Genders and Partners https://www.genders.com.au Wills & Estate Planning in Adelaide Mon, 10 Jul 2017 01:14:42 +0000 en-AU hourly 1 12 Dangerous Stresses of Administering a Deceased Estate in SA https://www.genders.com.au/12-dangerous-stresses-of-administering-a-deceased-estate/ https://www.genders.com.au/12-dangerous-stresses-of-administering-a-deceased-estate/#respond Mon, 01 May 2017 12:52:06 +0000 http://genders.com.au/dev/?p=6548 12 Dangerous Stresses of Administering Deceased Estate

Sometimes the Executor of a Deceased Estate gets pressure from family and other beneficiaries to do questionable things in the administration of the Estate

Here are a few of the higher-risk demands frequently directed at nervous Executors by pushy relatives:

1. Obtain a Grant Of Probate As Quickly As Possible

Sometimes relatives and other potential beneficiaries might push an Executor to go faster than they should.  Almost always, those beneficiaries will have their own interests at heart, without necessarily considering your rights, duties and responsibilities as Executor, nor the other interests attaching to a Deceased Estate.  A prudent Executor might do well to remember the adage: Good. Fast. Cheap. Pick 2.

In South Australia, generally Probate cannot be applied for until at least 28 days after death.  In certain circumstances an urgent application can be made faster than this, however special reasons need to be proven.

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Sometimes the Executor of a Deceased Estate gets pressure from family and other beneficiaries to do questionable things in the administration of the Estate.

Here are a few of the higher-risk demands frequently directed at nervous Executors by pushy relatives:

1. Obtain a Grant Of Probate As Quickly As Possible

12 Dangerous Stresses of Administering Deceased Estate

Sometimes relatives and other potential beneficiaries might push an Executor to go faster than they should.  Almost always, those beneficiaries will have their own interests at heart, without necessarily considering your rights, duties and responsibilities as Executor, nor the other interests attaching to a Deceased Estate.  A prudent Executor might do well to remember the adage: Good. Fast. Cheap. Pick 2.

In South Australia, generally Probate cannot be applied for until at least 28 days after death.  In certain circumstances an urgent application can be made faster than this, however special reasons need to be proven.

2. Take Shortcuts

People who do not understand the intricacies of Probate law might attempt to persuade you of the merits of taking shortcuts in the administration of a Deceased Estate, by minimising the importance of gathering necessary information, documenting things properly, and following correct procedures.  Those people (possibly innocently, or perhaps recklessly) are encouraging you to take risks for their benefit .

You need to be confident that the full assets, liabilities, income and expenses of the Estate have been determined prior to distributing the Estate. If you do not include all assets & liabilities or  incorrectly value some of them, you are exposing yourself personally to significant legal and financial risk.

3. Don’t Instruct A Specialist Lawyer

Probate is a specialised area of law.  Don’t be fooled into believing the lady at the hairdresser or the bloke down the pub who says that it is easy to do this yourself, or that the lawyer who handled your divorce, or your uncle’s drink-driving offence, can easily do this. If you pay peanuts, you’re very likely to get monkeys.

4. Don’t Apply For Probate

While Probate is not always required in every Estate, there are generally procedures that have to be conducted in every Estate. Most people will not know whether or not Probate is required, and risk creating substantial legal complications which will need to be sorted out later on.  It is far better to take specialist advice to get a Deceased Estate properly administered and fully finalised at an early date. It will be cheaper in the long run, and you have peace of mind that a huge mess won’t be left for another day (at greatly increased expense).

5. Don’t Need Probate Because There’s A Will

Sometimes people will try to tell you that you only need Probate if there is no Will.  This is a classic example of a little knowledge being a dangerous thing.  In fact it is the other way around: you cannot apply for Probate if there is no Will. If there is a valid Will, then Probate will probably be required.

6. A Formal “Reading of the Will”

Sometimes a “bush lawyer” will attempt to demand a formal reading of the Last Will and Testament of a Deceased person, and try to exert pressure on you to facilitate this for them. These people have probably been brought up on a diet of American television, as some US states use this custom of having a formal reading of the Will; however no Australian State uses this custom.

7. Immediately Distribute The Estate After Probate

Similar to number 1 above, eager beneficiaries may exert pressure upon you to distribute the assets of the Estate as a matter of urgency. The urgency typically lies in their own financial affairs, where they are desperate to get their hands on their inheritance.  Be cautious. Claims can still be made against the Estate for up to 6 months afterwards. Has any person indicated that they may wish to contest the Deceased’s Estate, or claim further or better provision under the Deceased’s Will? Has anyone made enquiries as to the financial position of the Estate?  These sorts of enquiries would put the prudent Executor on notice that there may be a potential contest of the Will or the Estate lurking in the shadows.

8. Forgive Debts Owed To Or By The Estate

12 Dangerous Stresses of Administering Deceased Estate

A debt owed to the Estate is an asset of the Estate.  An Executor does not have a unilateral authority to forgive or waive such a debt.  As Executor, you need to ascertain whether any person or creditor has claimed that the Deceased owed them money; whether the Estate is liable to pay any debts of the Deceased, and the priority of one type of payment over another.

Similarly you need to know whether any potential beneficiary owes any monies to the Deceased and their Estate;

9. Not Call Or Accounting Of Expenditure Made Under PoA

As Executor you need to satisfy yourself as to whether there are any suspicious circumstances surrounding the management of the Deceased’s affairs prior to their death (for example by a relative who had power of attorney to attend to the Deceased’s financial affairs).  Sadly, elder abuse is very common, and frequently takes the form of financial abuse of an enduring Power of attorney by an unscrupulous agent who uses their authority under power of attorney to improperly access the Deceased person’s bank accounts prior to death. If there is evidence of improper behaviour by a trusted fiduciary such as the agent under power of attorney, the Executor of the Deceased Estate may have a duty to conduct formal legal enquiries and investigations in an attempt to recover the stolen money.

10. Not Deal with Deceased’s Debts & liabilities

Part of your duty as Executor is to identify, locate and document ALL of the Deceased’s assets and liabilities, which must find expression in the statement of assets and liabilities filed at court as part of the Probate process.  If you omit any asset or liability, then this will cause problems later on, and you may be personally called to account for why you have done this.  In certain circumstances you may have to make good any amount still owing to the Estate.  So don’t be persuaded by an eager beneficiary to cut corners – it probably won’t be their neck on the chopping block if things go wrong later on!

11. Not Finalise Deceased’s Tax

An Executor has the duty to enquire into the Deceased’s tax affairs, and ensure that these are finalised appropriately. Sometimes there will be a refund due to the Deceased Estate from the ATO, and sometimes there will be a tax debt still to be paid.  An Executor who deliberately omits this aspect of the administration of a Deceased Estate risks personal exposure to the debts, fines and penalties.

12. Not Honour The Terms Of The Will

Occasionally, beneficiaries might try to persuade an Executor to effectively “rewrite the will”, because they would prefer to receive assets in a manner different to what is expressed in the will.  An Executor should be extremely cautious about attempting this exercise, and should only consider doing so with the advice and assistance of a lawyer experienced in the administration of Deceased Estates.

Distributing an Estate too fast, too slow, and without obtaining proper legal advice, can potentially result in you as the Executor becoming personally liable for some serious financial and legal consequences.  Don’t risk it.  Don’t give-in to those pressures.  Protect yourself and the Estate by contacting specialist Probate lawyers Genders & Partners today.

Rod Genders is a senior Australian lawyer specialising in trusts, Wills and estate planning, accident compensation, and probate and deceased estate administration in Adelaide and all over South Australia. His boutique specialist law firm, which was founded on 1848, is one of the oldest and most respected in Australia. Rod is also a prolific author and speaker.  Some of his articles and books on Wills, Probate, Trusts, Estate Planning, Asset Protection and Retirement Planning may be found at www.genders.com.au.

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Earning the Age Pension in Australia https://www.genders.com.au/earning-age-pension-in-australia/ https://www.genders.com.au/earning-age-pension-in-australia/#comments Sun, 09 Apr 2017 04:27:38 +0000 http://www.genders.com.au/?p=11431 Genders and Partners | Top 10 Estate Planning Predictions For Australia - Lawyer Adelaide

The Age Pension was initially introduced in Australia in 1909 when the average life expectancy was below the eligibility age. It was thought that most people would not live long enough to receive it, and those that did would not get it for long.

The pension was designed to provide income support to older Australians who meet age and income requirements.

It is funded by Australian taxpayers and it accounts for a huge and growing chunk of our national expenditure.

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Genders and Partners | Top 10 Estate Planning Predictions For Australia - Lawyer AdelaideGenders and Partners | Top 10 Estate Planning Predictions For Australia - Lawyer Adelaide
The Age Pension was initially introduced in Australia in 1909 when the average life expectancy was below the eligibility age. It was thought that most people would not live long enough to receive it, and those that did would not get it for long.

The pension was designed to provide income support to older Australians who meet age and income requirements.

It is funded by Australian taxpayers and it accounts for a huge and growing chunk of our national expenditure.

Nearly 80 per cent of people over the age 65 are receiving some form of payment from the government. That’s more than 10% of the entire population of Australia. And that does not include disability pensioners or self-funded retirees.

The numbers of people in retirement are growing.  And they are living longer.  And they are requiring (and demanding) increasingly expensive care, medications, treatment and accommodation.

What is even scarier is that the numbers of people left remaining in the workforce behind them  to pay for it all, are falling.  Families don’t have as many kids as they used to, so there are fewer ‘workers’ left in the system to pay for the older generations ahead of them in line.

The Australian age pension system is different from most other countries, which often sets limits on a citizen’s pension depending on how much they have personally contributed to it throughout their working life.

But in Australia it is just a flat rate regardless of contribution, although it is subject to eligibility tests for income and assets. In other words, if you earn or own more than a set amount, you won’t receive the full pension.

At present the family home is excluded from the assets-test.

Is it conceivable that there may come a time when – in addition to annual income tax returns – everyone will be required to disclose a personal inventory of assets and keep the government informed of changes?  In this manner, the government will know if you sell or give away any assets, and they will reduce your eligibility to receive government assistance.

Could the government also consider restricting pension benefits to a percentage of the total amount of tax paid by the person during their lifetime?  This would be consistent with the modern trend towards ‘user-pays’ and broadly in keeping with the age pension systems of many other countries.

I predict that the Australian government will introduce tighter rules on how much senior Australians can own and earn and still qualify for a part pension.

Enjoy this article? Check out the full report containing all 10 estate planning predictions from senior Australian lawyer Rod Genders.  Valuable insights to prepare for the future and help protect yourself, your family and your assets.

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Powers of Attorney die with their owners https://www.genders.com.au/powers-of-attorney-die-with-their-owners/ https://www.genders.com.au/powers-of-attorney-die-with-their-owners/#respond Tue, 07 Mar 2017 06:03:27 +0000 https://www.genders.com.au/?p=12119 powers-of-attorney-die-with-their-owners

In the UK recently a person has been fined the equivalent of many thousands of dollars for using an expired power of attorney to withdraw money from the principal’s bank account after her death, even though he acted with the consent of her sole beneficiary (her son).

The agent was a close friend of the deceased, and of her only son. Although aware of her death, over the subsequent weeks he made three withdrawals from her personal bank accounts.

Some of this money went towards funding a property transaction which had been specifically authorised by the deceased before her death.

Other funds were either used for legitimate and authorised estate expenses, or were not used at all and later returned to the estate account.

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powers-of-attorney-die-with-their-owners
In the UK recently a person has been fined the equivalent of many thousands of dollars for using an expired power of attorney to withdraw money from the principal’s bank account after her death, even though he acted with the consent of her sole beneficiary (her son).

The agent was a close friend of the deceased, and of her only son. Although aware of her death, over the subsequent weeks he made three withdrawals from her personal bank accounts.

Some of this money went towards funding a property transaction which had been specifically authorised by the deceased before her death.

Other funds were either used for legitimate and authorised estate expenses, or were not used at all and later returned to the estate account.

Although the estate, and its sole beneficiary, have not lost from the transactions, the agent was fined because the cash transfers were done using an invalid power of attorney that had automatically lapsed on the deceased’s death.

Be warned: when a person dies, their accounts are (or ought to be) frozen at date-of-death, and withdrawals should not take place unless fully authorised as a legitimate part of the administration of the deceased estate. ALL powers-of-attorney previously created by the deceased die with them, and have no further legal force or validity after their death. Anyone attempting to use an expired power-of-attorney is likely to find themselves in serious trouble, as they will be committing a criminal offence.

Don’t be tempted to take short-cuts. Seek professional advice from an experience Wills & Probate lawyer to sort through the legal complexities of administering a deceased estate.

Contact us today on (08) 8212 7233 to arrange a FREE telephone consultation.

SPECIAL REPORT “7 Things You Must Know
Before You Make Your Will”

In this report you will Learn:

Genders and Partners | Top 10 Estate Planning Predictions For Australia - Lawyer Adelaide

  • Why home-made Wills can be a LOT more expensive than you might think.

  • The secret weapons used by the rich & powerful to protect their assets, and transfer their wealth two or three generations ahead.

  • How Estate and Trustee Companies make BIG money from “free” Wills.

  • The Most Common Estate Planning Mistakes, how they can cost your family a fortune, and How to Avoid Them.

  • The Elements of a Sound Estate Plan – why a Will alone is not enough.

  • How to Make Sure Your Assets Stay in Your Family and are not lost to creditors, lawsuits or ex-spouses.

  • How to guard against challenges to your Estate after you’re gone.

NEED ADVICE? JUST ASK US A QUESTION. (business hours only)

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Estate Planning for Problem Children in SA https://www.genders.com.au/estate-planning-for-problem-children/ https://www.genders.com.au/estate-planning-for-problem-children/#respond Fri, 24 Feb 2017 09:05:06 +0000 http://genders.com.au/dev/?p=5939 Estate Planning for Problem Children

An increasing number of Baby Boomer parents are concerned about leaving unconditional bequests in their Wills to their grown-up children, for fear that they will squander their inheritance.

As parents we love our children and want them to receive the benefit from our hard work after we’re gone.

However, some kids just seem to attract hard luck and trouble, don’t they?  They can be immature, have difficulty holding a job, or are just poor money managers. Some develop a bad and expensive habit, like gambling, drugs or alcohol, while others suffer mental illness.

Then there are the risky-business kids, who constantly fear the door-knock from the bailiffs because they run their businesses on the knife-edge of bankruptcy and litigation.

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Estate Planning for Problem Children in SA

An increasing number of Baby Boomer parents are concerned about leaving unconditional bequests in their Wills to their grown-up children, for fear that they will squander their inheritance.

As parents we love our children and want them to receive the benefit from our hard work after we’re gone.

However, some kids just seem to attract hard luck and trouble, don’t they?  They can be immature, have difficulty holding a job, or are just poor money managers. Some develop a bad and expensive habit, like gambling, drugs or alcohol, while others suffer mental illness.

Then there are the risky-business kids, who constantly fear the door-knock from the bailiffs because they run their businesses on the knife-edge of bankruptcy and litigation.

Also, many parents are concerned about their child’s choice of spouse. Golddiggers of both sexes abound, particularly in these difficult economic times, and a high percentage of all marriages end in divorce.  None of us wants our hard-earned assets to end up leaving the blood-line, and going to the ex-spouse of our child in a divorce and property settlement.

And it isn’t just marriage that can lead to “sexually-transmitted debt”.  In South Australia, any two people (of any combination of gender) can begin to acquire property rights in each other’s assets after as little as 3 years’ cohabitation.

Sometimes Boomers want to protect legacies for their beloved grandchildren. A common fear is that grandchildren from your child’s first marriage could be disinherited by a son- or daughter-in-law from a second marriage.

Just as frequently Boomers just want to make sure that the money will still be there for their kids,  despite the kids’ flaws and shortcomings.

It’s a very good idea to explore your estate planning options, by contacting a specialist lawyer who is experienced in estate planning in South Australia.

Founded in 1848, Genders & Partners is the oldest law firm in South Australia.  We choose to specialise in just a few areas of law closest to most families, so that we can provide the legal services that matter most to you.

Our experienced estate planning team can discuss many estate planning tools and techniques including:

  • encouraging (and even paying for) children to sign prenuptial agreements;
  • creation of protective trusts;
  • titling of assets for joint ownership;
  • consideration of insurance options.

Choosing the right estate planning lawyers can make a huge difference in ensuring proper distribution of your assets after death, minimising or avoiding any legal issues that may arise, and protecting your hard-earned assets. Most importantly, it helps save your family all the trouble, as well as thousands of dollars in legal fees and taxes, after your death. For friendly and expert assistance from specialist Estate Planning lawyers in Adelaide metro area, contact Genders & Partners – the oldest (and one of the most respected) law firm in South Australia. We have been protecting South Australians and their families since 1848.

Genders and Partners can help you to protect yourself, your family and your assets.  Let us assist you with Estate Planning in Adelaide metro area and all over South Australia, for your family’s future.

Contact us today on (08) 8212 7233 to arrange a FREE telephone consultation.

SPECIAL REPORT “7 Things You Must Know
Before You Make Your Will”

In this report you will Learn:

Genders and Partners | Top 10 Estate Planning Predictions For Australia - Lawyer Adelaide

  • Why home-made Wills can be a LOT more expensive than you might think.

  • The secret weapons used by the rich & powerful to protect their assets, and transfer their wealth two or three generations ahead.

  • How Estate and Trustee Companies make BIG money from “free” Wills.

  • The Most Common Estate Planning Mistakes, how they can cost your family a fortune, and How to Avoid Them.

  • The Elements of a Sound Estate Plan – why a Will alone is not enough.

  • How to Make Sure Your Assets Stay in Your Family and are not lost to creditors, lawsuits or ex-spouses.

  • How to guard against challenges to your Estate after you’re gone.

NEED ADVICE? JUST ASK US A QUESTION. (business hours only)

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7 Critical Mistakes Made by Parents of Special Needs Children https://www.genders.com.au/7-critical-mistakes-made-by-parents-of-special-needs-children/ https://www.genders.com.au/7-critical-mistakes-made-by-parents-of-special-needs-children/#respond Thu, 23 Feb 2017 05:52:24 +0000 https://www.genders.com.au/?p=12263 7 Critical Mistakes Made by Parents of Special Needs Children

Parents of a child with special needs face unique challenges when planning their estates, and unless they address them correctly, they risk making mistakes that could have long-term, costly consequences for their child.

For example, they may make the child ineligible for important federal government benefits once he or she becomes an adult, and they may leave their child without the financial resources he or she needs to live the same kind of life they provided when they were alive.

The mistakes that parents of a special needs child often make when they are planning their estates can have long-term negative consequences for the child and significantly impact his or her lifestyle once the parents are deceased or become incapacitated and can no longer look out for their special needs son or daughter.

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7 Critical Mistakes Made by Parents of Special Needs Children

Parents of a child with special needs face unique challenges when planning their estates, and unless they address them correctly, they risk making mistakes that could have long-term, costly consequences for their child.

For example, they may make the child ineligible for important federal government benefits once he or she becomes an adult, and they may leave their child without the financial resources he or she needs to live the same kind of life they provided when they were alive.

The mistakes that parents of a special needs child often make when they are planning their estates can have long-term negative consequences for the child and significantly impact his or her lifestyle once the parents are deceased or become incapacitated and can no longer look out for their special needs son or daughter.

Here are some of the common mistakes and how you can avoid them.

1.Disinheriting the Child

Parents of children with special needs typically rely on Federal Government programs, like Centrelink and Medicare, to help pay for their basic needs such as medical treatment, food and accommodation. Therefore, to ensure that their special needs child will be eligible to participate in these programs, parents are sometimes advised to disinherit him or her.

However such Government programs typically finance a very minimal standard of living, and unlike adult children without special needs, special needs children may not be able to supplement those benefits through paid work.

A far better option is for parents to set up a Special Disability Trust to benefit their special needs child. This trust lets parents leave their special needs child an inheritance without jeopardizing his or her eligibility for Government benefits. Furthermore, a Special Disability Trust can also benefit a special needs child should his or her parents become incapacitated. Anyone who wants to provide for a child with special needs — like grandparents, for example — can establish a Special Disability Trust or contribute to one that has already been set up.

A Special Disability Trust is complicated, so parents should not try to establish one themselves; they need the help of an experienced lawyer who specialises in estate planning.

2.Waiting Too Long

None of us know when we will die or if we will become incapacitated, so it’s essential that we plan our estates sooner rather than later. Ignoring this advice can have very negative consequences for the people we leave behind, including minor children and especially minors with special needs. Among other things, parents’ failure to plan can mean that their children don’t have the financial resources they need to continue living the kind of life they enjoyed while their parents were alive. Don’t put this off!

3.Failing to Make Provision for the Leftover Funds in the Trust

Another frequent mistake occurs when a Special Disability Trust fails to include a provision for what happens to the remaining trust funds after the special needs beneficiary has died. A suitable clause provides that any money remaining in the trust when the beneficiary dies is paid back to the family of the parent rather than the government or under the Will of the beneficiary.

4.Choosing the Wrong Trustee

Special Disability Trusts are very complex, so choosing the right person as trustee is important – someone who understands the sometimes confusing rules that apply to special needs trusts. Whoever is chosen as trustee should understand the parents’ objectives, and is able to invest the trust assets in a manner that is most likely to meet them, and is trustworthy & ethical.

5.Failing to Invite Contributions from Others to the Trust

A key benefit of creating a Special Disability Trust is that the beneficiary’s extended family and friends can make gifts to it while they are alive or at their deaths. For example, they can name the trust as the beneficiary of the assets in their Will, and/or they can name the trust as the beneficiary of their life insurance policy or retirement benefits. There are limits upon the amounts which can be placed in the trust.

6.Relying on Siblings to Use Their Own Money to Care for a Special Needs Brother or Sister

Some parents assume that their other children will use their own assets or inheritances to provide for their special needs sibling. Although this may be a successful temporary strategy, assuming those other children are financially secure and have money to spare, it’s a risky one long-term. For example, one or more of those children may develop financial problems (divorce is commonly disruptive in this way) and become no longer able to help support their special needs sibling, or they may decide that their priorities have changed and so they want to use their financial resources in some other way. Or, maybe the sibling(s) who has been providing the support dies or becomes incapacitated while the special needs sibling is still alive.

Also, when parents rely on their other children to pay for the needs of their special needs sibling, they have no assurance that those children will care for that child as thoughtfully and completely as they did while they were alive.

Finally, it’s not unusual for the siblings of a child with special needs to feel the burden of a great sense of responsibility for their brother or sister. Sometimes this can feel like a big emotional burden and even cause them to resent their special needs sibling. Therefore, it’s always best if parents assume responsibility for the future care, housing and well-being of their special needs child through their estate plan and not assume that their other children will take care of it.

7.Not Keeping the Estate Plan Up to Date

Estate planning rules and Government regulations change constantly. Therefore, it’s dangerous to assume that an estate plan developed to provide for the needs of a special needs child will continue to meet that goal over time. Therefore, it’s essential that the parents of a special needs child revisit their estate plan frequently with the help of their specialist estate planning lawyer and that they make all necessary changes. It’s the only way that parents can ensure that their goals and objectives will be met.

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Special Disability Trusts in South Australia Book Cover

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Special Needs Trusts https://www.genders.com.au/special-needs-trusts/ https://www.genders.com.au/special-needs-trusts/#respond Tue, 21 Feb 2017 00:25:24 +0000 https://www.genders.com.au/?p=12237 Special Needs Trusts

Special needs beneficiaries (often children) are those that need extra care because of a disability, such as autism, cerebral palsy, mental retardation, or other physical or mental condition. Many Australian parents have children with special needs and know all too well about the extra care they require, the government benefits they rely on, and the financial challenges they face.

Many families with special needs children need to rely on Medicare and Centrelink to help with the high cost of health care. This financial support can continue throughout the child’s life. Parents and grandparents of special needs children and adults may want to provide for their disabled loved ones in their Will but they do not want to risk losing the child’s eligibility for public benefits. A Special Disability Trust is the answer.

A Special Disability Trust (sometimes called a Special Needs Trust) allows a person with a physical or mental disability to have assets held in a particular type of government-approved trust and those assets will be excluded from consideration for purposes of qualifying for certain government benefits.

Expenses that can be paid for by the trust may be such items as special medical aids & equipment, medical & dental needs, medication, accommodation, entertainment & transportation needs.

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Special Needs TrustsSpecial needs beneficiaries (often children) are those that need extra care because of a disability, such as autism, cerebral palsy, mental retardation, or other physical or mental condition. Many Australian parents have children with special needs and know all too well about the extra care they require, the government benefits they rely on, and the financial challenges they face.

Many families with special needs children need to rely on Medicare and Centrelink to help with the high cost of health care. This financial support can continue throughout the child’s life. Parents and grandparents of special needs children and adults may want to provide for their disabled loved ones in their Will but they do not want to risk losing the child’s eligibility for public benefits. A Special Disability Trust is the answer.

A Special Disability Trust (sometimes called a Special Needs Trust) allows a person with a physical or mental disability to have assets held in a particular type of government-approved trust and those assets will be excluded from consideration for purposes of qualifying for certain government benefits.

Expenses that can be paid for by the trust may be such items as special medical aids & equipment, medical & dental needs, medication, accommodation, entertainment & transportation needs.

Parents or other family members of disabled individuals who want to provide for a disabled beneficiary can establish a Special Disability Trust as part of their own estate plan and then that trust will be established upon their death.

Sometimes fear or uncertainty can lead parents to refrain from properly planning the necessary care for their children. Special needs children generally have significant financial needs, including medical, residential and mental health care costs, which have increased dramatically in recent years.

Parents of special needs children have several fears. These often include loss of government benefits; placing the financial burden of caring for the special needs child on a sibling; reduction in inheritance for the special needs child due to taxation issues; and being unable to provide an inheritance to their non-disabled children and grandchildren.

Parents can sometimes become paralysed with indecision when confronting the dilemma of who will provide those resources after the parents are deceased? Leaving assets outright to another individual for the purpose of caring for the child entails other risks, including divorce, bankruptcy or fiscal mismanagement, that might preclude proper delivery of those assets.

A Special Disability Trust represents a significant planning opportunity for parents of special-needs children. Centrelink permits the assets of a disabled person to be placed (without endangering benefits) into such a trust if it is created by a third party such as a parent, grandparent or Court.

Funding for a Special Disability Trust can come from multiple sources, such as discretionary contributions (while parents are alive), probate distributions, a living trust, pension plan or other sources. Life insurance on a parent or care-giver is a practical and frequently-used funding vehicle, due to its flexibility and ability to create an “instant estate” at a relatively low cost. Indeed, this may be the only means by which the family can afford to provide adequate security after the death of the parents. This may become important in case government funding is reduced or eliminated, or the child otherwise becomes ineligible for government assistance or if government care is not desired.

Life insurance is also a means of providing some confidence to the parent in determining how their child’s expenses will be paid after their death. The life insurance proceeds can be kept out of the taxable estate of the parents and provide full benefit to the special needs beneficiary.

The drafting of the Wills and Special Disability Trust requires an experienced attorney and will need life-long monitoring. A responsible trustee should be appointed to ensure that the child’s needs are met and that he or she continues to qualify for all the benefits available.

Summary

Many parents lie awake at night, wondering what will happen to their special needs children when they will no longer be around to take care of them.

Instead of worrying, parents can be proactive and establish a Special Disability Trust.

Instruct a senior lawyer who specialises in estate planning. It is also a good idea to have the special-needs beneficiary assessed by Centrelink, to be sure it is within the boundaries of the law. Laws can vary from time to time, so be sure to find a lawyer with experience in this area of law, and make it legal by putting it in writing – don’t just tell family members of your wishes, or the money won’t be protected and who is to say that your wishes will be carried out the way you expect?

With a little planning, you will soon be able to sleep nights again.

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Death Duties (I told you so) https://www.genders.com.au/death-duties-i-told-you-so/ https://www.genders.com.au/death-duties-i-told-you-so/#respond Fri, 17 Feb 2017 03:23:10 +0000 http://genders.com.au/dev/?p=8692 Death Duties (I told you so)-

Until March 2016, the Court fee for a Grant of Probate in Common Form in South Australia was a flat $1,114.00, regardless of the value of the estate.

This changed from 28th February 2016, but only the very smallest estates saw any reduction in the Court fee. Everyone else is now paying more. And then the State Government increased these fees again just 4 months later!

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Death Duties (I told you so)
Until March 2016, the Court fee for a Grant of Probate in Common Form in South Australia was a flat $1,114.00, regardless of the value of the estate.

This changed from 28th February 2016, but only the very smallest estates saw any reduction in the Court fee. Everyone else is now paying more. And then the State Government increased these fees again just 4 months later!

The new fee structure will be:

ESTATE VALUE PRE 28.02.16 FEE 28.02.16 – 30.06.16 FEE 01.07.16 ONWARDS FEE
Up to $200,000 $1,114.00 $750.00 $763.00
$200,000 – $500,000 $1,114.00 $1,500.00 $1,526.00
$500,000 – $1 million $1,114.00 $2,000.00 $2,034.00
Over $1 million $1,114.00 $3,000.00 $3,051.00

Don’t blame the Court or the lawyers – this fee is entirely a South Australian Government decision. The Court does not keep this fee – it goes into general revenue for the State Government to spend on, well … whatever it wants.

So although the State Government does not call it a Death Duty, if it looks like a duck and quacks like a duck …

I have been warning about the return of Death Duties for years now, and I continue to do so. This is not the end of it. See Chapter 7 of my free special report Top 10 Estate Planning Predictions, where I predict that the Federal Government will also reintroduce some form of inheritance tax or death duty.

Fore-warned is fore-armed.

Enjoy this article? Check out the full report containing all 10 estate planning predictions from senior Australian lawyer Rod Genders.  Valuable insights to prepare for the future and help protect yourself, your family and your assets.

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Advance Care Directives in South Australia https://www.genders.com.au/advance-care-directives-in-south-australia/ https://www.genders.com.au/advance-care-directives-in-south-australia/#comments Fri, 10 Feb 2017 13:43:11 +0000 http://genders.com.au/dev/?p=6705 Advance Care Directives in South Australia

Since 1st July 2014 this new style of document in South Australia has replaced the older documents known as Medical Power of Attorney, Enduring Power of Guardianship and Natural Death Anticipatory Directive.

This Advance Care Directive document allows you to appoint one or more persons to act as your Substitute Decision Maker, to make decisions for you about your medical & health care treatment and accommodation issues if you’re unable to do so for yourself. This can make all the difference between ensuring your wishes are met in very stressful times, and having treatment and care almost forced upon you against your wishes.

An Advance Care Directive is a legal form that allows people over the age of 18 years to state their wishes, preferences and instructions for future health care, end of life, living arrangements and personal matters and/or

An Advance Care Directive cannot be used to make financial decisions.  This requires a different document known as a Power of Attorney.

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Advance Care Directives in South Australia
Since 1st July 2014 this new style of document in South Australia has replaced the older documents known as Medical Power of Attorney, Enduring Power of Guardianship and Natural Death Anticipatory Directive.

This Advance Care Directive document allows you to appoint one or more persons to act as your Substitute Decision Maker, to make decisions for you about your medical & health care treatment and accommodation issues if you’re unable to do so for yourself. This can make all the difference between ensuring your wishes are met in very stressful times, and having treatment and care almost forced upon you against your wishes.

An Advance Care Directive is a legal form that allows people over the age of 18 years to state their wishes, preferences and instructions for future health care, end of life, living arrangements and personal matters and/or

An Advance Care Directive cannot be used to make financial decisions.  This requires a different document known as a Power of Attorney.

An Advance Care Directive can include Do Not Resuscitate and similar end-of-life commands. If you get to the end of your natural life-span, and there’s no hope of recovery, you might want to tell your doctors not to revive you once you die. But what happens if you can’t express your wishes at that point? This document allows you to tell your doctors what you want in advance – so you don’t end up like the tragic story of American lady Terry Schiavo (who was in a coma for 12 years before the Courts finally agreed with her husband in a battle against her parents to remove the artificial life-support.)

That’s a lot of pain and trauma you can spare your family. Note: this is NOT euthanasia. It is not taking steps to end your life prematurely. It is simply preventing (if unwanted) the artificial prolonging of life, beyond the point which God or Nature intended, and ONLY in precisely-defined and very specific circumstances. A lot of people have very strong opinions about end-of-life decisions. Whatever your beliefs, isn’t it better to take control (and responsibility) for them, and not force your loved-ones to have to make an agonising moral decision on your behalf, or battle opposing opinions?

Some people might be tempted to create a DIY Advance Care Directive. Be VERY careful!  There are plenty of tricks and traps people can fall into here, and any mistakes you make probably will not become apparent until the document needs to be used.

This often in a crisis situation, when your loved ones are stressed and frightened.  The last thing they’ll need then is to try to fix the problems and procedural irregularities you made in your innocence, when you tried to wade through the 49-page ACD booklet. Some of those problems will not be able to fixed at all.  Don’t forget, once you have lost your capacity (which is the very eventuality for which you are creating this Advance Care Directive in the first place) you won’t be able to fix those problems at that point.  It will be too late.

It is like insurance.  You cannot apply for insurance after the bushfire has swept through your property.  You need to get it in place and properly setup BEFORE the disaster strikes.  So it is with Advance Care Directives.  You and your family NEED you to get this right, and it must be done before you lose your capacity.  No-one can predict the future, and illness & accidents can happen at anytime to anyone.  Don’t put this off.

Enjoy this article? Check out the full report containing “A Guide for Beneficiaries of a Deceased Estate in South Australia” from senior Australian lawyer Rod Genders.

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Estate Planning must include Digital Assets https://www.genders.com.au/estate-planning-must-include-digital-assets/ https://www.genders.com.au/estate-planning-must-include-digital-assets/#respond Wed, 11 Jan 2017 01:42:33 +0000 https://www.genders.com.au/?p=12208 What are digital assetsHow many things in your life do you manage or store on your computer, tablet, smartphone or online? Like many people today you probably access photos, videos, music, e-books, blogs, movies, emails, conversations, social media, games, bank accounts, medical records, and even your identity - all online. All of these are called “digital assets” and they may be of financial or sentimental value to you and your family. They can be just as precious and important as physical assets that you can touch. They should be part of your general planning for what happens when you die or if at any time you are unable to manage your own affairs.

Why are Digital Assets important?

Within just a few years, digital assets have become important in many areas of our lives. We must plan for what happens to our digital assets on death or when we lose mental capacity, for a number of reasons:

Financial Value; such as PayPal accounts, virtual bank accounts, online gaming accounts; bitcoin; photographs; popular domain names or online businesses;

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What are digital assets
How many things in your life do you manage or store on your computer, tablet, smartphone or online? Like many people today you probably access photos, videos, music, e-books, blogs, movies, emails, conversations, social media, games, bank accounts, medical records, and even your identity – all online. All of these are called “digital assets” and they may be of financial or sentimental value to you and your family. They can be just as precious and important as physical assets that you can touch. They should be part of your general planning for what happens when you die or if at any time you are unable to manage your own affairs.

Why are Digital Assets important?

Within just a few years, digital assets have become important in many areas of
our lives. We must plan for what happens to our digital assets on death or when we lose mental capacity, for a number of reasons:

Financial Value; such as PayPal accounts, virtual bank accounts, online gaming accounts; bitcoin; photographs; popular domain names or online businesses;

Sentimental Value; in this “digital age” personal assets such as photos or emails may not be in physical form, instead they may be stored on a smartphone, a flash drive, an online photo sharing website, a cloud storage server or a social networking account. If you die or lose mental capacity and no one can control or access these treasured memories, the emotional impact on family and friends can be significant.

Privacy & Confidentiality; private information that other people should be restricted or prevented from seeing. For example, email or Facebook accounts may reveal the existence of relationships or interests that are not widely or otherwise known.

Identity Theft; recent statistics estimate that more than 20 people have their identity stolen through online hacking every minute of every day. When you die or lose your mental capacity, you are no longer monitoring the use of your digital assets, and so the risk of identity theft is greatly increased.

Background

Computer technology and the Internet are recent innovations compared to the ancient laws relating to Wills and powers of attorney. In the 20 or so years since personal computers have been mainstream, they have caused a fundamental shift in society and the way that information is stored and accessed. That information represents many different types of assets.

For many people, their digital presence has become inextricably intertwined with the rest of their life – and while this especially applies to younger people, all of us are affected by these new technologies and the associated convenience.

Most Australians (and even most lawyers) have not yet considered the monetary or sentimental value attached to digital assets. Overlooking digital assets during the estate planning process increases the likelihood that an estate’s administration will be complicated and subject to litigation due to the inaccessibility of digital assets or disputes regarding how they ought to be administered.

Digital assets pose a unique set of challenges within the context of estate planning.

The people in our lives may not always be aware of the extent of our online presences, and surviving friends and family members may overlook digital assets that have financial or sentimental value unless details are shared within a digital estate plan.

Failing to address the issue of digital assets within an estate plan can leave your executor with the daunting task of attempting to piece them together. It may also result in complete inaccessibility of some or all digital assets or lead to significant expense in attempting to regain access.

Some overseas jurisdictions have now begun to introduce legislation to address the legal issues arising as a result of the prevalence of digital assets and the inadequacy of the typical estate plan in addressing them. Australia has not yet enacted legislation to provide guidance on how to administer or distribute digital assets. Without any default rules relating to the treatment of digital assets on death, proper estate planning is crucial in avoiding any delay, expense or conflict relating to these assets.

What should be done?

Contact a lawyer who specialises in estate planning and who has knowledge of digital assets, who will help you:

  • Make an inventory list of your digital assets, to provide your representative (agent, executor, personal representative, guardian, attorney, etc) with details of these assets and where to find them.
  • Appoint a representative – someone you can trust if you are mentally disabled or die – and tell them what you want to do and achieve.
  • Make sure your representative knows how to access your accounts and passwords in a secure and appropriate manner.
  • Make sure the appointment is effective – different providers and terms of service agreements have different requirements.

Rod Genders is a world authority, international author and lecturer on Digital Assets.   In 2013 he founded and continues to chair the London-based international Society of Trust & Estate Practitioners’ Digital Assets Working Group. He has given papers and presentations to senior lawyers, accountants and financial planners in Miami Florida in August 2014, and Hong Kong in November 2016, in addition to numerous presentations in his home state of South Australia.

At Genders & Partners, we make it a priority to stay current with the ever-changing laws on Digital Assets. Your Wills and estate planning lawyer in Adelaide will handle your estate planning process with the utmost professionalism and compassion to ensure that your assets and your family are protected.

To claim Your FREE 15 minute Telephone Consultation call us on (08) 8212 7233 today and learn how we can help you and yours.

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Retirement age raised to 70 https://www.genders.com.au/retirement-age-raised-to-70/ https://www.genders.com.au/retirement-age-raised-to-70/#respond Tue, 27 Dec 2016 02:36:55 +0000 http://genders.com.au/dev/?p=11085 https://www.genders.com.au/retirement-age-raised-to-70/

For a long time the official retirement age in Australia was 65 for men and 60 for women.

This was gradually changed to be 65 for everyone. Then the Labor Government increased it to 67 and in April 2014 the Federal Liberal Treasurer Joe Hockey announced the Government’s intention to increase the age of eligibility for the aged pension to 70.

The rationale behind this is that we are living longer on average, and the social security system cannot sustain the current level of payments for a longer period, especially with relatively fewer Australians remaining in the workforce.

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retirement-age-raised-to-70
For a long time the official retirement age in Australia was 65 for men and 60 for women.

This was gradually changed to be 65 for everyone. Then the Labor Government increased it to 67 and in April 2014 the Federal Liberal Treasurer Joe Hockey announced the Government’s intention to increase the age of eligibility for the aged pension to 70.

The rationale behind this is that we are living longer on average, and the social security system cannot sustain the current level of payments for a longer period, especially with relatively fewer Australians remaining in the workforce.

I predict that the Australian Government will restrict the age pension to people aged 70 and older.

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