Monthly Archives: September 2020

testamentary capacity; Victoria; testator; assets; estate

On the importance of Wills

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On the importance of Wills…

Everyone knows that having a properly drafted and legally valid Will is a necessary evil like private insurance or fat pants. You’d rather not think about the day that you need it, but when that day comes, you (or those closest to you) are glad you do. However, many of us find excuses to put off making a Will for another day; or worse decide that a DIY Will Kit is sufficient to properly safeguard your estate and wishes. They are not.

In Victoria, in the event that you pass away without having made a proper Will, you pass away being ‘intestate’. In this case, it is very difficult to deal with the assets of a deceased that are solely in their name. Certain items such as joint bank accounts can still be accessed, however the majority of assets can only be dealt with after someone makes an application to the Supreme Court to be granted a document called ‘Letters of Administration’. This allows them to act on behalf of the deceased similar to if they had proved the deceased’s Will, however there are limitations on what they can and cannot do and it can be a drawn-out and expensive process to obtain the Letters of Administration. Particularly if there is any dispute between family and friends as to who is best to represent you and your beneficiaries. If multiple applications are made i.e. former partners, children or other interested parties, it can result in litigation so that the Court can decide who to appoint, again causing delay and costing money that may be needed after you pass.

In order to prevent becoming ‘intestate’ and to prevent other common Estate matter issues, we recommend that you make or update your Will if:

  • You do not already have a properly drafted Will in place;
  • You have recently purchased or sold real estate or high value assets;
  • You have recently married or divorced (marriage cancels any Will made before it takes place);
  • You have had children and wish for them to be properly provided for;
  • You have had any other major change in circumstances that affects the value of your assets or how you would like them dealt with after you pass away.

In the event that you already have a Will, it is not as difficult as it would seem to update it. Rather than requiring a completely new Will to be drawn up, you can make a ‘Codicil’ which is usually a short one page document that changes or replaces the contents of your Will or adds new items to it.

Having a Will properly prepared by a lawyer is also vital to preventing disputes and disagreements and potentially costly litigation after you pass away.

If you or someone you know needs to have a Will or Codicil prepared, or if you would like further information, please contact our office for a free no obligation discussion about how we can best help you.

Keeping It In The Family: Why You Should Always Document A Loan

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Keeping It In The Family: Why You Should Always Document A Loan

Often times we are approached by parents or other family members who are in one of two situations relating to family loans.

In the first situation, they want to give a helping hand to a family member such as their children to give them a helping hand or to get into the property market (but they don’t want the stress or hassle of being a guarantor). The clients just want something simple and straight forward to document that it is a loan, not a gift, and usually want it done as quickly as possible as it may have been only thought of at the last minute. This is straight forward and something that can be sorted out quickly and be customised to a clients individual needs by our team.

In the second situation, clients come to us because ‘it’s already hit the fan’. They have lent money to a family member or friend on a verbal agreement, or worse still without setting out any terms from the outset. Then suddenly after a disagreement or argument, the borrower refuses to repay the amount claiming it was a ‘gift’, that there was no agreement for repayment or flat out denying that the loan existed in the first place. The client is therefore distressed, feels betrayed and is out of pocket potentially hundreds of thousands of dollars.

In this case, it is a matter of establishing that an oral agreement exists. An oral agreement is a binding contract, but unless there are third party witnesses to the agreement being made, it can come down to your word against theirs. Evidence that money passed from your bank account to theirs is not sufficient as it does not prove the intention. Was it a loan, or was it a gift?

An undocumented loan can also impact on a number of other areas of law such as:

  • property matters where it was intended that the loan be repaid on sale of a property;
  • family law proceedings where it may need to be determined whether or not the loan is to be taken into account as a liability during a breakup; or
  • an Estate where Executors may not have been told by the Deceased of the existence of the loan and therefore beneficiaries may also lose out. Or alternatively if a loan was intended to be waived on the passing of the lender but this is not recorded, the Executors may be legally forced to call up the loan to the detriment of the Borrower.

It is always important to treat any loan as an ‘at arms length transaction’ and have it properly recorded. This protects you and the borrower.

If you are considering making a loan to a family member or friend, please do not hesitate to contact our office to discuss how best to move forward.

Powers of Attorney: Who Decides When You Can’t

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Powers of Attorney: Who Decides When You Can’t

Powers of Attorney can mean many things to different people. At its most basic, a Power of Attorney allows someone to make decisions, sign documents or entering into agreements on behalf of another.

In Victoria, the main types of Powers of Attorney that one may need or otherwise come across are:

  • General Power of Attorney;
  • Enduring Power of Attorney (Financial and/or Personal Matters) ;
  • Appointment of Medical Decision Maker (formerly Power of Attorney (Medical Treatment);
  • Company Power of Attorney (which we will cover in depth at a later date).

General and Personal Matters:
General and Enduring Powers of Attorney are very similar in nature. Individuals can appoint another to make decisions, enter agreements such as Contracts of Sale, Mortgages and other legally binding documents or generally act as a representative of the individual.

The key difference between General and Enduring Powers of Attorney is that a general Power of Attorney will cease to be legally effective in the event that the person making the Power becomes ‘legally incapable’ to make decisions for themselves. Conversely, an Enduring Power of Attorney will continue to operate even if you lose mental capacity.

Appointment of Medical Decision Maker:
With the introduction of the Medical Treatment Planning and Decisions Act 2016, Medical Treatment Powers of Attorney have been replaced with an Appointment of Medical Decision Maker. This is largely the same as the former Power of Attorney (medical treatment), however there are a number of differences. Whereas it used to be possible for a number of medical power of attorney is to be appointed, the appointment of medical decision maker now requires that only a single primary decision-maker be appointed with a secondary decision-maker appointed in the event that the primary is unable to act or cannot be contacted.

Generally, we also recommend that anyone making an appointment of medical decision maker also complete an advanced care directive with their doctor. This will provide the decision-maker with some guidance on what may otherwise be traumatic circumstances.

We recommend that both an enduring power of attorney and an appointment of medical decision-maker be completed by clients over the age of 55, those who may be going into hospital or otherwise incapacitated. This provides a safety net to ensure that individuals affairs can be appropriately managed.

Please visit our Contact Us page or call our office on 03 9052 5101 to discuss the appropriate documents for you.