WHAT IS A PROBATE REQUISITION?

When someone lodges a probate application with the Supreme Court of NSW, there are exacting requirements for it to be complete and accurate. If the application is incomplete or inaccurate, the court will issue a probate requisition seeking additional information, documentation, or that the application be corrected. The process of obtaining probate of a will is delayed until the requisition is satisfied, and may increase the fees payable to the Court to obtain probate. This article explains the purpose of a probate requisition and highlights some common mistakes made in probate applications that lead to requisitions.

What is probate?

An executor appointed by a will or administrator of a will applies to the probate registry of the Supreme Court for a grant of probate to administer a deceased estate. A grant of probate verifies that the will is the most recent, valid testamentary instructions of the deceased. The process of applying for a grant can be complicated and a necessary requirement can be easily overlooked or a small mistake made. Even solicitors occasionally receive a requisition when seeking a grant of probate.

What is a probate requisition?

If a probate application is inaccurate, there can be considerable delays. Sometimes the Supreme Court issues a requisition which notifies the applicant that they have not fulfilled at least one of the requirements of the application. A requisition forces the executor to file further documents with the court or amend existing documentation. Even if the forms are perfectly filled out, a requisition may still be issued if the Court needs further information to clarify some aspect of the application. For example, a requisition may be issued simply because a will has an unexplained mark. Even a staple mark in the corner of a will may prompt a requisition because the court is concerned that there are pages missing.

A typical requisition is a one-page notice, which notes the case number and title of the application, and asks the recipient to answer specific requisition/s. A copy of the requisition is filed with answers to the requisition/s. Fees may be payable when lodging additional documentation.

You cannot ask the Court to further explain a requisition. In the 2001 case of Re Estate of Max Frederick Dippert, the Court reprimanded the solicitors for answering a requisition from the Registrar with a four-page request for further and better particulars on the requisition. The Court made it clear that this was not the appropriate way to respond to a requisition. The Court emphasised that if an applicant or solicitor is unsure of how to respond to a requisition, they need to consult counsel, not “interrogate” the Court.

How to avoid a probate requisition

If you are unfamiliar with the process of obtaining a grant of probate, it can be difficult to correctly complete the documentation.  We highly recommend that you consult an experienced solicitor to avoid mistakes. However, if you wish to apply without obtaining legal assistance, adherence to the following steps will limit the probability of requisitions:

  1. Locate the original will and death certificate and check them for any issues which could delay probate. Originals (not copies) must be submitted for probate. If there are any issues with the original will, such as damage, provide a sworn affidavit with a detailed, formal explanation of how the damage occurred.
  2. Exactly follow the required wording of the application to avoid miscommunication.
  3. Check that the names (and aliases) and contact details of the deceased, beneficiaries and executors are correct and complete. A testator may use an anglicised version of their name on some documents and their full legal name on land titles and death certificates.
  4. Check that the dates on the application match the date of the will and of the death certificate.
  5. Consider whether there are any unusual circumstances involved in the death of the testator. For instance, if the deceased died overseas, the affidavit should detail how the body was identified, etc.

Applying for a grant of probate can be intimidating, and small mistakes and omissions can be costly and time-consuming. We can help you make a probate application so that the process is as smooth as possible. We can also help if you receive a probate requisition. If you have been appointed as an executor of a will, contact us for advice and support.

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Family Law and Bankruptcy

What if my former spouse is declared bankrupt?

Bankruptcy and family law can collide when spouses separate, often as a reason for the separation or as an outcome of the separation. Families are experiencing higher levels of financial stress with inflation, rising property prices, increasing interest rates and stagnant incomes. With increasing economic uncertainty, bankruptcies are likely to increase in number and frequency.

In family law property settlements, a common issue when one party becomes bankrupt is how the non-bankrupt spouse’s entitlements are considered against those of the Trustee in Bankruptcy or creditor(s) and who has priority over certain property.

What is bankruptcy?

Bankruptcy occurs when someone a person is unable to pay their debts as and when they fall due. Under the Bankruptcy Act 1966 (Cth) a person can be declared bankrupt if:

  1. Someone to whom a person owes money (a creditor), makes an application to the Court; or
  2. A person owing money files a debtor’s petition (voluntary bankruptcy).

What is the effect of bankruptcy?

When someone is declared bankrupt, their assets go into the control of (or “vest with”) the Trustee in Bankruptcy. The bankrupt person loses control and possession of the assets. Some asset types are excluded, including most household goods, some tools of trade, superannuation, and a car or motorbike up to a certain value.

What if my former spouse becomes bankrupt?

Bankruptcy does not prevent a non-bankrupt spouse from pursuing a property settlement under the Family Law Act (“the Act”). The Act protects the non-bankrupt spouse’s interests in matrimonial or jointly owned property. A non-bankrupt spouse can also share in the bankrupt spouse’s vested assets for the benefit of the non-bankrupt spouse and their dependents.

The Federal Circuit and Family Court of Australia (“the Court) has the power to adjust property interests between spouses, regardless of whether an asset or liability is held jointly or in the name of one spouse only. An example is the way in which the Court deals with the former matrimonial home. If the property is in the bankrupt spouse’s sole name, the Court may treat it as joint matrimonial property, and make orders to protect the non-bankrupt’s interest in the property from the effects of the bankruptcy. The Court may, for example, order that the property be sold and the proceeds of sale be distributed to one or the other spouse.

The Court will always apply the following five step process when determining property settlements, regardless of whether a party is bankrupt:

  1. Determine and value the parties’ property;
  2. Determine if it is just and equitable to make an order altering the parties existing interests;
  3. Consider financial and non-financial contributions to property and the welfare of the family;
  4. Consider the specific needs and characteristics of the parties as set out in the Act; and
  5. Make any adjustments required to ensure that the financial settlement is just and equitable.

The Court must balance the benefit of making an order in favour of the non-bankrupt party against the effect of proposed orders on the creditor’s ability to recover debts from the bankrupt spouse.

What are the rights and restrictions of the Bankrupt Party?

The bankrupt party is not permitted to make submissions to the Court in relation to vested property unless the Court provides permission. They can, however, make submissions regarding property owned by the non-bankrupt spouse which has not been vested in the Trustee.

What are clawback powers and how do they impact my Family Law proceedings?

People who believe they are likely to go bankrupt sometimes pre-emptively transfer property that is in their name to their spouse. They do so under the belief it will avoid the Trustee in Bankruptcy having a claim to the property. Unfortunately, any transfer of property made in such circumstances for the period of 6 months prior to bankruptcy can be clawed back by the trustee in bankruptcy. The Bankruptcy Act provides that property clawed back is property of the bankrupt and is part of the bankrupt estate.

What now?

If your former spouse has declared bankruptcy, contact us for advice and assistance

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Splitting SMSFs

Splitting Self Managed Superannuation Funds

Splitting assets held in a self-managed superannuation fund (SMSF) following the breakdown of a marriage or relationship and subsequent split of assets can be complex.

This article briefly summarises some key factors to consider when splitting a SMSF.

What is a Self-Managed Superannuation Fund (SMSF)?

A SMSF is a private superannuation trust fund that you manage and oversee including choosing investments and ensuring that the fund complies with superannuation and tax laws. A SMSF is established under a trust structure and its sole purpose is to provide its members with retirement benefits.

SMSFs commonly have diversified assets classes including shares, investment income, real property, and cash, to avoid the fund being exposed to the vagaries of a single asset class.

Considerations for splitting SMSFs

When considering a SMSF split in a family law separation, essential matters to keep in mind include:

1.       Documents

Copies of the following documents will help you to better understand the SMSF:

  1. the most recent up to date Trust Deed.
    1. A Register of Complying Superannuation Funds (RoCS) Search (via the Australian Tax Office [ATO] website) – to ascertain whether the SMSF is registered as a complying fund.
    1. The three most recent years financial statements, to:
      1. augment your understanding of the nature of the SMSF’s assets and its financial position; and
      1. show whether the SMSG has been audited and any areas of concern as to compliance.
    1. Member Statements.

2.       Valuation

It is vital to determine the value of the superannuation interests. Most SMSFs will have investments such as real property, cash or listed shares which are relatively straightforward to value. However, some SMSFs have assets such as collectables, antiques or units, valuation of which is more difficult.

A SMSF’s financial statements often document the values of its assets. However, the financial accounts are not always up to date, and their values are not always reliable. Reasons for this include:

  1. The financial statements are usually prepared annually, and the values ascribed to the assets as at that date may be out of date;
  2. Interest on dividends could have accumulated and taxation and other expenses could have been incurred since the financial statements were prepared;
  3. The financial accounts may contain reserves, where some of the SMSF’s assets have not yet been allocated to its members;
  4. There may be a dispute about the value of assets. For example, real estate values may not be market values. In that case, an expert valuer should value the real estate.

3.       Tax Implications

There may be tax implications dependent on the nature of the assets to be split.

Non-complying funds potentially have tax liabilities and ATO penalties.

An asset may have latent Capital Gain Tax (CGT). For example, if the SMSF is forced to sell investments (i.e. shares or real property) to implement a cash transfer, then the SMSF will be subjected to CGT on any capital gains made. In certain situations, CGT rollover reliefs provisions may be available to reduce or eliminate CGT where assets are transferred between SMSFs in specie (meaning a transfer of assets in its actual form without selling the underlying asset).

Specialised tax advice will assist you to devise a strategy based on the taxation consequences of rolling out your interest into another SMSF or an industry regulated fund.

4.       Membership and restructure of the SMSF

As a member of an SMSF, you are also a trustee with ongoing responsibilities. You must decide if you wish to remain in the SMSF, commence a new SMSF or open a different type of fund such as an accumulated regulated fund. The decision as to what is appropriate will vary from case to case.

Splitting a SMSF will typically require the fund to be restructured to comply with superannuation regulations and laws. Examples of restructures include:

  1. a person cannot be a single trustee and member, so a corporate trustee may have to be established in place of members being trustees; or
    1. a member spouse may resign as a director of a corporate trustee.

Types of Spitting Orders

A SMSF interest may be split in a financial agreement or by a court order.

There are generally two methods that a SMSF interest can be split – as a specific dollar amount (base amount) or as a percentage of the balance of the superannuation entitlements.  A base amount payment is the most common method used, as it guarantees the amount that a non-member spouse will receive from the split, while a percentage split may be higher or lower than the estimated value of the interest, depending on the interest’s value when the fund’s Trustee gives effect to the Court Order. The circumstances of your matter and the current economic circumstances dictate which type of split is appropriate.

Once the superannuation interest becomes subject to a payment split, the non-member spouse generally has one of the following options in respect of the interest:

  1. create a new interest in the same fund –– this option however may be precluded under the SMSF Trust Deed and is not recommended if the separation is acrimonious;
  2. transfer or rollover the interests into another complying fund (including a new SMSF or an industry regulated superannuation fund). If the non- member spouse does not wish to set up another SMSF and there is insufficient cash to be rolled over into an accumulation fund, SMSF assets may have to be sold; or
  3. if the non-member spouse has met conditions of release under superannuation laws – receive the amount as a lump-sum payment.

Once the non-member spouse has selected how the superannuation interest should be split, the SMSF trustee must generally give effect to that choice.

Superannuation splitting rules are complex, often requiring the advice of accountants, financial advisers and family lawyers working collaboratively to determine an optimal approach towards splitting superannuation.

Contact us today for expert advice on your SMSF and family law property settlement.

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Family Law Super Splitting

What are the superannuation splitting laws?

The superannuation splitting laws allow separating de facto or married couples to value and divide their superannuation after a relationship break down. One partner may split the amount remaining in their superannuation fund and make a payment to the other partner’s superannuation fund.

The Family Law Act treats superannuation as if it were property, although it differs from other types of property as it is held in trust. Splitting superannuation does not convert it into a cash asset: the super funds are still subject to superannuation laws and the usual conditions of release.

Am I entitled to a superannuation split? Do I have to pay super to my ex-partner?

You may be entitled to a superannuation split, or legally obligated to split your superannuation if you were married or in a de facto relationship and have separated. The Family Law Act defines a de facto relationship as two people not married to each other, not related by family, and sharing a relationship as a “couple living together on a genuine domestic basis”. A person seeking superannuation splitting orders must have been in a de facto relationship with the other person for at least 2 years unless:

  • there is at least one child of the relationship; or
  • a party makes a substantial contribution

In that case an application can be made seeking superannuation orders even if the relationship broke down before two years.

How much of my ex-partner’s superannuation am I entitled to/might I have to pay?

In a long relationship, where neither party had substantial superannuation at the beginning of the relationship, a superannuation split will often be calculated which equalises their superannuation interests. The parties add the value of all their superannuation interests, divide the total by two and split one party’s superannuation to the other party’s fund of choice to equalise their superannuation interests.

Alternatively, parties may negotiate a superannuation split tailored to their needs which forms part of an overall package of property settlement. For example, one party may wish to retain a greater share of the cash assets to purchase a property, while the other may be approaching retirement and prefer to retain their super. The party wanting more cash assets may concede their superannuation entitlements to negotiate a greater share of the cash assets.

The Courts have a wide discretion to determine a just and equitable division of the parties’ superannuation interests. If a Court determined the matter, a four-step process would be applied to determine each parties’ entitlement:

  1. the superannuation must be valued; then
  2. each parties’ financial and non-financial contributions to the acquisition, conservation and improvement of the superannuation fund must be assessed; then
  3. the Court will consider factors under s 75(2) or 90SF(3) of the Family Law Act, including:
    1. each party’s age and state of health;
    1. each party’s income earning capacity;
    1. if there are children of the relationship, with whom they live; and
    1. each party’s existing financial commitments and responsibilities.
  4. The Court determines whether in all the circumstances the settlement is just and equitable.

What if we cannot agree about how to divide superannuation?

If you and your ex-partner cannot reach agreement about how to divide your superannuation interests, you can apply to the Court for an order. The Court will apply the four step process to determine a just and equitable division of superannuation.

How long after a separation or divorce can I make a claim for superannuation?

If you were married:

  • If you have separated but not divorced, you can make a claim for superannuation at any time;
  • If you have divorced, you should make a Court application for superannuation orders within 12 months after the divorce.

If you were in a de facto relationship, you should make a Court application for superannuation orders within 2 years after you separated.

The Court may grant leave for a party to a marriage or de facto relationship to apply for a superannuation order after the limitation period if they can establish hardship. However, this can be a very expensive and complicated process, as a special application must be made to the Court seeking leave to proceed out of time and there is no guarantee that leave will be granted.

How can I obtain information about the value of my or my partner’s superannuation fund?

You can apply to the trustee of the superannuation fund for information about a superannuation interest of a member if you:

  • are an ‘eligible person’; and
  • have a genuine reason for needing the information.

An ‘eligible person’ includes:

  • the member;
  • the member’s spouse;
  • if the member or spouse is deceased, their legal representative; or
  • a person intending to enter into a superannuation agreement with the member.

To apply for information about the member’s superannuation interest, the eligible person will have to declare that they require the information in order to either

a) properly negotiate a superannuation agreement, or

b) assist them in connection with family law proceedings relating to the superannuation interest.

The applicant will also have to provide the member’s full name and date of birth.

What if my ex-partner has a defined benefit super fund or a self-managed fund?

Defined benefit funds provide benefits to members in accordance with a formula set out in the fund’s trust deed. The formula accounts for the member’s length of employment and their salary level at retirement. These funds are difficult to precisely value, and a forensic accountant may need to be engaged to value the superannuation interest.

Self-managed super funds are private funds arranged and managed by the parties themselves (often by a lawyer and/or accountant). The parties invest the fund monies by purchasing property, shares, bonds etc. to increase the value of the fund. The value of a self-managed super fund is the total value of the assets held by the fund.

How can my ex-partner and I formalise the agreement we reached to split our superannuation interests?

An agreement regarding the division of their superannuation interests can be formalised by parties entering into a Financial Agreement or applying to the Court for Consent Orders.

Alternatively, you can file an Application for Consent Orders with proposed Consent Orders in the Federal Circuit and Family Court of Australia. Once approved by a Registrar of the Court, the Orders become legally binding and enforceable on both parties and on the superannuation fund trustee.

Alternatively, parties can record their agreement in a Binding Financial Agreement (an Agreement). An Agreement is not filed with the Court. However, each party must be provided with independent legal advice before entering into an Agreement for it to be binding and enforceable. The advice must address the effect of the agreement on the rights of the parties and it’s advantages and disadvantages when the advice was provided.

What is the process for splitting superannuation?

Before finalising an Agreement or filing Consent Orders you must provide the trustee of the superannuation fund with ‘procedural fairness’ by writing to them advising that you are seeking superannuation splitting orders. You should provide the trustee with:

  • the member’s number and date of birth; and
  • the specific orders sought.

The trustee has 28 days to object to the proposed orders by writing back to you or attending the court hearing (if any). The letter from the trustee agreeing to the proposed orders is filed with an application for consent orders.

A party (generally the person who financially benefits from the split) provides the superannuation orders made by the Court to the trustee of the superannuation fund to implement.

What do I do now?

Mid Mountains Legal have extensive experience in a wide range of superannuation matters, including complex matters involving self-managed and defined benefit funds. Ask us for advice about your options and entitlements to empower you to make informed decisions.

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What is a Caveat?

A caveat is a type of statutory injunction preventing the registration of particular dealings with real property (i.e. real estate). It is a formal public notice or warning advising that there is an interest on the property for a particular reason.

The word caveat means ‘beware’ and lodging a caveat warns anyone dealing with the property that someone claims a priority interest in that property. The person lodging a caveat is a caveator.

Reasons for Lodging a Caveat

If you have a genuine interest in land (such as a registered mortgage), you may lodge a caveat to prevent registration of another dealing and protect your legal position. This is known as a caveatable interest.

Caveatable interests include:

  • a registered or equitable mortgage
  • a transfer
  • a purchaser under an agreement for sale
  • a tenant (in certain circumstances);
  • a registered proprietor and
  • contractual rights.

In NSW, the Real Property Act 1900 governs caveats. When a caveat is lodged at NSW Land Registry Services (NSWLRS), it prevents the registration of further dealings on the property’s title until the caveat:

  • is formally withdrawn by the caveator;
  • lapses;
  • is removed by a court order; or
  • the caveator consents to a registration by another party dealing with the property’s title.

Anyone with an interest in land or who wishes to claim an interest may lodge a caveat. A caveat can also be lodged by someone with an Australian court order restraining a registered proprietor from dealing with the property.

In NSW lodgement of caveats is electronic by a subscriber to PEXA (such as a solicitor or a licensed conveyancer).

What Detail Does a Caveat Require?

In NSW, when lodging a caveat, you need to include:

  • the caveator’s name and residential address or registered office, including an address for service of notices;
  • the name and address of the registered proprietor (we suggest that you do a title search to ensure the correctness of the information);
  • reference details for which the caveat relates;
  • particulars of the legal or equitable estate of interest;
  • a verified statutory declaration; and
  • the signature of the caveator, lawyer or another agent of the caveator.

What if I Incorrectly Lodge a Caveat Without a Caveatable Interest?

Only someone with a caveatable interest can lodge a caveat. Lodging a caveat without reasonable cause is a serious matter. A court may order you to compensate anyone who suffers a financial loss as a result of your incorrect caveat.

Challenging or Removing a Caveat

Ways in which a caveat can be challenged or removed include the property owner issuing a lapsing notice and the caveator submitting a withdrawal of caveat form.

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Priority Notices in NSW

A priority notice is a form of land dealing which, once registered on title:

  • acts as a notice to the public that someone intends to lodge a dealing on a title (e.g., a transfer, lease or mortgage); and
  • temporarily (i.e. for the period of the priority notice) prevents the registration of other dealings to preserve the priority-on-title of the dealing covered by the priority notice. Subsequent dealings are noted as ‘unregistered dealings’ until the priority notice is withdrawn or lapses.

So if for example you intend to lodge a transfer, you can register a priority notice to hold the transferee’s place on title until settlement.

Lodgement, duration and cost

Priority notices can only be lodged online via PEXA.

A priority notice’s initial priority period of 60 days from the date of registration can be extended once for 30 days. However, it can be withdrawn before the end of the 60 days (or a 30 day extension).

Priority notices cost $40.31 to register, $16.70 to extend, and $16.70 to withdraw. Lodgement and withdrawal of a caveat costs $147.70 to register.

Pros and cons

Pros

  • they are cheaper to register than caveats
  • they are quick and easy to lodge
  • registration of a priority notice does not require a caveatable interest–the only requirement is that you are a party to a land dealing
  • a single priority notice can remain on title for 60 to 90 days, and
  • sequential priority notices can be lodged without limit in relation to the same land dealing (when a previous priority notice lapses).

Cons:

  • unlike a caveat, a priority notice is time limited and lapses, and
  • priority notices do not prevent registration of all subsequent dealings (e.g. a caveat is not subject to a priority notice and there can be competing priority notices).

Priority notices vs caveats

One disadvantage of priority notices is automatic lapsing. After a priority notice is registered, subsequent dealings lodged for registration are noted on title as ‘unregistered dealings’ until the priority notice dealing is registered or the priority notice lapses or is withdrawn.

If the relevant dealing cannot be registered within the priority notice period, an unregistered dealing noted on title can be registered immediately on the lapse of the priority notice before a second priority notice can be lodged.

Consequently, if there is a caveatable interest, it may be preferable to lodge a caveat than a priority notice, especially if the registration date of the dealing is uncertain. A caveat remains on title indefinitely, preventing virtually all dealing with the title until it is either withdrawn (e.g., when the caveator receives payment) or is lapsed by the owner or an interested person. As lapsing can be complex (involving court proceedings if the caveator defends their caveatable interest), a caveat gives stronger protection than a priority notice for the priority of a proposed dealing.

Priority notices and caveats have distinct purposes:

  1. the priority notice preserves the priority of a dealing to be lodged for registration later;
  2. the caveat acts as a form of security and a warning to third parties that the caveator claims an equitable or legal interest in the land.

Where there is a caveatable interest, either can be used to protect the priority of an impending dealing. However, where a caveatable interest exists, registering a caveat is a safer bet.

Conclusion

Although priority notices can be used as a quick and cheap tool to preserve a future dealing’s priority on title, it is important to consider whether:

  • the dealing will be registered within the priority notice period, and
  • whether, in the circumstances, a caveat should be lodged instead.
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What is a Reseal of Probate?

The effect of a Grant of Probate or a Letter of Administration.

When a person dies the executors named in the person’s Will must apply to the Supreme Court of NSW for a grant of probate for the Will made by the deceased to be recognised. A Grant of Probate allows the executors to withdraw the assets from different entities. Until it is issued, none of the assets of the deceased can be distributed to the beneficiaries named in their Will.

If the deceased did not have a will, a letter of administration is granted to an administrator.

What is a Reseal of Probate?

A reseal of probate is the expression used when you need to apply to another state’s Supreme Court, so that a Will that has already obtained a grant of probate in one state, can be recognised in another state. Once a reseal of probate has been granted, the executor can also deal with the assets under the Will that are not located in the state where the original grant of probate was issued.

Obtaining a Reseal of Probate in NSW

The executor or administrator of deceased estate in another jurisdiction obtains the grant of probate or administration in the state or country where the deceased passed away.

However, a grant of probate is state-based and probate laws can differ between states and countries. A deceased’s assets, such as shares or investment properties, may be in various locations. Assets not located in NSW cannot be dealt with under a NSW grant of probate

Rather than requiring a fresh application for a grant of probate in NSW, you can apply to the Supreme Court of NSW asking that it recognise the original grant by resealing the original grant with the seal of the Supreme Court of NSW.

Not all foreign grants can be re-sealed. The Supreme Court of NSW will only recognise grants made in one of ‘Her Majesty’s Dominions’ (being certain Commonwealth countries and other Australian States and Territories. Probate granted in Western Australia , Northern Territory, South Australia, Queensland, Victoria , Australian Capital Territory or Tasmania can be resealed with the seal of the Supreme Court of NSW.

Why do I need to obtain a Reseal?

The Grant of Probate is proof that the named executor or administrator is authorised to deal with the estate’s assets. The asset holder (such as a bank, nursing home, share registry or NSW Land Registry Services) may require the grant before releasing the asset. If the Grant has been obtained outside NSW, the asset holder may require the Supreme Court to approve the Grant.

What is the effect of a Reseal of Probate or Reseal of Administration?

A re-sealed grant of probate or grant of administration made in another state or country has the same effect and operation in NSW. A resealed foreign grant must be accepted as if it had been made by the Supreme Court of NSW. The executor can then gain access to and distribute to beneficiaries the deceased’s assets located in NSW.

Can I avoid having to obtain a reseal in NSW?

Depending on the type, size and value of the asset(s) located in NSW, you may be able to avoid having to obtain a reseal in NSW by signing a declaration and/or indemnity as required by the asset holder. Each asset holder will have their own requirements. You should provide them with proof of the original grant and death certificate and ask them what their requirements are to release the assets. Shares may be released or transferred without the need for the grant to be resealed in NSW if it has been obtained in Australia and a section 1071B statement (which may be downloaded from the share registry) is completed.

How can I obtain a reseal in NSW?

An application for Reseal of probate must be made using the Court form accompanied by the information required by the legislation and rules of court. The process involves filing Court documents and advertising requirements.

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Home ownership and your Will

Real estate is one of the most valuable assets people own during their lifetime. Property owners may not realise that whether or not real estate passes to the beneficiaries named in their Will depends on the type of ownership.

Sole Ownership, Joint Tenants or Tenants In Common?

There are different ways to be the legal owner of a property asset. Each form of ownership has a different implication when it comes to deceased estates, so it is important to understand which applies to you.

Sole ownership means the property is exclusively owned by a single person and no other person has any interest in the property asset. If the deceased person was the sole owner of the property, the asset usually forms part of the estate for distribution in accordance with the Will (if there is one).

There are two ways of holding joint property. Where two or more people own property, they can hold it jointly as joint tenants or as tenants-in-common. The mode of ownership is significant and dictates what happens to the property on the death of one of the joint owners.

joint tenancy is the more common form of ownership and can be thought of as similar to a joint bank account. Ownership as tenants in common can be with two or more people and in equal or unequal shares.

Property Ownership as Joint Tenants

Joint tenancy comes with the ‘right of survivorship’. Owning a property as joint tenants means that when one joint owner dies, their interest in the home passes to the surviving joint owner, irrespective of what is in the deceased person’s Will. The deceased person’s share is not included in the deceased estate for distribution to beneficiaries.

The property will usually transfer to the surviving joint tenant without having to go through the courts. A copy of the death certificate is generally required as proof of the death.

Property Ownership as Tenants in Common

If the deceased person owned a property with someone (e.g. a spouse, partner, or someone else) as ‘tenants in common’, each owner (or ‘tenant’) owns a portion of the property asset. The ownership need not be in equal shares – it can be split any way the tenants in common agreed on when they purchased the property.

What happens to deceased estate when a tenant in common dies?

If a property is owned as tenants-in-common, there is no right of survivorship. If one of the joint owners dies their share of the property does not automatically go to the surviving owner. The deceased owner’s share of the property becomes an asset of their deceased estate for distribution in accordance with their Will (or if the person has no Will, as per the laws of intestacy).

What if joint owners’ circumstances change?

Owning property as joint tenants may be preferable for many people. However, difficulties can arise if circumstances change. For example, in the event of a relationship breakdown, a joint tenant may no longer want their share of the property to pass automatically to their estranged spouse or partner on their death.

 Can ownership be changed from joint tenants to tenants-in-common?

It is possible to apply to NSWLRS to have the ownership changed from joint tenants to tenants-in-common without the consent of the other property owner(s). Once registered at NSWLRS, a new certificate of title will be issued showing the registered owners as tenants in common (expressed in parts such as “1/2”).

There is a risk in that a person may believe their property will pass according to their Will, but in reality it may not. If you are in doubt about the mode of holding for any jointly owned property you have, and want to confirm what implications this has on your Will, seek advice by calling Anthony Steel on 0451 118 644.

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Superannuation and estate administration

Superannuation is becoming an increasingly significant asset. For many Australians, their super is one of their largest cash assets. Part of the administration of an estate may require superannuation to be dealt with.

How do I give superannuation away when I die?

Your Will is a legal document that deals with and distributes assets that you own. Superannuation does not normally form part of your estate and you can’t include it in your Will. It usually goes directly to the person that you nominate to receive the benefit from your superannuation.

Superannuation can not be left to someone in your will. If you don’t understand how you can distribute this money to your beneficiaries and erroneously include it in your Will it can cause problems.

Why can’t I leave Superannuation in my Will?

Unfortunately, when making a Will, the Will-maker can mistakenly believe that super is owned by them and will be distributed along with the rest of their estate. However, your superannuation isn’t considered as one of your assets and cannot be included in your estate.

Due to the way in which Superannuation schemes are set up the money in your Superannuation Account is not owned by you personally. It is owned and managed by the trustee of your Superannuation Fund person who holds it on Trust on your behalf. Only the trustee can distribute the money in your account. They can distribute your superannuation to your beneficiaries, but not as part of your Will.

The Trustee cannot simply do as they like with this money; there is legislation in place to protect your super.

How can I bequeath my superannuation?

Superannuation does not automatically form part of your Estate. You should ensure that you contact your Super Fund with information about your beneficiary or Estate.

What is a death benefit nomination?

A death benefit nomination is a non-binding nomination made by you. In it you express your wishes to the trustee of your superannuation fund about who you would like to receive your death benefit on your death.

What is a binding death benefit nomination?

A binding death benefit nomination is a binding nomination made by you directing the trustee of your superannuation fund who to pay your death benefit to on your death. Traditionally, binding death benefit nomination lapse after three years, so you need to update it before it expires. However, some funds now allow for non-lapsing binding nominations which need not be renewed.

A binding death benefit nomination specifies that the trustee must distribute superannuation in your account to the beneficiaries you nominate.

How do I ensure that my super is distributed according to my wishes?

You can ensure that your Superannuation is distributed according to your wishes by notifying your Superannuation Fund with your Binding Nomination and by inserting a Superannuation Will Clause in your Will.

In your Will you can stipulate who is to receive the benefits of your superannuation account. You nominate through your superannuation fund your legal representative as the beneficiary of your superannuation, who can then distribute it according to your Will.

For this strategy to work, your Will must include a superannuation clause and you must keep the binding nomination and the beneficiaries in your Will up to date.

A simpler option is to make a binding death benefit nomination with your superannuation fund and the money will be distributed to the named beneficiaries on your death.

There are only certain types of people who you can nominate under a binding death benefit nomination. These include a spouse, a de facto, children (in some circumstances including step children), dependents, inter-dependents, and your estate.

How do I make a Binding Nomination with my super fund?

You nominate someone using a death benefit nomination form or a binding death benefit nomination form.

What happens if I don’t make a Binding Nomination?

If you don’t make a binding nomination or it has expired at the time of your death, the trustee of the super fund has the ultimate discretion about who will receive that benefit. They can either pay the money directly to your estate or decide which of your beneficiaries should receive it.

Mid Mountains Legal are experienced in working with Wills and Estates and can ensure your peace of mind with comprehensive legal advice and guidance.

Contact Mid Mountains Legal on 02 47593742 or 0451118644 for a free phone consultation about your Will and distributing your Superannuation.

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Inheritances and family law

Will the Court give me back what I put in?

An inheritance is not a protected asset in family law property settlements. Depending when an inheritance is received, the family law courts exercise wide discretion about how it is treated.

Will an inheritance be included in the property pool?

The treatment of inheritances can result in bitter disputes between parties in family law property settlements. An ex-partner who received an inheritance may believe they should retain all of it whilst the other ex-partner may argue that it should from part of their shared pool of property to increase their overall entitlement.

The family law court’s treatment of an inheritance can be confusing. One inheritance can be excluded entirely from the property pool whilst another can be treated as a separate pool distinct from the other property. Whatever approach the courts choose to adopt, they will not ignore an inheritance.

An inheritance will only be considered where it has already been received or where evidence shows that party is likely to receive an inheritance in the very near future e.g. if a parent has lost the capacity to change their Will. The mere expectation of a future inheritance will not affect the division of assets of the relationship. The family law courts will not be interested in a possible inheritance an ex-partner might one day receive without evidence that the entitlement is more than purely speculative.

What will the family law courts consider?

A key issue in property settlement negotiations is how an inheritance received during a relationship is to be treated.

How an inheritance is dealt with in a property settlement depends on the circumstances of the particular case. Following are some of the factors taken into account in determining whether the inheritance forms part of the asset pool, or is ‘protected’ from distribution in the settlement.

  • the timing of the inheritance i.e. before cohabitation commenced, during the de facto relationship/marriage, or after separation
  • the intentions of the deceased;
  • how the money was used; and
  • the size of the inheritance compared to the value of the property pool.

The family courts will consider what weight, if any, should be given to the inheritance and assess it along with the parties’ other contributions.

If an inheritance is received shortly before or after the commencement of the relationship, it will be considered an initial contribution by that party and it’s value will included within the asset pool. The value of the inheritance as one of the contributions made by that party will be taken into account when determining that party’s entitlements on separation. The magnitude of the impact of the inheritance on adjustments to a party’s entitlements depends on it’s size and the amount of the party’s other contributions to the asset pool.

If an inheritance is received during the relationship, how it is treated depends on how it was applied and the intentions of the deceased. If the inheritance is spent on improving the family home, paying for the day to day expenses of the family and generally used for the benefit of both parties, it is likely to be treated as a financial contribution by the party who received it.

If an inheritance is received after separation, it will generally not be viewed as a contribution to the asset pool and may be ‘protected’ from distribution between the parties.

If the deceased had specific intentions for the inheritance, this may influence how it is treated. For example, if they specified that it was for the benefit of the family as a whole, it is more likely to be treated as part of the asset pool. If, however, the deceased specified that the bequest was to a party for a particular use who then kept the inheritance separate from the asset pool, it is likely to be treated as separate from the asset pool.

If the ex-partner of the beneficiary assisted with caring for the deceased (e.g. if a deceased parent lived with the couple) the inheritance is more likely to be treated as belonging to the family as a whole.

Where a large inheritance is received late in a relationship and the test of the asset pool is small and if a division of the balance of the asset pool would result in an unjust settlement considering the parties’ contributions, the inheritance may be treated as part of the asset pool. That is, if the party who has made the greater contribution is not the one who receives the inheritance, it may be included to give that party a just settlement.

Resolution of a property settlement

It is always preferable if possible for parties to family law property negotiations to settle the matter amicably. This can be achieved through direct negotiations, through lawyers, or by undergoing family dispute resolution. If a dispute cannot be resolved amicably, either party can file an application for property orders in the family law courts. An application must be filed within 12 months of a divorce becoming final or for de facto relationships, within two years of the date of final separation.

Call us for free advice on the status of an inheritance in a family law context.

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