an inheritance claim.  There are some strategies that can reduce the likelihood of such a claim arising.  This may involve using binding death benefit nominations concerning Superannuation interests and transferring ownership of assets in certain circumstances.

It is imperative you seek advice from a solicitor experienced in drafting Wills concerning your wishes to leave someone out of your Will.  A solicitor is best equipped to provide you with appropriate advice related to what strategies may work and in what circumstances the risks of an inheritance claim are high.  For advice on all matters involving Wills and Estate feel free to contact Greg Welden, Jason Coluccio or the team at Welden & Coluccio Lawyers.

What is difference between making a Will and an Estate Plan?

We have provided a case study to help explain the difference.

Firstly, a Little Background

A client was concerned that at their death, their assets could be sold off by the surviving spouse during their remaining lifetime.

A solicitor was instructed and a comprehensive testamentary trust was developed at some expense.   Accordingly, the assets would be subject to the decisions of the appointed trustees. An important requirement was the trustees had to act in unison.  In other words all decisions relating to the trust must be unanimous.

The client was happy as their assets were now protected.

Or so they thought?

What Was the Problem?

Upon closer analysis, the complicated and expensive testamentary trust afforded absolutely no protection for the client.  Not a scrap.

Why you ask?

Well, the drafter of this Will did not undertake an overall plan of the instructing client’s estate.

It turns out that had the instructing client died first, all of the assets that were the subject of the desired protection would not fall into the deceased’s estate.

Why you ask?

Some of the assets were held jointly.   As such, these would be retained by the surviving spouse (right of survivorship). Other assets were held in existing trusts and the surviving spouse was the sole appointee and trustee.

Other assets were held in companies, whereby upon detailed review, the instructing client was not a director or shareholder, and as such, could not influence any control over those assets via the Will.

Could It have Been Fixed?

The simple answer is yes.

However, the solicitor needed to dedicate the time to examine all the assets that the instructing client had, how the assets were held and the structures in which the assets were held in.

Welden & Coluccio Lawyers provide you with an in-depth analysis of your assets and advise you as to the options you have when it comes to protecting your assets after you die, irrespective of which spouse dies first.

What is The Lesson?

There is a huge difference between making a Will and having an Estate Plan. Don’t leave the control of your estate and your assets in a Will unless you have had it prepared by a dedicated Estate Specialist.

Welden & Coluccio Lawyers are The Estate Specialists. It’s what we do.

I have been married for several years but have recently separated from my spouse. We have finalised a property settlement, but are yet to get around to being officially divorced.. I don’t have a Will, does this mean my former spouse will still have access to my estate when I die?

The simple answer is yes. Whilst you may be separated, you are still legally married and have a legal ‘spouse’ in the eyes of the law. Under the Administration and Probate Act 1919 (SA) if a person dies without a Will, having a legal spouse and no children, then the partner would be entitled to the whole of the estate.  Alternatively if there were children, and the estate was worth over $100,000.00 then the legal spouse would receive the first $100,000.00 and anything over $100,000.00 will be divided equally between the legal spouse and the children of the deceased.

In a recent case, the Supreme Court of South Australia heard the case of a young couple who had been married and undergone a messy break-up. A property settlement was entered into and they began to move in separate directions. The wife had served divorce papers on the husband, but he hadn’t yet signed them.   Legally speaking, the divorce was never finalised. Approximately 15 months later the husband died in a tragic accident. The husband left no Will which resulted in the former spouse being entitled to the estate in its entirety.  This included a house and a significant superannuation benefit. The deceased’s grieving family were left with nothing.

Whilst the family of the deceased might, in certain circumstances, be entitled to make a claim for an interest in the estate under the Inheritance (Family Provision) Act 1972 (SA), the exercise would be costly and possibly detrimental to the family.  This could easily have been avoided, either by finalising the divorce or by having a Will in place.

In the matter described above, if the deceased had been divorced or had left a Will, then his estranged wife would have no claim or entitlement to the estate.

It is prudent to seek advice from a solicitor in the event of a relationship break down. A solicitor is best equipped to provide you with appropriate advice related to the effects and long term implications a previous relationship may have on your estate and how to best to structure your affairs in order to minimise any ex-partner from making a claim to your estate. For advice on Wills and Estate matter contact the dedicated and experienced team at Welden & Coluccio Lawyers.

Estate Planning Specialist Greg Welden explores the dangers associated with DIY Will kits.

DIY Will Kits have been around for a while now and are readily available for the fraction of the price of having a Will prepared by a lawyer. In fact, you can probably pop down to your local post office right now and pick one up for less than the cost of an average pub meal.  I must agree that the promises put forward by these kits makes them seem rather alluring to the average lay person.  I mean, who doesn’t like to save a few dollars?  I know I do.

However, before you race off to buy one, you owe it to yourself to do some research to determine if the promises made by these kits really stack up and if a Will Kit is really capable of meeting your every need.

First things first…..a document must only comply with the conditions set out in the Wills Act to be considered a legal Will, such things like it must be in writing and executed by the testator and in the presence of two or more witnesses present at the same time with the witnesses also signing.

So yes, something written on the back of the proverbial “corn flakes packet” might be a valid Will.

The issues with Will Kits arise after the person who wrote it has died and their family or loved ones are attempting to administer their estate.  It is usually necessary for an executor named in a Will to apply for Probate (a formal process of proving the Will through the Supreme Court of South Australia).  It is at this time problems might arise which can often lead to delays in administering or finalising an estate and also lead to additional expenses in trying to rectify or resolve the issues that arise.

Some of the issues associated with Will Kits that I have seen over the years are:

the executor nominated has since died and there is no substituted executor named;

1. the executor nominated has since died and there is no substituted executor named;

2. the testator gifts a specific bank account to someone but at the time of their death they had changed banks leading to the gift failing;

3. the testator not having disposed of their entire estate leading to a partial intestacy (distribution according to legislation set out by Parliament);

4. the document not being signed correctly (or at all) and not being dated correctly (or at all);

5. the names of executors or beneficiaries being incomplete or incorrect leading to confusion;

6. salacious and scandalous comments being made in a Will requiring an application to a Judge to have them removed;

7. conditions being placed on certain gifts (…”X can have the car but only if he leaves that wife of his that I hate”…) which are either offensive, against public policy or impossible to meet or enforce;

8. a testator wishing to gift property which they own jointly with another such that the property never falls into their estate and ever be capable of being gifted;

9. the Will being revoked by marriage resulting in a distribution the testator did not want;

1. Divorce (not simply separation but the formal legal act of divorce) revokes any reference to the former spouse by way of executor or beneficiary or power of appointment in the Will.

Each of the scenarios described above (and indeed there are no doubt many more of these) has the potential to create serious delays and significant expense when it comes to finalising the estate.  It is impossible for someone without legal training to independently prepare a Will that takes into consideration the wide range of situations that might eventuate.

Using a Will Kit as a tool for estate planning can be likened to using google to diagnose your own medical complaints.  It might work out alright in the end but if you get it wrong the results can be oh so very, very bad.

A solicitor (ideally one experienced in all facets of Estate Planning) will take you through the myriad of possibilities (both now and into the future) to ensure your Will is as robust as possible and can stand the test of time.  All of your questions can be answered and an approach to writing your Will may be raised which had not previously been thought of.  There may also be other strategies available to you to avoid unwanted consequences or avoid a potential inheritance claim.

Have you considered how your superannuation or life insurance will compliment your overall estate plan, do you know who may have a claim on your estate and how best to deal with that, what tax consequences might arise in administering your estate which can be negated?  Well, an experienced estate solicitor can deal with all of these issues and many more.

While the DIY Will Kit is a cost effective approach to Estate Planning it is one fraught with risk.  In fact, while you may save a few dollars now by writing your own Will you stand to leave your family with legal expenses (potentially totalling many thousands of dollars) after you die, in an effort to fix it up.  In fact, as alluded to in the title of this article, the only person who really has anything to gain from DIY Will kits is the lawyers, who will reap large fees to fix up the legal messes that they create.

Is it really worth it?