Stephen Hardy

The annual new year clean out and declutter is well under way – and Australia’s leading specialist trustee company Equity Trustees is recommending that everyone includes a tidy-up of some key paperwork in the process.

“With 130 years’ experience of managing people’s estates and estate planning, we can say for sure that getting your Will and estate plan up-to-date will make you feel more organised and in charge of your 2019,” said Stephen Hardy, National Manager of Estate Planning for Equity Trustees.

“Even better – it is something you can and should leave in the hands of a specialist in this area – so you don’t have to do all the heavy lifting, you just need to be clear about a few key things before your appointment with your estate planning  lawyer and they will do the rest.”

The main estate planning documents you need to make sure are up-to-date include your Will and powers of attorney. These will contain your instructions including who you appoint as executor, nominating guardians if you have children,  how your assets should be distributed, and who will make decisions if you lose capacity.

“The main thing is to ensure your documents are up to date, legally valid, and reflect your current family and financial circumstances,” said Mr Hardy. “Things change over a year – now is the time to reflect on what that might mean for your estate plan.

“And if you don’t have at least a valid current Will, you should get one. If you have children, a superannuation fund, own a house or any other assets, then you need to have a Will. Getting your Will is not something you should postpone – you never know when it might be needed. Your family will thank you for being organised if they are in the unfortunate circumstances of losing you – they will already have a lot to deal with if that happens,” he said.

Mr Hardy urged everyone to make an appointment with an estate planning lawyer – and make the most of the appointment by preparing with the following five questions in mind:

1. Who should benefit (and why)?

Determine who you want to leave something to – and those you don’t want to leave anything to. Think about who you are responsible for, financially or otherwise.

2. Who to appoint?

Decide who you want to appoint to specific roles, including executor of the Will, and any powers of attorney, and have a conversation with them. Have a ‘back up’ plan if they can’t or won’t do it

3. Who gets what?

List your assets (and liabilities) – especially the (financially or emotionally) important ones. A list also helps your executor know where and what everything is.

4. What’s changed in the past 12 months?

Review any changes that have occurred in the past year, and ask your adviser if it means you need to update your Will.

5. Are my  documents in order?

Make sure all your documentation is accessible. This includes bank accounts, mortgage and insurance information, trust deeds, birth, marriage and divorce certificates, superannuation, and details of any investments.

“If you can give some thought to these five questions, you will be well prepared. Once your documents are completed and up to date, you get peace of mind that your documents are legally valid, current and will do what you need them to do, and your family is secure knowing that you have taken care of things.

“That’s a great start to the year,” Mr Hardy concluded.

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Stephen Hardy

A recent Court case in Western Australia has demonstrated the problems and risks of recording yourself on video outlining your instructions and wishes in the hope that it might be interpreted as your last intended Will.

In a recent Western Australian case*, the Supreme Court was asked to accept 4 videos made by Peter Pitman in 2011, 5 years before he died, as his last intended Will.

“In this case,” explained Stephen Hardy, National Manager of Estate Planning for Equity Trustees, “the Court was not persuaded that the videos were a ‘complete’ expression of Mr Pitman’s intentions regarding the distribution of his estate after his death, and concluded that Mr Pitman’s actions did not demonstrate that he intended the videos to be his last Will. As the Court did not accept the videos as Mr Pitman’s Will, Mr Pitman’s estate was to be distributed in accordance with legislation relating to the estates of persons who die without a Will.”

Mr Hardy said that this case was another example of the sometimes unusual estate planning matters that the Courts must decide on.

“From time to time we hear about an unusual document or other record being accepted by a Court as a person’s last Will. This may be an unsent text message, a document not witnessed correctly or a note written prior to surgery,” he said.

“In Mr Pitman’s case, the Court agreed that he was the person in the videos, and that he had the necessary understanding to execute a valid will, but a number of other factors came into play – including the quality of the videos, and that he had not told anyone about them.”

Mr Hardy said that the bottom line with all Wills is that in order to be valid, they must comply with the appropriate State laws specifying how a Will must be executed.

“This usually means that a Will needs to be a document in writing, correctly signed and correctly witnessed, however in Australia, unlike in many other countries, Courts are authorised to decide that in special circumstances the usual requirements for executing a Will do not apply,” Mr Hardy said.

“It is unusual, but in these exceptional situations, the Court can order that a record (e.g. document, video, audio recording) is the last Will, even where the record is executed incorrectly.”

Mr Hardy urged everyone making a will to consult an expert adviser who can guide you through the process and ask the “What if?” questions that need to be answered.

“Probably the most common reason for Wills to be challenged and overturned is that the person who made the Will didn’t receive adequate professional advice and assistance in the first place. Taking the time now can help ensure a smooth process later for those left behind,” Mr Hardy said.

* In the Estate of Peter Anthony Pitman (Deceased); Ex Parte Rosemary Machin Pitman & Another [2018] WASC 237 (7 August 2018)

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Stephen Hardy

Working with Aboriginal and Torres Strait Islander communities led Australia’s leading specialist trustee company, Equity Trustees to adapt and change the way it delivers traditional trustee services not only in their trustee and philanthropic areas – but in an unexpected area of their business: Estate planning.

A pilot, developed in consultation with the Noongar community in Western Australia, is planned for later in 2018 to test and refine a program designed to support the writing of Wills that specifically target the estate planning needs of Aboriginal people.

“Around 60% of the Australian population have a valid Will^[1] – which means one that will be effective and legal at the time it is needed. Indications are that the percentage is much lower for First Australians,” said Stephen Hardy, National Manager of Estate Planning, Equity Trustees.

Equity Trustees works with a number of Aboriginal communities, acting as trustee for community and native title trusts. Separately, Equity Trustees as trustee for around 500 philanthropic trusts is responsible for channelling funds into a range of causes and programs that aim to address Indigenous disadvantage.

“Most Australians use an accessible professional service to prepare their Wills.  For First Australians, particularly those in remote towns and communities, access to such specialised services is a barrier – and typical estate planning approaches don’t necessarily meet traditional estate planning needs,” explained Mr Hardy.

“Estate planning can help prevent burial disputes and protect customary law by ensuring clarity in how traditional objects are passed on, for example, as well as the usual things we associate Wills and estate plans with – the care of children and how property is distributed,” he said.

Equity Trustees plans to use the pilot experience to develop core estate planning services appropriate to the wider Aboriginal and Torres Strait Islander population, beginning with communities it currently partners with.

Managing Director, Mick O’Brien, said Equity Trustees recognised its corporate responsibility to actively pursue reconciliation.

“We recognise that National Reconciliation Week is a great opportunity to highlight all that can be done and all that still needs to be done to improve social and economic outcomes for Aboriginal and Torres Strait Islander people and communities,” Mr O’Brien said.

“We play a role at a corporate level with the adoption and implementation of our Reconciliation Action Plan, the many ways we build connections with Indigenous communities and serve them now, and how we share and develop access to our unique expertise to protect their wealth into the future,” he concluded.

[1] Having the last word: will making and contestation in Australia (March 2015)

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All marriages, gay or straight, need to address estate planning.

With the survey result on marriage equality in (62% voted yes), and the prospect of wedding celebrations for same sex couples on the horizon, one of Australia’s largest independent executors and holders of more than 50,000 Wills has urged those planning to marry to remember to review their Wills.

“There are some legal aspects that same sex couples will need to take into consideration if they plan to marry and they are the same for any couple planning to marry.” said Stephen Hardy, National Manager Estate Planning, Equity Trustees.

“Given most people marry with a commitment that includes ‘til death do us part’ then it is apt to take into account the estate planning implications of a marriage under Australian law. The main one is that marriage revokes any previous Will – unless the will was written specifically ‘in contemplation of a marriage’,” he explained.

“If the contemplation of marriage is not clear or worded correctly, your marriage will revoke your existing Will and any careful planning that may have been articulated in it will be lost.”

Mr Hardy said that while the rights of same sex couples have over time improved by changes in some laws relating to adoption, assisted reproductive therapies, inheritance and superannuation, one issue that legal marriage resolves is to put the relationship beyond question.

“One reason this is so important is that before a person can claim on the estate of their deceased partner, authorities such as Trustees and Courts require evidence that the relationship exists,” said Mr Hardy.  He added that while Australian States and territories have introduced relationship registers in an attempt to assist all unmarried couples prove their relationship status, the laws vary between locations.

“Giving same sex couples the right to marry under Australian law ends ambiguity. It would mean that at a time of grief and loss when a partner dies, they do not have the added burden of ‘proving’ the relationship was real.”

“This situation is especially stressful currently, when a person dies without a Will, leaving the remaining partner with the task of proving the relationship, proving their entitlement and dealing with estate distribution issues in accordance with different state laws.   Being able to readily prove the marital relationship will greatly assist a surviving spouse.”

“A great start to a marriage for everyone, including same sex couples now able to contemplate marrying, includes getting your estate planning in order and making sure the Will you have in place does what you intend it to do – before and after the marriage ceremony ,” Mr Hardy concluded.

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Stephen Hardy

It is often unintended but a Will created in the past – before grandkids, re-marriages, family disputes or upheavals, major investment or property acquisitions and even before retirement – can have all the ingredients for creating a costly family drama when you’re gone.

“There is an unfortunate tendency for people, having written their Will, to put it in the bottom drawer and forget about it. This is a mistake, and the consequences can mean more problems than not having a Will at all,” said Stephen Hardy, National Manager Estate Planning, Equity Trustees.

“The simple fact is that people’s circumstances change, and their Wills have to change to reflect this. The most obvious example is the break-down of a marriage. If a Will has not changed to acknowledge this, then there is the possibility of the former partner having a legal say in how the Will is administered.

“I know of cases where marriages have ended acrimoniously, the divorce has not been finalised and the Will has not been changed to reflect this bitter breakdown, with the estranged partner still being the executor and sole beneficiary of the Will. In most States, even when a divorce is finalised, that does not mean the Will is necessarily revoked. The fact that a divorce does not automatically revoke a Will surprises many people.

“The structure of a family, and changing dependents, can require a Will to be changed. The birth of new grandchildren, arrival of stepchildren or half-siblings could require a rewording of a Will to ensure everyone is treated appropriately. Another possibility is the development of chronic illness in a family member – physical or mental – or other issues which result in the family relationships, and needs, changing over time.”

While those are personal relationship issues, other financial changes can also have an impact; major acquisitions or losses, including inheritance or insurance payouts, business dealings and investments, employment entitlements and superannuation arrangements.

Mr Hardy suggests Wills should be reviewed about every three years, although obviously this should be brought forward when there is a major change in family or financial circumstances.

“It doesn’t have to be a demanding process, and it could save your family distress and a legal bill of thousands of dollars – well in excess of the money you would spend on a review.

“In my experience, it’s often the case when a Will doesn’t get changed to reflect new family circumstances that it can lead to costly court cases when an aggrieved party feels they have been poorly treated. Updating a Will can often mean this problem is avoided.”

Five key things to consider:

1. Changes in circumstances – the people in your life, and the assets you have
2. Your executor – people often nominate their spouse or a trusted friend around their age, but will it be feasible if they become older or ill? Can they manage the responsibility?
3. Your super – check your binding death benefit nomination (including when it needs to be renewed)  and other arrangements because a Will and your super will not automatically work together and tax outcomes can be vastly different
4. Any special arrangements needed to protect the inheritance of a vulnerable member of your family, for example someone with special medical needs.
5. Capital gains tax: If you own assets that have unrealised capital gains, it’s important that capital gains tax consequences are managed appropriately through the estate administration process. This is often overlooked and can have a very big impact on your tax liability.

“These are common points for many when it comes to Wills – but everyone is different. There is nothing surer in life than things changing. Don’t wait for a stressful period in your life to do it – get reviews on a regular basis with professional advice to make sure your Will does what you intend it to,” Mr Hardy concluded.

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