FAQ's
Why MAKE A Will?
So you don’t have a Will? Read on.....you may be surprised.
Most people believe that if they die without a Will their estate automatically passes to their spouse.
Think again…….
In Victoria , if a spouse with children dies without a Will, their partner receives the first $100,000 and only a third of the balance of the estate. The rest will be shared between the deceased’s children, regardless of their age.
Let’s look at an example – a wife’s estate comprises a half share of the family home worth $500K, an investment property worth $400K and $100K of shares. Her estate is worth $1m.
What would happen if she died without a Will?
Her husband would only receive the first $100K and 1/3 of the balance ie total $400K. Her 2 children would receive $300K each.
Now at some point those children may decide they want their share, forcing Dad to borrow or sell the family home. Unlikely? What if they were adult children and going through a divorce? They may have no choice.
Have you separated but not divorced? Your estate assets could be at risk…….
If you don’t have a Will in place, and are not yet divorced, your husband or wife could end up with a significant part of your assets. If you have recently separated you should consider who you would want to receive your assets and have a Will prepared accordingly.
What if the person who died without a will was in a de-facto relationship but hadn’t yet divorced their previous partner? Similar to the above, a formula is applied.
If, for example, the deceased had lived in a de-facto relationship for between two and four years their de facto would receive a third of the partner’s share described above. The spouse would receive 2/3 with the children’s share remaining unchanged. There is a sliding scale so that after 6 years together the de-facto receives 100% of the share and the spouse nil.
So, if you don’t want your assets split according to a government prescribed formula – have your Will prepared sooner rather than later.
Not all Wills are the same……
Of course, having a Will in place is critical but it’s also important to ensure you have the right one to suit your particular needs.
There are Standard Wills for example that may be suitable if you have assets worth less then $300,000. However, if your assets are worth more, and particularly if you have a partner and/or children, you should consider the option of a Comprehensive Will. These allow you to take advantage of tax savings, asset protection benefits and the option of control by blood relatives within your Will. Similarly if you have children with special needs or from a prior relationship, you may want to carefully consider how they are best looked after.
So please - avoid the trauma.
Just as a financial plan requires careful consideration of your needs and wants, so too does an estate plan to ensure the end result is the best possible outcome for your loved ones.
We strongly recommend you seek legal advice regarding the preparation of your Will and we would be happy to recommend you to someone.
Footnote:
This information has been prepared by irongroup solicitors and is of a general nature only. We recommend you receive comprehensive advice to suit your particular circumstances.
Powers of Attorney
Introduction
A Power of Attorney is a legal document that allows you (the Donor) to give someone else (the Attorney) the authority to make decisions such as financial, lifestyle, health or medical, on your behalf. There are three main Powers of Attorney recognised in most states in Australia .
1. Enduring Financial Power of Attorney
This is the most important and useful Power of Attorney as it empowers another person (your Attorney) to sign financial & legal documents on your behalf.
This Power of Attorney continues even if the Donor becomes mentally incapacitated. So for example, a family member could use it to look after your finances if you have a stroke or get Alzheimer’s.
Amongst other things it covers:
- Banking (eg withdrawing or depositing money)
- Real Estate transactions (eg signing documents necessary to buy or sell a house)
- Stock market transactions
There are some limitations on the use of a Power of Attorney. For example, it does not enable the Attorney to draw up or modify a Will on your behalf. Nor does it authorise your Attorney to make decisions about medical treatment. Everyone should have an Enduring Financial Power of Attorney in case they become incapacitated, even if for a short time.
2. Enduring Lifestyle (Guardianship) Power of Attorney
This enables someone to make health care and lifestyle decisions for you in the event you suffer a disability eg an intellectual impairment or physical disability, and are unable to make reasonable judgments.
These decisions include:
- Where you live, including consent to enter a nursing home or hostel
- The health care you receive including type of treatment, surgery or medication
- The people who can associate with you, including visitors.
You can specify the powers you give your guardian and place conditions on the decisions they can make.
3. Medical Power of Attorney
This enables someone to make medical treatment decisions when the Donor becomes incompetent eg if he or she is unconscious or in a state of shock. A Medical Power of Attorney covers a narrower range of powers than an Enduring Lifestyle Guardianship in that it does not cover lifestyle decisions. However if you appoint both, the Medical Power of Attorney will take precedence over the Enduring Lifestyle Guardian
when it comes to medical treatment decisions. We would be happy to help you decide the most appropriate Powers of Attorney for your circumstances.
Procedural Requirements
The first step is to nominate and obtain agreement from one or more people (usually no more than 2) to act as your attorney should the need arise. Given the significance of the position of attorney, it is important to nominate not only someone you trust eg your spouse, family member or close friend, but someone who is willing to do it.
When to put them in place
Before you need them! In order for the documents to be valid, you need to have legal capacity at the time of appointment which means you need to understand the implications and consequences of what you are signing. This provides a time imperative to have Powers of Attorney in place before they are needed. All Powers of Attorney become invalid upon death. The Will then takes over, providing the power to the executor to take care of the deceased estate.
Footnote:
This information has been prepared by irongroup solicitors and is of a general nature only. We recommend you receive comprehensive advice to suit your particular circumstances
Discretionary Trusts – Specified Beneficiary
What is a Specified Beneficiary and why do we have to include one on a discretionary trust order form?
A Specified Beneficiary the party referred to in the Schedule on the trust under the heading “Specified Beneficiary.”
A party/parties is nominated at the time of set up of a trust to determine whom any income can be distributed to from the trust.
The Specified Beneficiary includes, spouse, parents, children, entities, etc. related to the Specified Beneficiaries nominated. Including any companies related to the “Specified Beneficiaries” i.e. companies where the “Specified Beneficiaries” are directors or shareholders.
Can A Company be Re-Instated after being deregistered?
Yes. A company maybe re-instated if ASIC is satisfied that the company should not have been deregistered. For example:
- there was a procedural defect or oversight in the deregistration
- the company was carrying on business or was in operation at the time it was struck off
In order to satisfy ASIC that the company should not have been deregistered, a statutory declaration must be lodged with ASIC. The Stat Dec must be made by a person who, if the company is reinstated, will hold the office of a director of the company. The Stat Dec must be lodged with ASIC with a $65 Application Fee and any outstanding Annual Returns/Reviews lodged including payment by Bank Cheque or Money Order of all Lodgement Fees, Late Fees and Penalty Fees.
Can the “The Settlor” in a Family Trust also be “Appointor” and/or a “Beneficiary”?
NO, “The Settlor” must be unrelated to the “Appointor” and CANNOT be a “Beneficiary” of the Trust.
3. Can I change the name of a BUSINESS NAME?
NO, a Business Name CANNOT be changed?
A Business Name can be CEASED if no longer trading.
The OWNERSHIP of an existing Business Name can be changed.
Why do I need to adopt a new constitution?
All companies registered prior to 9th December 1995 should adopt a new constitution to take full advantage of all the changes in the Corporations Law and also to protect Directors from acting in breach of the company’s Articles.
All companies registered prior to 30 th June 1998 that have not amended their Articles of Association (now known as “Constitution”) or adopted a new constitution are still ruled by old outdated regulations. There is no provision for circulating resolutions or holding meetings taking advantage of new technologies.
All old Articles limit the company to “Authorised Capital.”
The concept of “Par Value” for shares has been abolished.
Private and Proprietary companies are no longer required to have a Registered Office open to the Public.
Capital Reductions no longer require Court Approval.
Share Buy-Back rules have been amended.
Include compulsory use of a company seal.
NCS can prepare Adoptions of new updated Constitutions together with any ASIC changes required. We can also audit your company binders on request.
If you would like NCS to prepare an Adoption of Constitution, we will require the following information:
- Current Company Report or Latest Annual Review Statement reflecting up to date company information.
- Copy of current certificate of registration or a company name change
- Details of any subsequent changes for directors or shareholders if required
Please contact our office for a free quote on Adopting a Constitution or Audit of your current registers.
Why have we be fined $570 by ASIC for not notifying shareholders of the company?
A major change to the Corporations Act 2001 (‘the ACT”) was implemented 1 July 2003. (CLERP 7 – Corporations Law reform Bill 7)
From 1 July 2003, Annual Returns for all Australian companies were abolished and a system of “Annual Review” for each company became law.
Every Australian company now has its “Annual Review” on the anniversary date of its registration unless an application is made to ASIC to change this date.
At this time, the officers of the company must review all the company details on the Company Statement sent by ASIC to EITHER the Registered Office address or the Registered Agent for that company (Accounting Firm).
Prior to 1 July 2003, Share Transfers did not have to be lodged with ASIC only Share Allotments. Hence ASIC would only update the shareholding for the company when the Annual Return was lodged each year. Hence when CLERP 7 was introduced, the shareholders of many companies had to be updated at the first “Annual Review” in 2004. If any company details needed to be updated, the Law requires these changes to be notified to ASIC within 28 days of the company’s “Annual Review Date”. Hence the company has 28 days to notify ASIC of current shareholdings and 2 months from the company’s “Annual Review Date” to pay the “Annual Review Fee” before late fees/penalties are incurred.
Many companies neglected to advise ASIC of the current shareholder details at the 2004 Annual Review and if advising these changes now, ASIC are charging $270 for late notification of shareholder details and a further $270 for late or incorrect 2004 Annual Review = $570 in total!
It is very important to keep up to date with ASIC compliance and Corporations Law Reform and your responsibility as a Director or Shareholder of a company or looking after these responsibilities on behalf of your clients.
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