Elevate Family Law

Wills and Estates – Commonly Asked Questions

Wills Lawyer Brisbane

Table of Contents

What is Probate?

Probate is the authority of the Supreme Court to the executor named in the will to administer the deceased’s estate and distribute their assets. It is the official recognition by the court that the executors have the right to administer the will of the deceased. It passes the title of the assets to the executors for the sole purpose of distribution to the beneficiaries.

What is considered as Gifts under a will?

There are two types of gifts under a will, a ‘specific gift’ and the ‘residuary’ gifts.

Specific gifts are specified chattels, properties or values of money made out to a specific beneficiary. They are made out in specific terms under the will as to the gift itself and who is to receive the gift.

Residual gifts are the remainder of the estate and is made up of anything left over that has not been specifically identified as a gift to an individual beneficiary and has not been paid out as a liability. Beneficiaries can be named in the will to take benefit in the residuary of the estate as their gift, meaning that their gift is anything left over after all the other gifts have been distributed.

Conditional gifts:

There is the option to place conditions upon gifts under the will. The most common condition is that individuals are to reach a certain age before receiving their gifts under a will. This normally occurs when parents or grandparents update their will upon the birth of a child.

There are certain circumstances where conditions are placed in the will are invalid as they are impossible to fulfil, violate a rule of law, are uncertain or are contrary to public policy.

It is important to get specific legal advice when drafting these specific terms to ensure they are unambiguous and valid.

Wills & Estates Lawyer

When do I need to update my will?

  • Marriage- as soon as you get married your current will is invalid (s 14 Succession Act);
  • Divorce (s 15 Succession Act);
  • The birth of child/ren or grandchild/ren;
  • The death of an executor or beneficiary;
  • The purchase or sale of a property; or
  • A significant change in financial circumstances.

What do I need to consider when choosing an executor?

  • Fitness for the position– there is a lot of administrative duties associated with the role of an executor. The individual needs to be able to be organised or arrange for a solicitor to execute the will;
  • Conflicts of interest or disputes with beneficiaries– does the chosen individual have a good relationship with the beneficiaries of the will? Choosing an executor with a good relationship with the beneficiaries can make the carrying out of your wishes easier on your loved ones (Re McLennan [2018] QSC 124);
  • The fiduciary duty owed to beneficiaries– the executor has a duty to act in the best interests of the beneficiaries whilst carrying out the terms of the will;
  • Ability to collect assets to distribute– the executor needs to have the ability to collect the assets, are there any factors that would preclude this individual from doing so?;
  • Possibility of litigation (family provision claims, disputes with beneficiaries)- would this individual be able to handle litigation with respect to your will? Would they act in the best interests of the beneficiaries and with your wishes in mind in those situations?;
  • Taxation responsibilities (CGT, income tax, etc.)– is this individual responsible enough to fulfil the tax obligations of the execution of your will before distributing the will? The executor is required to file tax returns up to the date of death and for the estate from the date of death. Advice from an accountant is required for this;
  • The liabilities and debts associated with the estate– will this person be able to properly ascertain these and then allocate accordingly?;
  • Time limits– is this individual responsible and organised enough to conform to time limits?;
  • The ability for the executor to ensure that the overriding consideration, being the administration of the estate is the primary concern– does this individual have your best interests and wishes at heart?
  • Cost orders– the individual is to act in the interests of the estate, or they can have costs orders made against them as a penalty. 

What is a mutual will agreement?

Two parties normally married, or de facto couples will execute wills with the same words/ effect to provide the same terms to each other for when one passes. This can include terms that provide benefits to the children of the other, etc.

A separate contract stating that they will not change their will following the death of that partner is also required at the time of the execution of the mutual wills

Specific legal advice is required for these to be executed. A ‘do it yourself’ will kit from the post office is not sufficient in these circumstances and does not protect either party.

Discretionary Trust

What is a Discretionary Trust?

A discretionary trust is a trust where the trustee holds property for the benefit of the beneficiaries, but there is no set or fixed entitlement or interest in the funds or property.

The trustee has discretion to determine which beneficiaries are to receive the benefit of the trust and how much they are to receive; however, this is not a complete discretion.

There are nominated ‘classes’ of beneficiaries set out within the terms of the trust that must be followed by the trustee.

There are four parts to a discretionary trust that are to be fulfilled.

  • Settlor:
    The settlor is the individual who creates the trust by “settling” the money in the fund for the benefit of the beneficiaries. In the case of a will, it is the testator through the drafting of the will in the terms of the will.

 

  • Beneficiaries:
    The beneficiaries are the individuals that take benefit from the trust. There are two types of beneficiaries in a discretionary trust:
    General beneficiaries- who are named within the trust deed and are eligible to receive a distribution of the trust; and
    Remainder or residual beneficiaries- who are named as part of the residuary and are to receive the proportion not otherwise distributed in the deed.

 

  • The Trustee:
    The trustee is the individual in charge of the trust property and is the legal owner but does not take benefit from ownership of the property. The legal ownership serves the purpose of allowing the individual to distribute the property in accordance with the terms of the trust deed by giving the individual the legal right to sign away the property.

 

  • The Appointor:
    The appointor is the individual assigned to oversee trustees to ensure the terms of the trust deed are being fulfilled. The appointor has the power to appoint and remove trustees. This generally occurs in situations where the trustee dies, becomes incapacitated or, bankrupt.

Getting Assistance

If you need any legal advice around parenting, child custody and mothers’ / fathers’ rights in Australia, get in touch with our friendly team today!