Protecting your inheritance

Protecting your Inheritance

We understand that if you are named as a Beneficiary in a Will and someone challenges the Will so that your inheritance will be reduced, possibly to nothing, it is incredibly upsetting and frustrating.

Whilst there may not always be something that you can do to stop the challenge being made, there is always something that you can do to limit or even prevent the challenge from being successful. We have developed a number of frequently asked questions which may help you.

Q. The Will was made the way it is for a reason. Why can it be challenged?

A. The Administration and Probate Act gives certain people a right to bring a claim for further provision to be made from an Estate. It is extremely common for people already named in the Will to be outraged that someone would try to challenge the wishes of the Deceased, especially when it means it will take their inheritance away from them.

Q If the Will can be challenged is there any point making one?

A Yes because the Will is the starting point in any claim. The starting point is never an equal split between children for example. The Courts take into account the terms of the Will and the reasons why the Willmaker made the Will the way he or she did. The Courts are well aware that people have the right to leave their assets as they choose by their Will and so the exercise of the Court’s power to interfere with a Will is only done very carefully.

Q. Who pays my legal fees to defend my inheritance?

A. If you are the Executor of the Will, you are required by law to uphold the terms of the Will and so you are entitled to pay your legal fees from the Estate. If you are not the Executor, it will depend on the circumstances of your case as to who pays for your legal fees.

Q I am not the Executor. Should I see my own Lawyer?

A. Yes. Whether the Executor is the Public Trustee or anybody else for that matter, they have a general duty to uphold the terms of the Will but they will not protect your specific interests as a beneficiary. Usually their defence to the challenge to the Will is not as vigorous as the defence you would mount if you were to engage your own Lawyer to protect your own interests.

Q I don’t agree with the way the Executor is acting. What do I do?

A. As an interested beneficiary, you have the right to be independently represented during any litigation at any time so you can have someone who is acting to further your interests only. If you are not happy with the Executor then by all means instruct lawyers to act just for you.

What is an Executor ?

The executor of a Will is responsible for carrying out the wishes of a person after they die. The role of the executor is to manage the estate within the terms of the Will and protect the assets of the estate. The executor of an estate must comply with various laws and rules that govern the administration of deceased estates.

Normally a spouse or next of kin is nominated executor in a Will but sometimes the job may require someone with more business or legal expertise, depending on what might be required of them.Many people when nominated as an executor are unsure of what is expected of them. The duties of an executor can be complex and demanding and require an understanding of the law, tax and accounting requirements.

There are many steps involved in being an executor. The duties of an executor may include:

• Attending to funeral arrangements
• Locating the Will
• Applying to the Supreme Court for a grant of Probate of the last Will (Probate is a formal document that confirms the executor and gives them permission to administer the estate)
• Determining the beneficiaries
• Collecting assets
• Making sure all claims and debts are received, assessed and paid if substantiated
• Distributing assets according to the terms of the Will, including managing longer term trusts
• Preparation and management of accounts
• Preparing and lodging taxation returns
• Defending litigation

Contested Wills and Caveats-Beware

A caveat is in the nature of an injunction.  It is usually lodged on a certificate of title to prevent certain dealings in the land or notify people of the caveator's interest that affects the land.   
It is not the caveat itself that creates the interest in the land. A Caveat should only be lodged where the caveator already has an underlying interest that supports the lodgement of a caveat.
There are three types of caveats that can be used, either:

1. absolutely (absolute caveat)
2. until after notice is given to the caveator (notice caveat)
3. unless the instrument registered is expressed to be subject to the claim of the caveator (subject to claim caveat).

Lodgement of a caveat is a relatively cheap and simple process.  However, in  Victoria, a person who lodges a caveat without reasonable cause is liable to pay compensation to any person who suffers loss as a consequence.
It is therefore important to first determine whether the interest claimed is adequate to justify the caveat.  If it is, the correct type of caveat must be used.  For example, a tenant would normally only lodge a 'subject to claim' caveat, to protect their leasehold interest.  Lodgement of an absolute caveat by a tenant could result in an action for compensation.
Careful consideration should always be given to ensure that any caveat lodged matches the legitimate claim of the caveator.
Disgruntled claimants under Part IV of the Administration and Probate Act are all too often lodging caveats over real estate comprised in the estate when, usually, they actually have no valid caveatable interest. This can create serious ethical problems for a solicitor who is asked to lodge such a caveat and can also have a deleterious effect upon the actual claim itself  because the behaviour of the Claimant is one of the criteria which must be considered by the Court when considering any such claim. Usually the caveat will be a complete overkill anyway, as an Executor would be personally liable for dealing with real estate property whilst any such claim was extant.

New legislation - Children excluded if no will- Beware

Proposed changes to the Succession Act in NSW will mean that natural Children of a deceased person will no longer be entitled to part of his or her estate. NSW legislation was always similar to that in Victoria until now. It will be interesting to see if Victoria follows suit in the near future. At the moment the natural children will receive a share of the estate of someone who dies without a will and leaves a Spouse or Partner, provided the estate is big enough. Under the proposed changes, the Spouse or Partner will get the lot. Sometimes this result will be the same as the will would have been,  and sometimes it won't. A will really does look like a cheap investment in your succession plan either way.

Superannuation Trustees overriding your will. Superannuation Complaints tribunal

Did you know that your superannuation might go to whoever your funds Trustee says it should go to when you die ? Superannuation Trustees are playing God with your money and making decisions which are simply outrageous and often bear no resemblance to what your wishes might be, whether you have a will or not.  Not only that, but Australian Superannuation funds seem to be deliberately misleading people into believing that they have made valid and binding nominations as to who should get their superannuation on their death only to ignore any such nomination when one of their members dies. Many millions of  dollars are being given away each year by fund Trustees to people who claim to be entitled to the money.
Claims for superannuation proceeds now come from all quarters, including De Facto's, girl/boy friends,  past spouses, step children, parents and siblings. The stupid and illogical decisions being perpetrated on  deceased members on almost a daily basis by Superannuation fund Trustees is resulting in an ever increasing number of appeals to the Superannuation Complaints Tribunal by shocked and aggrieved family members. Unfortunately the Tribunals own largess with your money seems of late to be as ill founded as that of some of the Trustees.
Recently the Tribunal upheld the decision of  Trustees who happily handed over almost $300,000.00 to the flat mate of a gay member who had died without a will. Never mind that the father of the deceased had never even met the guy or that the member had been dead for three days before his flat mate even realised he was dead . With the member dead and no one available to contradict his story, the flat mate claimed to be the "De Facto" partner of the deceased and to be in a committed long term relationship with him. Bingo, the Trustees hand over $300,000.00. Not to forget of course that now we have a "Relationships Act" which ensures that the rest of the estate now goes to the short term De Facto partner as well.
Binding nominations CANNOT be effected online despite the fact that many super funds encourage you to believe that they can.  Additionally, there seems to be a direct correlation between the validity of the claim and the speed with which the claim for the superannuation funds is lodged after death. i.e the weaker the claim, the sooner after death it is lodged (and paid), leaving much stronger claims unmet.
If you think you have provided effective instructions as to the disposition of your superannuation, think again and check with your solicitor, you may be surprised.