0451 530 877
02 9130 3374

General Estate Planning Tips

Why you should make a will

People, particularly beneficiaries under a contested will, often question what is the point of making a will if the court can change or ignore it.  However, there are many excellent reasons to make a valid will:

  1. The process for obtaining a grant of Probate is easier thereby lessening the stress on already grieving family members;
  2. Subject to any moral obligations you may have to provide for someone, you decide who inherits or does not inherit your estate;
  3. Ensures that someone, who deserves to inherit your estate but would not inherit it under the law governing deceased estates where there is no valid will, does so. For example a caring stepchild;
  4. It provides the opportunity to nominate a guardian for children who are minors;
  5. May prevent an estate from passing under bankruptcy or a family court order;
  6. The potential for tax minimization.

Why you should make an Enduring Power of Attorney

If you become incapable of managing your own finances (due to old age or an unforeseen event that leaves you incapacitated) and have not appointed an attorney under an Enduring Power of Attorney, a Financial Management Order will need to be made appointing someone to manage your financial affairs. This is not ideal because:

  1. The person or institution appointed to be your financial manager may not be a person or institution that you would choose to appoint to manage your finances;
  2. Even if you would choose this person or institution to manage your finances, financial management pursuant to a Financial Management Order is usually more onerous than financial management pursuant to an Enduring Power of Attorney;
  3. If you do not have a person you trust to manage your finances, the preferable option is to appoint an institution such as a trustee company or the NSW Trustee and Guardian as your attorney under an Enduring Power of Attorney;
  4. An Enduring Power of Attorney sets out your authority for the management of your finances whereas management pursuant to a Financial Management Order is pursuant to legislation;
  5. The appointment of a financial manager usually involves an application to the Guardianship Division of the NSW Civil and Administrative Tribunal or to the Supreme Court of NSW. This could leave your estate unmanaged until a Financial Management Order is made and expose your estate to the risk of loss and costs.

Why you should appoint an Enduring Guardian

A guardian is a person who makes lifestyle decisions for a person who has lost capacity. If you become incapable of making decisions such as where you will live or what medical treatment you will receive in circumstances where such decisions need to be made and you have not appointed an enduring guardian, a Guardianship Order may be made appointing someone to make those decisions for you. This is not ideal because:

  1. the person appointed as your guardian may not be a person that you would have chosen;
  2. the person appointed as your guardian may not know your wishes so as to take them into account when making lifestyle decisions for you;
  3. the appointment of a guardian is a legal process and, as such, there could be a delay, particularly if the decision that needs to be made is not urgent and costs may be incurred that may be payable out of your estate.

Family Provision claims

A family provision claim is a claim made on a deceased estate for provision or further provision from a deceased estate. It is not to be confused with a Family Law Property Settlement, which relates to the division of property between spouses.
A family provision claim can only be made by an eligible person. An eligible person is a:

  1. spouse;
  2. de facto spouse;
  3. child;
  4. former wife or husband;
  5. dependent grandchild or person who was a member of the same household as the deceased; or
  6. person with whom the deceased was living in a close personal relationship at the time of the deceased’s death. Whether there was a close and personal relationship is a matter for evidence.

Beneficiaries of an estate in respect of which a family provision claim has been made often question the point of making a will if the wishes of the deceased will not be respected. The rational behind the legislation is that people have a moral obligation to provide for certain people and these people should not be a burden to society or the benevolence of strangers. Perhaps the most commonly cited example is that of a husband leaving his entire estate to his mistress thereby leaving his wife and children destitute. However not all family provision claims are worthy or legitimate.

If you believe that you have been wrongly left out of a will or if you are an executor, administrator or beneficiary under a will against which a claim for provision has been made, you should seek legal advice. We would be happy to provide you with advice.

Financial Management Orders

What is it?

A Financial Management Order is an order made by a court or tribunal for the appointment of a third party to manage your financial affairs. It is only made if:

  1. you have lost capacity to manage your finances without appointing an attorney under an Enduring Power of Attorney;
  2. there is a concern that the person you appointed under an Enduring Power of Attorney has mismanaged your finances or is not managing your finances in your best interests after you have lost the capacity to manage your finances.

Legal incapacity

A loss of capacity can occur as a result of a cognitive impairment such as dementia, brain damage as a result of an accident or a mental or psychiatric disability such as but not limited to schizophrenia or bipola disorder.

Direct management and private management

Where the court or tribunal has appointed the NSW Trustee and Guardian to manage your finances, you are under the direct management of the NSW Trustee and Guardian. If someone other than the NSW Trustee and Guardian is appointed to manage your finances, you are under private management. The person or institution appointed as your private manager manages your finances under the supervision of the NSW Trustee and Guardian.

How to make an application for a Financial Management Order

There are a number of ways in which a Financial Management Order can be made. The most common and cost effective way is by application to the Guardianship Division of the NSW Civil and Administrative Division. You can obtain information on how to make an application for a Financial Management Order or download the form from the website: http://www.ncat.nsw.gov.au/Pages/guardianship/guardianship.aspx .

Reviewable Decision

An application may be made by interested persons including anyone with a “genuine concern for the welfare” of the person under management for the review of a Financial Management Order or the appointment of a manager. Upon review, the Financial Management Order may be cancelled, varied or confirmed and the appointment of the manager may be cancelled or confirmed.

Termination

A Financial Management Order terminates:

  1. upon the death of the managed person;
  2. upon cancellation of the order by the court or tribunal;
  3. in the case of an Interim Financial Management Order, upon the expiry of the order.

Guardianship Orders

What is it?

A Guardianship Order is an order made by the Supreme Court or the Guardianship Division of the NSW Civil and Administrative Tribunal for the appointment of a third party to make decisions as to where you will live and what medical or dental treatment you will receive. A Guardianship Order is only made:

  1. if you lose capacity to make lifestyle decisions without appointing an Enduring Guardian;
  2. if you have appointed an Enduring Guardian but there is a concern that the person you have appointed is not making decisions in your best interests.

A Guardianship Order may not be made or renewed if there are no significant lifestyle decisions that need to be made.

Who may be appointed?

Usually, a family member is appointed but where there is an irreconcilable conflict between family members or there is no suitable family member to take on the role, the Public Guardian will be appointed.

How to make an application for a Guardianship Order

An application for a Guardianship Order may be made to the to the Guardianship Division of the NSW Civil and Administrative Division in respect of persons over 16 years old by the person, the Public Guardian or anyone who has a “genuine concern for the welfare” of a person. You can obtain information on how to make an application for a Guardianship Order or download the form from the website: http://www.ncat.nsw.gov.au/Pages/guardianship/guardianship.aspx .

Review of Order

An application may be made by interested persons including anyone with a “genuine concern for the welfare” of the person under guardianship for the review of a Guardianship Order. Upon review the Guardianship Order may be cancelled, varied or confirmed.