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Now is the time: Prepare Your Estate Plan

This may be the most important post to our blog as today we are covering the simple steps that everyone should take to protect your ‘estate’ for your family. Estate planning may seem like something that only the super wealthy or those with significant assets need to consider. However, you ay be surprised as to the value of what makes up your ‘estate’ with some assets overlooked and it may be a whole lot more than you realise. All people, with very few exceptions, possess an ‘estate’ and accordingly need an estate plan.

Now, you will always be ‘busy’ and there never seems to be a good time to deal with this but we say that right now is actually the perfect time to do it. We understand that it's hard to talk about death and it's even more difficult to talk about money that you may receive resulting from the death of a loved one. Doing all the planning now will ensure that the financial and emotional needs of your family are well documented and bedded down. It's something we don't like to think about but it's very important that we do so. It's about acting responsibly for those we love and who depend on us.

When you don’t have a current will or estate plan, the decision about who gets your assets will be made by someone else, usually the Courts, based on a pre-determined formula that distributes your assets based on state and federal legislation. Also, if you don't put in place the right strategies to protect your family wealth and keep it in your family bloodline, you might lose 100% of your wealth through legal fees from family provision claims.

A person can make a family provision claim for a share or a larger share from the estate of a deceased person if they are an 'eligible person', have been left out of a will, or did not receive what they thought they were entitled to receive. The definition of ‘eligible person’ is quite wide and includes:

  • spouse

  • ex spouse (can go back many years)

  • de factos (even a year)

  • children

  • grandchildren (financially supported)

  • financially supported individuals (friends).

Each State and Territory has the capacity for family provision claims to be made that allows anyone who is an ‘eligible person’, who feels as though they are entitled to more out of the estate, to make a claim. No win no fee lawyers take up these types of cases and in many cases, can result in the possibility of mounting legal fees, some of which may come out of the estate, if the claim is successful.

NSW is by far the worst, as in a recent case, a friend of the deceased was successful in making a family provision claim. NSW also has the concept of a 'notional estate', which broadly speaking, treats property, not only real estate such as jointly held property where the ownership passes to the surviving owner upon the death of the co-owner, but includes a number of types of assets including superannuation, that was not actually part of a deceased estate as if it was still notionally part of the deceased estate. Therefore, the family provision claim pool is expanded to claim certain assets that the deceased may have disposed of in the three years before their death.

Once there is a family provisions claim, this goes through a period of negotiation that ultimately ends up in the Supreme court. A notable example is the Miller and Taylor case which involved a $600,000 property that ended up five years later in the Supreme Court of WA, where the de facto was awarded 40% of the estate where under the will she was cut out of the estate as the will left this asset to the children. In this case there ended up being over $500,000 in legal fees incurred in defending and mounting the case, meaning she received 40% of the remaining value of the estate which had been eroded to about $100,000.

The current COVID-19 pandemic has been a worrying time for us all, particularly when it comes to our health and our finances. The threat of this pandemic has taught us that estate plans are important — no matter what. With the possibility of sudden, severe illnesses, disability, and even death, we encourage everyone to begin their estate planning process as soon as possible in 2022, so that you can have the peace of mind that your family will be taken care of in the event of your incapacity or death.

So HelloLedger has started 2022 with the goal that by the end of this year, for all of our valued clients, you will either have an up-to-date estate plan prepared, or have your current estate plan reviewed to ensure that it still accurately reflects your wishes.


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