Case update -adult children challenging a parent’s estate

It is an unfortunate fact of life that family relationships break down – and as a result, the aggrieved family member may alter their Will to remove the other family member as a beneficiary, or only leave them with a nominal gift – even if it is their child.  Whilst it is every person’s right to prepare a Will which reflects their wishes, the excluded person may have the right to make a family provision claim for an entitlement under the Will.

In a recent family provision case (Smith v Smith [2016] NSWSC 1077), the Supreme Court of New South Wales held that 2 of the deceased’s adult children were entitled to grants of $90,000 and $100,000 (when their initial grants under the Will were $30,000 each).

The circumstances of this particular case were as follows:

  • the deceased had 3 adult children – two sons and a daughter;
  • the first son had been estranged from his father for approximately 7 years, although over that time, the son had sent approximately 10-15 text messages to his father, but with no response;
  • the daughter had been estranged from her father for approximately 19 years, although over that time, she had made some attempts to contact her father, but with no success;
  • the second son had a close relationship with the father, caring for him in the last few weeks of his life before he passed away from bowel cancer;
  • in his Will, the father left a bequest of $30,000 to his first son, a bequest of $30,000 to his daughter, some other bequests to grand-children, with the balance of the Estate to be gifted to his second son.

LPPAfter hearing evidence from all parties regarding the difficulties of their relationship with their father, their current financial circumstances, their future financial needs, and the size of the Estate, the Court noted that the breakdown in the relationship was highly likely due to the deceased’s difficulty personality, noting that the children’s limited attempts to contact their father were unsuccessful.  The Court also noted that there was no demonstration by the children of ill-temper or violence towards their father.

Noting the children’s various financial needs, the Court increased the grants to $90,000 and $100,000 respectively (from the initial grants of $30,000).

Interestingly, the Court’s reported decision made reference to a number of comments made by various Judges over the years as to what is an appropriate provision:

Minds may legitimately differ as to the provision that should be made … [W]hat is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight: Grey v Harrison [1997] 2 VR 359 per Callaway JA at 366-367

It involves

… an intuitive assessment: Kay v Archbold [2008] NSWSC 254 per White J at 126

As to what is an appropriate provision can only be determined on a case by case basis, taking into account all relevant facts and circumstances.

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Please contact Shire Legal if you have any questions about drafting a Will to exclude certain family members, or questions about making a family provision claim.

An earlier blog by Shire Legal in relation to family provision claims can be seen here.

 

Your rights when dealing with NSW Police

Dealing with the Police can be an extremely intimidating and confronting experience, particularly if you are being questioned or arrested on suspicion of having committed a crime.  It is important to be aware of your rights and remain calm when dealing with the Police.  Whilst you may not have committed an offence when first approached by Police, by being violent, aggressive, offensive or swearing at a Police Officer you may subsequently be charged with an offence.

The main Police powers are contained in the following legislation:

  • Law Enforcement (Powers and Responsibilities) Act 2002;
  • Road Transport Act 2013;
  • Bail Act 2013; and
  • Crimes (Domestic and Family Violence) Act 2007.

The above Acts set out circumstances where Police can exercise their powers and the responsibilities they have in exercising their powers.

Power to Demand Name and Address

Police have the power to request that you identify yourself and you must legally comply with this request in the following circumstances:

  • if the Police suspect on reasonable grounds that you may be able to assist them to investigate an indictable offence because you were at or near the scene of the offence;
  • if you are under the age of 18 and Police suspect you of carrying or consuming alcohol in public;
  • if you are suspected of committing an offence on a train or part of a railway;
  • if the Police are trying to serve a fine default warrant;
  • if you are driving a car or accompanying a learner driver;
  • if the driver of a car is alleged to have committed a traffic offence, the owner or person responsible for the car must provide the name and address of the driver;
  • if the Police suspect on reasonable grounds that a vehicle is being (or was, or may have been) used in connection with an indictable offence, and you are the driver or a passenger of the vehicle; and
  • if you are involved in an accident.

When can a Police Officer Arrest You?

A Police Officer can arrest you if:

  • you are committing an offence;
  • you have, or the Police Officer has reasonable grounds to suspect that you have committed an offence;
  • you have breached your bail conditions;
  • a warrant has been issued for your arrest;
  • you are breaching the peace;
  • the Police Officer needs to serve an Apprehended Violence Order on you or has a warrant for your arrest for serving an application for an Apprehended Violence Order on you; and
  • the Police Officer wishes to apply for a provisional (urgent) Apprehended Violence Order against you.

Court Attendance Notice

What a Police Officer must tell you when arresting you

The Police Officer placing you under arrest must:

  1. tell you that you are under arrest;
  2. tell you why you are being arrested; and
  3. tell you their name, rank and place of duty.

It may not be practical for the Police Officer to tell you these details at the time of your arrest.  If this is the case they must tell you as soon as possible after your arrest.  A Police Officer may use as much force as is necessary to arrest you.  If the force used by the Police Officer is unreasonable, it can amount to assault.

 When can the NSW Police search you?

A Police Officer can search you in the following circumstances:

  1. if you agree;
  2. if you are under arrest or being held in custody;
  3. if they have a search warrant; or
  4. if they have reasonable grounds to suspect that you are carrying:
  • Stolen goods;
  • Goods unlawfully obtained;
  • Prohibited drugs;
  • Knives, weapons or dangerous implements;
  • A laser pointer; or
  • An item that has been, or may be, used in a serious crime.

The search may include your car and/or your possessions.

 Police Questioning

You cannot be arrested for the sole purpose of questioning.  The Police can request that you accompany them to a Police Station for questioning, however, you are not required to go unless you have been arrested for an offence.

If you have been arrested for an offence, you do not have to take part in an interview to answer questions about that offence.

You have a right to silence, however, in some circumstances your right to silence may be used against you in Court where the Police have issued a “special caution“.  This ‘special caution’ can only be given if:

  1. you have had an opportunity to obtain legal advice from a lawyer; and
  2. you are given the ‘special caution’ in the presence of your lawyer.

If the ‘special caution’ has been given and you then fail or refuse to tell the Police a fact that is later relied upon in your defence, it may permit the Court to use your silence against you.  In some circumstances it may be in your best interest for your Lawyer not to attend the Police Station.

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If you need assistance with dealing with the Police, contact Shire Legal on 9526 3444 or info@shirelegal.com.au.

What is a Deed of Novation?

Consider this – you have entered into a contract to purchase a property, but for various reasons, the property no longer suits you.  But it will suit your parents perfectly.  So can you transfer the contract over to your parents, so that your parents are the purchasers?

Also consider this – your business has a really valuable commercial contract, supplying services to a large organisation.  However you are moving interstate and closing up the business, but rather than letting the valuable commercial contract lapse, you would like to instead transfer the benefits (and obligations) under it to a friend’s business which is operating within the same industry.

So how are these transfers dealt with legally?  With a Deed of Novation.

A Deed of Novation is used when a party wishes to transfer or assign its rights and obligations under an existing contractual arrangement to another party – that is, the outgoing party is substituted for the incoming party without changing the original rights and obligations under the original agreement.

The effect of such a Deed is that the outgoing party is released from its obligations under the contract, and the various rights and obligations under the contract are transferred to the incoming party.

From the point of view of the other party to the contract, nothing changes – although they would need to consider and consent to the transfer (see below)Question

What is the difference between novation and assignment?

  • Novation transfers both rights and obligations under the contract to the incoming party, whereas assignment transfers rights only.
  • Novation requires tri-partite consent (that is, the consent of all parties – the outgoing party, the incoming party and the remaining party), whereas assignment may not require the remaining party’s consent (subject to the actual wording of the contract)
  • Novation results in a new agreement on the same terms as the original agreement, whereas assignment doesn’t necessarily discharge the original agreement, meaning that the outgoing party will remain bound by any obligations

Points to consider

It is important to consider the following points when considering a deed of novation:

  • does the original contract allow one party to novate its rights and obligations to another party?
  • does the novation require pre-approval from the remaining contractual party?
  • is there a requirement for pre-approval not to be unreasonably withheld?
  • would it make more commercial sense to terminate the existing contract, and replace it with a new contract?
  • who will be liable for past performance or default prior to the novation?  Will the incoming party take on the rights and obligations pre-dating the novation?
  • what will be the effective date of the novation?  The date of the agreement, or some other pre-determined date?

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Contact the team at Shire Legal on 9526 3444 or info@shirelegal.com.au if you have any questions about Deeds of Novation, or commercial agreements generally.

What is the problem with unapproved building works?

A few years ago, Shire Legal acted for a client purchasing a property at Kurnell.   There was nothing particularly unusual about the transaction – it was a standard family home being sold from one family to another.

However initial enquiries carried out by Shire Legal suggested that the recent renovation at the rear of the property was unapproved.  The significant risk in purchasing a property with unapproved building works is that not only is the workmanship potentially dangerous (particularly if it was carried out by an unlicensed tradesman), but the property owner could be ordered by Council to demolish the building works if it doesn’t comply with Council regulations.

This would no longer have been an issue for the vendors if they were able to sell the property without any questions being raised by the purchasers, but luckily for the purchasers, we picked up on the unapproved works prior to contracts exchanging.

So how were the purchasers protected?

Shire Legal was able to request a special condition be inserted into the Contract to make the entire Contract subject to our clients being able to obtain a satisfactory Building Certificate from Sutherland Shire Council.  We thought it was a pretty bold move, but one worth making.

Renos 223

So, what was the outcome?

Fortunately for our clients (and the vendors!), the certifier from Council inspected the property and issued a Building Certificate.  Meaning that no rectification work was required, and the previously unapproved works were now approved.

But what if they weren’t approved?

Nevertheless, the special condition would have given our client a way to get out of the Contract if the Council was not prepared to grant the Building Certificate.  The vendor then would have the responsibility of making the property comply in accordance with Council’s requirements, something that our clients would not have wanted to do at their own cost.

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Make sure that you conduct sufficient searches and enquiries in relation to any property that you are purchasing – in particular, don’t take the risk with unapproved building works.

Contact Shire Legal on 95263444 or info@shirelegal.com.au if you have any questions about purchasing property.

The recent government webinar – getting your business ready for the 2016/2017 financial year

Just in case you missed the recent webinar held by representatives from the ATO, ACCC, ASIC and Fair Work Ombudsman, here is the list of important links shown as part of the above webinar:

Question

Fair Work Ombudsman:

Australian Competition & Consumer Commission: B2B UCT (Business To Business Unfair Contract Terms)

Excessive card surcharging

Scams

Australian Securities & Investments Commission:

Australian Taxation Office:

8 common mistakes to avoid when drafting your Will

When preparing a Will, it is crucial that it is prepared in accordance with the relevant laws – in New South Wales, that law is the Succession Act 2006.  Otherwise, your Will is at risk of being an invalid document, or even capable of a number of different interpretations if not worded correctly, and therefore once you have passed away, your family may not be able to rely upon it as evidence of your wishes as to how you would like your Estate to be distributed.

Common mistakes found in Wills that are home-made, or even Wills that are made using a pre-filled document purchased online, are as follow.

Handwritten Will

Leaving your Estate to your spouse and your children, but not nominating any other beneficiaries

It is an unfortunate possibility that your spouse and your children will pass away at the same time as you.  And if you have not nominated any other beneficiaries in your Will, then you will be considered to have died intestate.

To avoid this, we always recommend that you nominate at least one more group of beneficiaries – whether it is your siblings, closest friends, or even a charity – so that there is at least one person or entity that can receive your Estate in the event that the main beneficiaries have passed away before, or at the same time as, you.

Appointing your spouse as your executor, but not nominating any other executors, or nominating the wrong executors

As per the above example, there is always a risk that your spouse will pass away at the same time as you.  Therefore you should have at least another person, or even 2 more people, nominated as your alternate executors.

The executor is responsible for the administration, distribution, and carrying out of your wishes as set out in your Will.  It is an important job, so you need to appoint someone who is able and willing to take on the role.

Keep in mind, too, that if your Estate will be gifted to your children once they turn a nominated age, then the executor usually also fulfils the role of trustee, and has the responsibility of looking after the assets held in trust for the children until they reach the nominated age.  So considering that the trust relationship may last for a significant period of time if your children are quite young at the time of your death, it may not be appropriate for you to, say, appoint your parents as the executors, because there is an increased risk that they will pass away before being able to fulfil their duties as trustee – it would be more appropriate for you to, say, appoint a sibling or friend as the executor.

Making specific gifts

If you want to leave a specific gift, such as your car or your home, to a beneficiary, then it is risky referring to the specific car (e.g. by detailing the make, model and registration plate) or the specific property (e.g. by its address).  If you no longer own that specific car or property at the time of your death, the gift would fail.  Rather, it is recommended that you describe such assets with reference to the type of asset it is – that is, “any motor vehicle I own at the time of my death” or “my principal place of residence at the time of my death”.

Not specifying a guardian for your children

Under the Guardianship of Infants Act 1916 (NSW), the surviving parent becomes the guardian, unless there are exceptional circumstances or orders in place (e.g. the deceased parent has sole custody).  If the other parent is no longer alive, or able to care for your children, and if you have not nominated a guardian in your Will, then the most suitable person to be the children’s guardian would need to apply to the Family Court for a parenting order under Part VII Division 5 of the Family Law Act 1975 (Cth), to grant them the right to care for the child.  Of course, making an application to the Court could be avoided by nominating a guardian in your Will.

What does your Estate consist of?

Jointly held assets may not be able to be gifted under your Will.  Take this scenario – you own a property with Family Member A as joint tenants, but you would like Family Member B to inherit your entire Estate.  You will be only able to gift to Family Member B those assets that are owned in your name outright, or owned with someone else but as tenants-in-common (in which case you have a distinct share in the ownership).  The rules around joint tenancy provide that upon the death of a joint tenant, the remaining joint tenants automatically become the owners of the property, despite what is provided for in your Will.  Therefore in the above scenario, Family Member A would become the sole owner of the property upon your death.

Not keeping your Will up to date

We always remind clients to revisit their Will every few years, to make sure that it remains current and relevant.  Have any named beneficiaries passed away since you drafted your Will?  Has there been a breakdown in relationships which may warrant appointing different beneficiaries?

The Will has not been signed and witnessed correctly

Not only must a Will be worded correctly, and cover all necessary points, but it must also be signed and witnessed correctly.  Too many times we see Wills that clients have prepared previously themselves, which have not been signed correctly, which have been witnessed by a named beneficiary, or which have been subsequently amended and “initialled” at the time of the amendment – the client believing that such an amendment is valid.

Where is the original Will?

Even if the Will has been drafted, signed and witnessed correctly, it’s not worth anything to anyone if no-one can find it after you pass away.  Ideally, the original Will should be kept in a fire-proof safe, and the location shared with your named executors – as well as some other trusted family members.  Shire Legal is able to hold its clients’ Wills and other important documents in its safe custody, at no charge.

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It is for the above reasons that it is so important to ensure that when drafting your Will, you obtain proper legal advice and have the Will prepared by a lawyer.  Otherwise you run the risk that it is not a valid document, and your Estate may not be gifted in accordance with your wishes.

If you have questions about planning your estate, contact the team at Shire Legal on 9526 3444 or info@shirelegal.com.au