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.

If I had a dollar for every time someone said this to me I could retire right now.  You see everyone thinks that their circumstances are straightforward and it follows then that they believe that their Estate needs will be easily satisfied with either a “cheap Will”, a blank template where you enter names and addresses; or, even worse, a DIY Will Kit.

Truth is, few Wills actually are straightforward, and a generic Will rarely ‘cuts the mustard’ for most people.  In fact, there are a tonne of situations that can make drafting a Will a complicated process best undertaken by an expert.  Consider the following scenarios and ask yourself if any of these situations apply to you:

–          Have you ever been divorced or separated?

–          Following a separation or divorce have you remarried or have you commenced co-habiting with another person?

–          Do you have children to two or more different people?

–          Are you employed by the government and have superannuation with Super SA?

–          Do you own real estate, wholly or with another person(s)?

–          Have you ever been declared bankrupt?

–          Have your children ever been declared bankrupt?

–          Are you concerned that assets will be lost to children following a divorce?

–          Following your divorce are you concerned about what might happen if your ex-spouse remarries?

–          Do you own a business, wholly or with another person(s)?

–          Do you own shares?

–          Are you a professional and thus open to the risk of litigation (eg any professional, especially Lawyers, Doctors, Accountants and          Financial Advisers)?

–          Do you have children who are minors?

–          Are you uncertain if you have a death benefit associated with your superannuation fund?

–          Do you know who your beneficiary nominated in your superannuation is?

Each of the situations described above requires a high degree of personalisation when it comes to the drafting of a Will.  This is not possible to do with a generic Will and definitely not possible with a DIY Will kit.  Furthermore, some of these situations will necessitate drafting of a Testamentary Trust.  This specific type of Will is best undertaken by an Estate Specialist, with many in the legal profession unskilled in this area.

There are many risks associated with generic and DIY Wills.  In a nutshell they often prove grossly inadequate when it comes to meeting the needs of the ‘average person’, with the potential for unintended errors that may cost your beneficiaries large sums in legal costs.  At Welden & Coluccio Lawyers, we have the know-how to ensure that every aspect of your circumstances is taken into consideration for the protection of your beneficiaries and your wishes.

I just love a clean slate.  I think it goes back to my primary school days when we trundled into school late January to collect our tidy bundles of new stationery, complete with perfectly sharpened HB pencils and crisp white interleaved notebooks.  I think it was the promise of new beginnings and of new opportunities that I relished.  Perhaps I was just pleasantly asphyxiated on the fragrance of all those freshly cut trees.

Happy New Year!  Of course, in the spirit of making the most of a clean slate, the New Year is the perfect time to reassess your current situation.  I am not just speaking of starting that clean-eating regime  (although you really should do this; bring on the detox). No, I am talking about a complete re-evaluation of your financial and legal affairs.

So where are you now, and, what is happening in your life?  Perhaps you are about to buy a new house or have sold an existing property?  You might have started a new relationship (lucky you)?  You may have even ended one?  Maybe you’ve just retired or are thinking about doing this in the next year?  Births, deaths, marriages, divorce, they all call for a careful re-evaluation of your finances which also requires a reassessment of how all these events are dealt with in your Will.

The New Year is the perfect time to review your wills and estate documents to ensure that they reflect your current (potentially altered) circumstances.  This year I ask you, as you box away your Christmas prezzies; to ask yourself some simple questions.   Is my Will still relevant? Would it still meet my needs should the unthinkable occur?  Better yet, if you still have not managed to get your Will drafted, I implore you to make 2017  the one that you nailed it.

Welden & Coluccio Lawyers; the Estate Specialists are happy to assist you with all your legal needs.  For more information or for a consultation please contact Jason Coluccio or Greg Welden on 7225 8703.

What is an estate asset?

An estate asset is one held in your own personal name.  Examples of these include real property held in your personal name or an interest as tenant in common, bank accounts in your sole name, vehicles and shares that are also held in your personal name.

What is a non-estate asset?

A non-estate asset can’t be dealt with in accordance to your Will.  Non-estate assets may be assets owned:

–           as joint tenants;

–           perhaps by your self-managed superannuation fund;

–           by your family discretionary trust.

At Welden & Coluccio Lawyers we can help you to develop ways to deal with non-estate assets.  Therefore, your estate plan should be tailored so that the control of any non-estate assets is passed to your loved ones.

There is a common misconception that estate planning is just something that wealthy people need to do.  Wrong.

While anyone with a lot of assets and capital behind them certainly needs a comprehensive estate plan, it is also important that ordinary Australians have one too.

“But I’m not worth much dead.” I hear you say.

On the surface this may be seem to be the case.  However, if you have ever worked, it is highly likely that you will have some Superannuation squirrelled away and possibly even death benefits that would be paid out upon your death. In short, in death you probably are worth something.  Add to this the reality that most ‘average Australians’ also have equity in their family home along with other investments and you have a strong case for needing an estate plan.

“But I have a Will, surely that is enough?”

It might be, but chances are it may not be enough to ensure that your estate will pass onto your loved ones in the manner that you wish.

At Welden &Coluccio Lawyers we take the time to determine what estate assets and non-estate assets you own.  It is common for people to believe that they own a particular asset only to discover that this asset is, in fact, owned by a family trust (and will not form a part of your personal estate).

Ok, so if my last blog about Wills (Nostradamus) was a bit of a stretch on celebrity, this one will surely break that string.  To be fair, even I feel bad calling this person a celebrity will, but hey, like I say, everyone needs a Will!!

A few weeks back my interest was piqued when I read a news headline suggesting that, according to a recently released Will,   “Osama bin Laden left millions of dollars to fund jihad.”

Osama bin Mohammed bin Awad bin Laden was born 10 March 1957 and was the founder of al-Qaeda, the organization that claimed responsibility for the September 11 attacks on the United States, along with numerous other mass-casualty attacks against civilian and military targets.  He was a Saudi Arabian and a member of the wealthy bin Laden family.

The Will

Apparently the document, dated 3 months after the September 11 attack, was seized by Navy SEALs in 2011, when they entered bin Laden’s hideout in Pakistan and killed him.  It was among a number of documents released into the public domain.

The Will is a single page document, handwritten in Arabic, which allegedly states he had over $AUD52M in Sudan which came to him from his brother.  Like any good Will should a number of gifts were outlined, including bequests of gold bars, diamonds and a Samsung 48-inch TV to family (as you do).  In the Will bin Laden states that he hopes his family will spend the rest on jihad for the sake of Allah.

Interestingly, as various reports claim, bin Laden also states a wish that his wives not remarry after his death and his children not join al-Qaida.

I presume his wives are not chomping at the bit to claim the document with the intent to carry out these specific wishes!

Conclusion

As always, bin Laden’s reminds us of the harsh reality that everyone needs a Will.   Everyone is going to die, at some point.  Even sadistic dictators.

It follows then, if you don’t want your wives to remarry….oh that’s right….next topic.

Greg Welden is a solicitor with more than 15 years’ experience in the Law.  His somewhat uncanny passion for all things related to Estate Law has seen him specialise in Estate Planning, Administration and Litigation.  Today, he is one of Adelaide’s most experienced solicitors in this field and is a regular contributor in both local and national conferences on the topic.

Nostradamus was born in 1503 and died on 2 July 1566 at the age of 66 years.

Since becoming aware that Nostradamus completed a Will, I have been curious to discover how a person with such acclaimed talents in prophecy would manage their estate and ultimate demise. After all, as lawyers, we regularly say to clients, “if you can tell me when you’re going to die I can tell you exactly what to do with your estate plan.”

Nostradamus is best known for his book Les Propheties, the first edition of which appeared in 1555. The book has been in near continuous publication since his death, attracting a following that, along with much of the popular press, credits him with predicting many major world events. Despite this, the majority of academic critics maintain that the associations made between world events and Nostradamus’s quatrains are largely the result of misinterpretations or mis-translations (sometimes deliberate), or else are so tenuous as to render them useless as evidence of any genuine predictive power. But that hasn’t stopped us looking.

Of particular note Nostradamus is attributed to predicting the death of the French King Henry II in the summer of 1559.

The young lion will overcome the older one, On the field of combat in a single battle;
He will pierce his eyes through a golden cage, Two wounds made one, then he dies a cruel death.

Indeed Henry did succumb to injuries following a jousting incident when a lance pierced his visor and the shards splintered, injuring his eye. While many of the details in the quatrain appear accurate, sceptics assert that some of the symbols are inconclusive or inaccurate.

Similarly, Nostradamus is credited to predicting the rise of Adolf Hitler more than 300 years before his birth.

From the depths of the West of Europe, A young child will be born of poor people,
He who by his tongue will seduce a great troop; His fame will increase towards the realm of the East.

and

Beasts ferocious with hunger will cross the rivers, The greater part of the battlefield will be against Hister.
Into a cage of iron will the great one be drawn, When the child of Germany observes nothing.

Hitler, who was born to poor parents in 1889 in Western Europe, used highly refined oratory skills to mobilize the Nazi party in Germany in the years following World War I. Germany, as a part of the Axis powers, also allied with Japan in the East. While many believe ‘Hister’ to be a typo, it’s also an old name for the Danube River.

The Will

By 1566, Nostradamus’s gout, that had plagued him for many years, turned into edema . On 17 June 1566 he summoned his lawyer to draw up an extensive Will, bequeathing his property plus 3,444 crowns (around $450,000 AUD today), minus a few debts, to his wife (pending her remarriage), and to a trust for his sons (pending their 25th birthdays) and his daughters (pending their marriages).
This was followed on 30 June 1566 by a much shorter codicil, essentially an addendum or addition, to the previous Will which still stands.

On the evening of 1 July, he is alleged to have told his secretary Jean de Chavigny, “You will not find me alive at sunrise.” The next morning, it was reported, he was found dead.
Interestingly, the opening paragraph of the Will includes the phrase “Just as there is nothing more certain than death, nothing is more uncertain than its hour”. This is a rather odd statement considering Nostradamus’ vocation isn’t it?

The Will is full of great lines which, some sadly, are no longer used in modern day estate planning. However, some I would advocate for their return, such as;

The latter [referring to Nostradamus himself], considering and being in his full understanding, resting well and seeing and understanding, and although all-told not being weakened, because of his ancient age and certain bodily illness, by which he is at present confined, wishes to provide while he is alive for his possessions that God the Creator has given him and lent him for this mortal world, to the end that after his decease and passing, there will be no question, process and difference over these possessions.

I suppose 66 in 1566 was considered to be an ancient age!

Firstly, as a good, true and faithful Christian, he has recommended his soul to God the Creator, begging Him that when it will be His good pleasure to call him, that it may please Him to collect his soul into the eternal Kingdom of Paradise.

There are many other specific gifts of a very small nature, each reflecting beliefs at the time relating to the continuance of good deeds and of provision for the clergy as encapsulated in the following paragraph.

He has also bequeathed, willed and ordered incontinent that six sous be given to each of thirteen beggars, one time only after his death. He has also bequeathed to the Friars of the Observance of Saint-Pierre-de-Canon one crown once only, payable incontinent after his death. He has also bequeathed to the Chapel of Notre Dame des Penitents-Blancs of the said Salon one crown payable once only incontinent after his death. He has also bequeathed to the Friars Minor of the Convent of St. Francis two crowns once only, payable incontinent after his death.

Conclusion

Nostradamus’ Will, although not necessarily complicated, is certainly lengthy and difficult to read through modern eyes. There is a prevailing belief in the community, that the style of writing use by lawyers has changed little in 500 years . I am inclined to disagree.

A carefully crafted Will and estate plan should consider each and every word, phrase and sentence in the context of the whole document. It is critical to remember that after your death you are not around to explain what it was you actually meant.

There are too many examples of small errors or ambiguities in Will documents that lead to very expensive Court applications. It is a very important document and each clause is inserted for a very important reason.

A Will that is too short may pose as many problems as a Will that is too long.
Irrespective of the language used, Nostradomus’ Will provides a fascinating insight into societal beliefs and values during the mid-sixteenth century. When examining this Will, one thing remains certain; while the jury is out as to whether or not Nostradamus knew when he was going to die, he was wise enough to ensure he had a Will before that day arrived.

Click here to see a copy of Nostradamus’ Will.

Most people are probably somewhat familiar with the role of Enduring Powers of Guardianship, Medical Powers of Attorney and, to a lesser extent, Anticipatory Directions.  These various documents are the means by which an individual can express his or her medical wishes, future health care and other personal matters.  There are subtle differences between each of the documents and determining which documents were required usually only occurred in consultation with a lawyer.

I speak in the past tense because this is all about to change, in what is the most extensive overhaul of legislation related to this area of estate planning in more than 20 years.  The Advanced Care Directives Act will commence operation on 1^st July 2014.  In a nutshell an Advanced Care Directive (“ACD”) will replace the Enduring Powers of Guardianship, Medical Powers of Attorney and Anticipatory Directions.  It is a single legal document which enables competent adults to appoint one or more Substitute Decision-Makers to make medical decisions on their behalf after they lose mental capacity, to write down their wishes and preferences for future health care, residential, accommodation and personal matters.

Previously there was a large crossover between the appointment and authority/obligations on guardians and medical attorneys who may or may not have to also comply with any specific written directions contained within an anticipatory direction made separately.   Now, all health care, residential, accommodation and personal decisions are contained within one single document.

From 1^st July 2014 only an ACD is a lawful and valid way of appointing Substitute Decision-Makers and making statements about your health-care wishes and personal values.

When preparing an ACD you may choose to include statements about your wishes and values however, they should be clear, precise and well thought out.  For example, you may wish for your Substitute Decision-Maker to consult with a specific friend when making decisions about your welfare. Perhaps because of your religious beliefs, you do not wish to receive a blood transfusion, even if it is judged medically necessary to save your life.  Alternately, in the event you require supported accommodation, you would prefer to live close to a specific family member.  It is vital to remember when preparing these documents that ambiguous statements are unlikely to assist health professionals or Substitute Decision-Makers.

If you have written a refusal of health care, it must be followed if relevant to the circumstances at the time.  This means your health practitioner will not be able to give health care treatment that you have refused.  All other information written in your ACD is advisory and should be used as a guide to decision-making by your Substitute Decision-Maker, your health practitioners and anyone else making decisions on your behalf.    For instance, this may be observed in a statement about the refusal to receive life sustaining measures by artificial means or devices, if you are in the terminal phase of a terminal illness, and unlikely to return to a reasonable quality of life.

While this is a massive change for lawyers, this requires very little from the average Australian who already has documents for either Medical Powers of Attorney, Enduring Powers of Guardianship or Anticipatory Directions (assuming they were prepared and finalised before 30^th June 2014).  The old documents are still functional.  However, as experienced solicitors in this field, we always recommend careful review of all testamentary documents on a regular basis.

Who you should appoint as your Substitute Decision-Makers, in what capacity they should be chosen and what conditions, limitations or directions you should give to them is still something a lawyer is best equipped to discuss, advise and provide guidance.  Lawyers are uniquely equipped to manage expectations, provide a plethora of alternative solutions and suggestions and prepare an ACD which is uniquely suited to you, your individual needs and concerns, with a view to avoid confusion, conflict and ambiguity in the future.

For more information related to Advanced Care Directives, or for an appointment to discuss your individual needs, please contact Greg Welden or Jason Coluccio on 7225 8703