In Small v Phillips (No 2) [2019] NSWCA 268 The Supreme Court released the following judgement: “The Court of Appeal has allowed an appeal brought by the grandson of a woman lacking testamentary capacity, and has granted leave for an order to be made under the Succession Act 2006 (NSW) for a Will to be made on her behalf. The Court found that a draft Will which had been prepared prior to her loss of capacity was, or was reasonably likely to be, a Will that would have been made and finalised by the grandmother if she had testamentary capacity at the time the draft Will was ready for signing and that it was appropriate for an order authorising such a Will to be made.” Unfortunately, it has taken the estate beneficiaries a great deal of effort and expense to get the Grandmother’s draft will upheld when a quick visit to her lawyer and a nominal fee would have legitimised her will.

If you haven’t made your will yet, call CBD Law today to make an appointment.

Wait… what?

Unless you execute a Binding Death Benefit Nomination (BDBN) with the trustee of you superannuation fund, the ultimate discretion of who gains access to your death benefits remains with the trustee. A BDBN must be duly executed to be binding on the trustee and this ordinarily requires a written document to be signed and witnessed by two witnesses who are over 18 years and are not beneficiaries of the fund. If the requirements of the trustee are not adequately met, your nomination is not binding. The BDBN will lapse after 3 years and will need to be renewed to remain binding.
And, don’t be misled into thinking that if you check a box on the trustee’s website, you have certainty over where your death benefits will end up. This is likely to be a non-binding death benefit nomination, which means that whilst the trustee may take these wishes into account in making its decision, it is not legal bound to it.

Who can I nominate?

Under the legislation, super death benefits can only be paid to the member’s superannuation dependant or personal legal representative (i.e. executor of their estate). If the benefits are paid into the member’s estate, the death benefits can then be distributed in accordance with the terms of the will. This can have implications is terms of both taxation and also in terms of forming part of the pool of assets that are open to being challenged by a family provision claim. For these reasons, it is important to get both legal and financial advice in making these decisions so that it does not result in unintended consequences.

If you would like to discuss your estate planning with our estate planning lawyer, please phone our office on (02) 4322 6666 and make an appointment with Naomi Morris today.

The content of this article is provided as general information only and is not intended to substitute legal advice.

Legal capacity is the first requirement when it comes to providing instructions to a lawyer and we can lose it without warning through injury (for example, an acquired brain injury) or through illness (for example through a stroke, dementia or mental illness). No one is immune from the risk of sudden incapacity.

An Enduring Power of Attorney is a document that allows you to appoint a trusted person (or persons) to look after your legal and financial matters if you temporarily or permanently lose the capacity to make these decisions for yourself. Under this document, your attorney has the power to, for example, operate your bank accounts, attend to the sale of assets (including your house), deal with services on your behalf, attend to legal matters on your behalf and deal with Centrelink and so on. This document has the flexibility to become operative straight away (i.e. even when you still have capacity).

When it comes to your health and lifestyle, however, a document called an Appointment of Enduring Guardian come in to play. Your guardian is the person (or persons) that you appoint to consent to medical and dental treatment on your behalf, decide where you will live, arrange personal services for you and can even refuse consent to medical treatment in specific circumstances (i.e. during palliative care). This document can only ever become operative if or when you lose capacity. No one can consent to these things on your behalf whilst you have the capacity to do so yourself.

Enduring Power of Attorney and Appointment of Enduring Guardian documents dovetail together to ensure that all of your important needs are taken care of. Both roles are fiduciary duties, which means that your attorney and your guardian need to always act in your best interest and cannot benefit in any way from exercising their powers.

If you were in a position where you no longer had legal capacity and you did not already have these documents in place, it can be quit onerous on your loved ones to quickly obtain the legal authority they require to make these decisions on your behalf. In this instance, your loved ones would need to make an application to the NSW Civil & Administrative Tribunal to obtain a Guardianship Order and a Financial Management Order. The discretion then lies with the Tribunal to decide who will exercise these functions and it may see fit to appoint the NSW Trustee & Guardian, or another person who you would not have chosen for yourself.

Planning for incapacity means that you maintain control and have certainty over who you will have making serious decisions on your behalf when you are at your most vulnerable. I like to think about them as an insurance policy – you hope that you never need it, but if you do need it you will be very glad that you have it!

If you would like to discuss your estate planning with our estate planning lawyer, please phone our office on (02) 4322 6666 and make an appointment with Naomi Morris today. Naomi can meet with you at either the Gosford or Wyong office.

http://www.perthnow.com.au/news/opinion/tom-percy-courts-decision-to-award-25-million-payout-to-olivia-mead-is-unsurprising-given-colossal-1bn-estate/story-fnhocuug-1227242851770