Trusts, Wills & Estates
KM Law offer personalised and cost-effective advice on managing and protecting your assets and succession matters.
Trusts
If done correctly, trusts offer an effective structure to protect or manage assets in a variety of situations. However, after the Trusts Act 2019 comes into force in January 2021 many trustees will find their existing trust isn’t fit for purpose. Beneficiaries will enjoy far greater transparency about the trust property and administrative workings. More rigorous administration is also necessary under these new laws, attracting professional trustee fees, annual reviews and accountant fees. The bottom line is that by February 2021 trusts will be more effort than they’re worth as they’re currently used, for many different situations.
There are a few circumstances where trusts remain useful tools. As a business, a correctly set-up trust can operate as creditor protection. Trusts could be utilised in blended family situations, aged-care, disability or estate planning, as well as true intergenerational succession planning to protect significant assets.
It is important to note that a trust cannot be set up with the primary objective of achieving any of the above benefits. In fact, the law prohibits you from transferring your assets to a trust to defeat creditors, avoiding asset or means tests and/or reducing your obligation to pay tax. An analysis of your particular circumstances will need to be undertaking when considering if a trust is beneficial for your family, asset protection, and tax situation.
The suitability of new and existing trusts may be in question under the Trust Act 2019, but they remain appropriate for many circumstances. Talk to KM Law for professional trust advice today.
Powers of Attorney
General Powers of Attorney
Under a general power of attorney, you appoint the attorney to legally act on your behalf either in relation to all of your affairs (e.g. the attorney can deal with your bank accounts and any property you own in your name), or only for specific matters (e.g. it is common for children to appoint their parents as powers of attorney for the child’s bank account prior to departing on their ‘big OE’).
The nomination of a general power of attorney is only possible while you have the required legal capacity. If you want an attorney to legally act on your behalf when you no longer have the capacity to manage your own affairs, you need to arrange an enduring power of attorney while you still have legal capacity.
Enduring Powers of Attorney
An enduring power of attorney (“EPA”) gives the attorney the right to legally act on your behalf if you become mentally incapable. You must be at least 18 years old and mentally capable when you sign the documentation.
There are two types of EPAs:
- A Property EPA gives your attorney the legal right to act on your behalf in regards to your property and financial affairs, e.g., property, business, bank accounts, shares and all other possessions, etc.
- A Personal Care and Welfare EPA gives your attorney the right to make legal decisions about your personal care in the event of your mental incapacity, e.g., what sort of medical treatment you should receive or whether you should go into care, etc. A personal care and welfare EPA only comes into effect when you become mentally incapable.
It is important that any EPA is well-drafted and sets out any conditions and restrictions on how your property should be dealt with or what you would like to happen in regards to your personal care.
There are many situations where one or both EPAs may be appropriate for you or one of your family. Speak to KM Law today to find out more.
Wills
A Will is an important document as it sets out your wishes and instructions for your property after your death. These commonly include directions for distributing your money and assets, the nomination of special gifts (e.g. jewellery) to certain people, the naming of legal guardians who will look after your bereaved children, and funeral arrangements.
A Will minimises the emotional strain on your family. If you do not have a legally valid Will upon your death (called dying ‘intestate’), your family will need to make an application to the Court for your assets to be distributed under the Administration Act 1969. Generally speaking, your assets will be distributed to your surviving spouse or partner and family in set proportions. If you do not have any relatives as defined in the Administration Act 1969, then your assets will be transferred to the Government. Dying intestate can potentially cost your estate thousands.
It is wise to update your Will on a regular basis to take account of any change in circumstances. For example, if you marry, your previous Will is automatically revoked (unless there is a provision to the contrary in the existing Will). In addition, an up-to-date and well-drafted Will minimises the likelihood of it being challenged, which unfortunately is all too common.
KM Law offers a standard individual Will for $350 + GST.
More complex Wills naturally attract higher fees, but are still a fraction of the legal costs that your estate would need to outlay to achieve a similar result with your passing intestate – if a similar result is possible at all.
Estates
Unless your estate is under $15,000 (e.g., the value of bank account funds, life insurance, shares, etc.) and does not include any interest in any land, the executors will need to apply to the Court for ‘Probate’. Probate is a court order which allows the executors to administrate your estate. We can assist the executors through the process from the application for Probate through to distribution of the estate to the named beneficiaries. You can rest assured that our clients and their families receive a great deal of care and understanding at this sensitive stage.
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