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WHAT ARE THE SUCCESS RATE AND REASONS FOR CONTESTING A WILL?

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74% of family provision claims by family (children or partners, including ex-partners) were successful.

Most wills are contested under family provision legislation.

Studies undertaken by the University of Queensland in 2015 found that:

  • 86% of claims are brought by immediate family: either children of the deceased (63%) or partners (including ex-partners) (23%) – This means adult children are the most common claimants in Will contests.
  • Contestation is most commonly driven by both exclusion and significant disparity in distribution.
  • When there is a contestation, there is a high rate of success, whether through the Court or through mediation.  74% of family provision claims by family (children or partners, including ex-partners) were successful.

Common Reasons for Contesting a Will

Contesting a Will refers to claims pursuant to the family provision legislation. The said studies also found that contestation is most commonly driven by:

  • Inadequate provisions to meet the needs of a family member.
  • Type and quality of relationship with the deceased.
  • Exclusion and significant disparity in distribution, where a family member felt a sense of entitlement to a better distribution.

Significance in Findings

The Will maker:

With 51% of estates contested were through family provision claims, if you are making  a will, you need to give very careful and detailed considerations to how you should distribute your assets. The more complex the family relationships, the higher the chance of your Will being contested and there being a dispute between your family members upon your death.

At the time of making your Will, you need to consider ways to reduce contestation risk by addressing underlying family dynamics and issues – such as obtaining strategic advice from lawyers, obtain counselling, properly communicate with family, etc.

The Executor or Administrator:

It is highly likely that the deceased representative who has obtained grant of Probate or Letter of Administration (i.e. the executor or the administrator) may find himself or herself having to spend a lot more time dealing with legal proceedings, engage lawyers to defend the contestation, and obtaining expert evidence to defend against a claim, as opposed to getting on with the task of actually administering the estate. This can be extremely time-consuming.

A family member who can be a potential claimant:

There is a high success rate for a family member who is seeking family provisions from a deceased’s estate.  Despite there being a Will in place, the Court has the discretion to make orders and award provisions to a family member.

ABOUT THE WRITER

Kelvin Tang has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing service on Commercial Law, Dispute Resolution & Litigation, Family Law, Wills & Estate Planning and Settlements.

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5 IMPORTANT THINGS YOU MUST KNOW ABOUT ESTATE PLANNING

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Who Doesn’t Have a Will?

Incredibly, more than 40% of Australian does not have a valid Will.

If you die without a will, in legal term it is called “intestate”, you lose control of who will inherit your assets.  The Government decides as to the distribution of your estate.
You could spend a lifetime creating assets, but these assets may not be distributed to the ones you love unless you have a proper estate plan in place.

Without a will, your potential beneficiary (who could be any one related to you) will have to put your estate through a tedious and slow-moving process in the court in order to help you distribute your assets.

Why Do People Not Have a Will?

Some of the common reasons why people do not have a Will:

  1. They are too busy and “just haven’t gotten around to making one”
  1. They feel that making a Will wasn’t urgent
  1. Some don’t think they even need a Will
  1. They don’t want to think about death

None of these reasons will be justified if you think about your loved ones and the hassles they have to go through if you die without a proper estate plan:

How could your loved ones possibly know what you want for them?

Do they know what to do or where to begin?

Would they feel you actually do not really care about them?

Especially if you are going through or have recently gone through a life stage changes (such as having children, getting organised, cohabitation, and buying or selling your house or business), you need to get your estate plan organised (or re-organised) and your Will made (or re-made) in order to reflect your current intentions and circumstances.

There is no reason to delay; making an estate plan can be very straight forward.  Do seek advice from your financial and legal advisors for professional assistance.

Five Things You Must Know About Having an Estate Plan

Here are FIVE (5) IMPORTANT things you must know about having a proper estate plan:

1.  Take Control of Your Hard-Earned Estate

You have worked hard for your assets, you should control over what happens to your assets in the event of death.

You have spent a lot of time accumulating wealth and assets, it is only logically to spend adequate time planning:

  • How you wish to deal with your assets – who and what to gift, is there any person you want to exclude;
  • Who should you entrust to carry out your wishes;
  • Who can look after your financial affairs and your personal wellbeing if you become incapable of looking after yourself.  To do this, you will need an enduring power of attorney and/or an enduring power of guardianship;
  • What is the best way to plan your succession and exit strategy with minimum tax implications on your hard-earned assets;
  • If you have huge liabilities attached to your estates, how to pay off these liabilities upon your death or when you are no longer capable of making decisions; etc.

TIPS:  Be clear about what you want to do with your estate, who you want to look after and how, and be pro-active in seeking help from professional advisors.  They should be able to guide you through the process and make it simple for you.

2.  Avoid Your Family Getting Into Costly Disputes

Disputes are very common between family members, partners (including ex-partners), and extended family, especially where there are complex family situations such as blended families, large estates, estates with no close family to benefit, and poor interpersonal relationship within a family.

Studies carried out in Australia have found that estate contestations are commonly driven by exclusions and significant disparity in distribution, and the success rate in family provision claims are very high indeed.  More of this in our next article, volume no. 2, “Success Rate in Contesting a Will”.

One of the main purposes of having a proper estate plan is to avoid your family members somehow get intertwined into very costly disputes.  It is very likely that  costs of disputes will be paid from your hard-earned estate.

The saddest thing is, it will be extremely difficult for your family members to repair the damage done to their relationships after being intertwined into legal disputes.   This is precisely what you want to avoid.

TIPS:  Appoint an independent professional person as executor and trustee.  An independent executor will be impartial in administering your Will.   This will help reduce the risk of your beneficiaries from suspecting (and become estranged to) an executor and trustee who is also a family member.  You also need to have a clear strategy  when planning your estate in order to reduce risk of contestation.  Strategies could include thorough considerations and identification of potential risks, adequately deal with each risk item, etc.  For instance, if you wish to specifically exclude a person from contesting your Will for provision, you should state in your Will why that person is excluded.

3.  Truly Care for Your Family

Your Will, a legal document containing your last wishes, literally spells out to your loved ones that you love them and you truly care about them.

Wills are primarily used to distribute assets, choose executors, clarify funeral arrangements, nominate guardian.  Each of these items requires careful and thorough considerations, which include:

  1. How much of a provision is adequate for each of your beneficiary.
  1. Are there minor beneficiary (under 18 years old) and what type of safety mechanism do you need to put in place to protect them from missing out on distribution or losing their entitlements? 1.How to deal with potential claims, for instance, by ex-spouse or estranged family member?
  1. Who can you entrust your estate to?  Who are the best candidates for you to nominate as Executor, and will s/he consent to help you? Would you pay him/her a fee? If so, how much?
  1. Do you have liabilities, such as mortgage, tax debt, personal loans, etc?  If so, how will you deal with your liabilities?  You do not want to leave liabilities for your loved ones (especially a minor) to deal with.  They may not have the ability to look after themselves financially, let alone any liabilities you may leave behind for them.

Will is a major component of the estate plan, but it does not deal with circumstances when you become incapacitated (but before your death).  The questions in this circumstance include:

  • Who can help you sort out your financial affairs, such as paying your bills, mortgages, etc.  This is where an Enduring Power Of Attorneyis extremely important.
  • Who can look after your daily needs and general well-being?  You can do this with an Enduring Power Of Guardianship.  Your family member will know who you would like to appoint as the person (or guardian) to look after you.

How will your family know what your wishes are when you are unwell and know what instructions you want to give to your doctor? No one will dare to give any instructions for they are afraid to have made a wrong decision for you.  This is where you need an Advance Medical Directive.

TIPS:  Wills is just one part of an estate plan.  You need to also consider whether you need an EPA, EPG and an Advance Medical Directive in planning for your future.

4.  Opportunity to Plan Your Succession/Exit and Minimise Tax Implications

If you are a business owner or have investments in businesses, your estate plan will have to also be in line with your succession or exit plan for your business.

You may be a very good business operator and have a great team of key employees around you, and your business generates substantial income for your family.  If you are gone, say leaving your spouse or children to take over your shares in the business, s/he may not be able to do the same as you or even have the same level of loyalty you have from your key people.

You need to give careful consideration towards not just ownership transition, but also management transition. These two are different.  It may be the case that your key employees are the core of your business and you cannot afford to let them leave.  You need to strategically plan how to keep them in despite your departure from the business.

There may also be capital gains tax implications resulting from transfer of ownerships of assets.    We strongly recommend that you obtain independent tax or financial advice from accountants.

TIPS:  You are juggling between planning your personal estate, funding your debts, your personal affairs, and also your business succession or exit plan.  You need to adopt a cohesive approach to deal with all issues so as to minimise disruption to your busy daily routine.   When you are doing your estate planning, it is the best opportunity to also sort out your business succession plan and do proper tax planning.

5.  Communicate with Your Family

People engage in disputes because they did not get what they expected.  This is a direct result of no communication or lack of communication.

Whilst estate planning is not an easy topic to openly discuss, it is important that you open communication with your family about it.  You can start “massaging” their expectations and have them mentally prepared.

The whole reason you are putting together an estate plan is because you truly care for your family and you want to save them from all the unnecessary hassles and disputes.  There should be no reason why you should not discuss your intentions with at least your immediate family and obtain their support.

There is nothing wrong with letting them know that you have given careful considerations and you have adequately made provisions to look after them.

Ultimately, it is your testamentary freedom to dispose of your assets the way you like.

TIPS:  Communicate upfront to avoid disputes, or communicate and mediate later when the disputes arise.  The preferred option is obvious.

Duty to be Proactive?

If you are serious about protecting and providing for your loved ones in the event that you are gone or becoming incapable to look after yourself, you need to be pro-active in putting together your own estate plan, you need to be pro-active in getting the right advice and the right help to put it together for you, you need to be pro-active in making changes to your legal documents when there is a life stage changes happening to you (such as divorce, cohabitation, sale of assets, etc).

Do your loved ones deserve it?  The call is in your hands.

ABOUT THE WRITER

Kelvin has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing service on Commercial Law, Dispute Resolution & Litigation, Family Law, Wills & Estate Planning and Settlements.

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8 TIPS FOR NON-RESIDENT INVESTORS IN AUSTRALIA

Blog & Articles, Immigration Law, Investment Visa, Migrants, Migration Law, Permanent Visa, Perth Immigration Lawyer, Tang Law, Visa 132

1.      Australia Business Culture

Australians believe in a fair chance for all and are open to tell you what they want.   Australians tend to open conversation straight away about the business on the table.   In contract, most business people from Asia likes to first build the relationship (e.g. have a dinner or casual chat) and fell comfortable before entering into business talks.

Australia encourages work-life balance.  You will find that Australians may not be prepared to meet for work matters outside of their working hours.

TIP:  Be prepared to talk business in the first meeting, be specific with what you want, it is expected – be frank and transparent.

 

2.     Contractual Spirit

Do expect slow decision making as Australians like to consult advisors and stakeholders before deciding.

When a decision is reached and contract is entered into, it is taken very seriously.  In contrast to some parts of the world, especially the developing countries, contracts are often disregarded.  In Australia, contracts are comprehensive, transparent and enforceable by the parties.  Contracts are analysed carefully before agreements are reached and signed.

If a contract is breached, the non-defaulting party can bring an action in Court.

TIP: Be patient with the process.  THINK CAREFULLY and get advice before you sign any contract, especially in Australia.  Once signed, you cannot deviate from it.

3.     Foreign Investment Review Board

General rule of thumb for a “foreign person” buying Australia real estate is that you must apply for approval from Foreign Investment Review Board (FIRB).  A “foreign person” is generally:

  • an individual that is not ordinarily resident in Australia;
  • a corporation, trustee of a trust or general partner of a limited partnership where a non-resident individual or foreign company holds a substantial interest of at least 20%; or
  • a corporation, trustee of a trust or general partner of a limited partnership in which two or more foreign persons hold an aggregate substantial interest of at least 40%.

Failure to obtain FIRB approval is a breach of the Commonwealth law.  Consequences include:

  • The maximum civil penalty for individual is up to $52,500
  • If criminal penalty is imposed, the maximum is $157,500 or 3 years imprisonment.

Commercial land, agricultural land, and Australian corporation (general businesses) have different thresholds where FIRB approval is required.

TIP: Please be mindful to check whether you need to obtain FIRB approval before signing any contract.

 

4.      Taxation

Tax system in Australia is complicated.   At the Federal level, there is:

  • Withholding tax for non-resident (which can range from 10% to 47%);
  • Capital gains tax (Company is not entitled to certain CGT concessions);
  • Company tax (currently at 28.5%);
  • Goods and services tax (which is 10%).

At the State level, there is transfer duty, land tax, and other State’s taxes depending on which business you are investing in.   Transfer duty for purchase of land is around 5% of the purchase price, but it can be tricky. For example, if you decide to change the purchaser’s name on a contract, you may have to pay double transfer duty.  Another example, purchase of shares in “land rich” company may trigger transfer duty.

At the Local Government level, there are council rates and taxes.

TIP: Seek advice from qualified accountant before committing to any investment.

 

5.     Using Correct Structure

Using the correct legal structure to conduct your investment can help you with assets protection, limit your liability, effectively minimise tax, or privacy protection for the “true owner”.

Legal structures in Australia include sole proprietorship, partnership, company, and trust.

TIP:  Know which structure best suits your purpose and set it up before entering into any contract to invest.

 

6.     Common Law and the “Nemo Dat” Doctrine

Australia is a common law country.  Our legal system comprises of common law and legislations.    There is an old common law rule called the “nemo dat” doctrine which basically means that a person who is not an owner of goods or who does not sell those goods under the authority or consent of the owner cannot pass a better title than she/he had.

TIP:  Check the proof of ownership AND check the seller.  If unsure, you can always include a “due diligence” clause in the contract allowing you time to conduct checks and searches before you make the investment.

 

7.     Australia Consumer Law

The Australia Consumer Law (“ACL”) is a national law for fair trading and consumer protection.  If you believe that you have been treated unfairly in a transaction or mislead into investing, you may be entitled to the protection and remedies under the ACL.

TIP:  Don’t wait till it is too late.  There is limitation period to your rights under the ACL.

 

8.     Business Migrants – “Eligible Business”

Business migrants are required to make investment into “eligible business”.  Our Common Law and migration legislation are very specific about what constitutes a “business” and an “eligible business”.  Investment into a wrong business can cost you the visa.

TIP: First, fully understand the conditions on your visa and its legal implications, and second, make sure your contract contains terms that will help you with complying with the visa conditions.

ABOUT THE WRITER

Kelvin Tang has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing migration advice to clients, advising on “Eligible Businesses” within the definition of the Migration Regulations, assisting migrants (investor of the business) with satisfying migration requirements, making visa applications and appealing cancelled or refused visas in the Federal Court of Australia, Administrative Appeals Tribunal and Migration Review Tribunal. Kelvin also has extensive experience in civil litigation, commercial and corporate law matters.

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HOW TO SETTLE FAMILY LAW DISPUTES?

Binding Financial Agreement, Blog & Articles, Consent Order, Family Court, Family Disputes, Tang Law, Violence Restraining Order

Part I: Consent Orders.

In 2015, the Family Court of Western Australia received over 15,000 applications.  The median time for a matter to reach trial is 89 weeks!
It makes logical sense to attempt to settle family law dispute amicably and properly formalise the settlement terms.

 

Importance of Formal Agreement

In the case of Eufrosin & Eufrosin [2014] FamCAFC 191, the wife was ordered to pay her estranged husband a sum of $500,000 following a gambling win despite the fact that the parties had been separated for more than five years and had made informal agreements and distributed the assets accordingly at the time of separation.

This case highlights the importance of finalising any agreement made to avoid claims in the future.

If there is transfer of ownership interest in real estate from one party to the other, this transfer in real property will be exempted from transfer duty if the agreement is formalised properly.  This can be a significant savings.

Two Ways to Formalise Settlement

There are two ways you can finalise the property settlement upon separation by agreement:

  1. Apply to the Family Court for Consent Orders; or
  2. Entering into a Binding Financial Agreement.

This Part I of the article deal with Consent Orders.

What is a Consent Order?

In essence a consent order is a written agreement between both parties that is sealed and affirmed by a court.  Once it is sealed by the Court, the Consent Orders become orders of the Court and are binding on the parties.

In Western Australia, consent orders are made by the Family Court of Western Australia and covers aspects such as property orders, parenting orders and spousal maintenance.

What are the benefits of Consent Orders?

The purpose of Consent Orders is to ensure that agreements between parties are in writing and affirmed by the court in order to avoid further disputes in future.

What Consent Orders can be made by the Court?

For orders related to property settlement and spousal maintenance, the Court must give consideration to whether the orders sort by the parties are just and equitable and will take into account all factors of the relationship such as the contributions of both parties to the relationship and the future needs of each party.

For orders related to parenting arrangements the Court will consider whether the orders made are proper and appropriate arrangements for the child and whether the orders are in the best interests of the child.

What is the Time Limit in applying for Consent Orders?

Consent orders may be filled any time after separation or within one (1) year after a divorce order has taken effect or two (2) years for breakdowns in a de facto relationship. If the parties have exceeded these time frames leave of the court may be obtained.

How long does it take for the Court to grant the Consent Orders?

Generally speaking, it takes around 6 weeks for the Family Court to review and seal the consent orders provided there are no complications.

There may be situations where the Court requires further information from the parties.  This can cause delays in the application. Moreover, the Court may require the parties to attend hearing for further clarification.

Proper preparation of the Consent Orders can significantly reduce such delays and complications.

Before entering into Consent Orders

It is important that prior to entering into the Consent Orders you fully understand your rights and your entitlements, as well as the legal ramifications of entering into the consent orders.  Do not agree to settle until you know, legally, what you are entitled to receive or keep.

You are entitled to make an informed decision as to whether or not to enter into the consent orders.

For more information regarding consent orders, please contact our lawyers at TANG LAW.

ABOUT THE WRITER

Kelvin Tang has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing family law advice to clients, making divorce applications and applying for Consent Order. Kelvin is able to offer his clients clear and practical advice in relation to children’s disputes, property settlements between married and de-facto couples, spousal maintenance and child support.

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HOW RESTRAINING ORDERS CAN PROTECT YOU FROM ACTS OF VIOLENCE AND ABUSE

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Australia has seen a rise of domestic violence over the past number of years. However, victims of violence may be able to receive protection by way of a restraining order.

If you feel threatened, intimidated or are being harassed by another person, then you should consider applying for a restraining order, especially if you are concerned that such acts will continue.  There are two types of restraining orders that you can apply for: Violence Restraining Order and Misconduct Restraining Order.

What is a Violence Restraining Order (VRO)?

A Violence Restraining Order (VRO) is an order made by the Magistrates Court to restrain a person from committing an act of abuse, causing fear, or intimidation to another person. There are two types of VROs,:

  1. a VRO against a person with whom you are in a family or domestic relationship; or
  2. a VRO that is against a person with whom you are not in a family or domestic relationship.

The purpose of a VRO is to protect you against a person who has or is committing acts of abuse and/or is intimidating towards you. This can include stopping a person from damaging your property.  You can apply for a VRO if the person has committed an act of abuse towards you or if you fear that the person will commit an act of abuse.

What is an Act of Abuse?

An act of abuse includes any assault, whether it causes injury or not, any act that causes an injury, kidnapping, stalking, or threats to do any of the things mentioned. An act of abuse can also include damage to your property and continuous behaviour that is frightening, or emotionally abusive to you.

What will a Violence Restraining Order (VRO) do?

A restraining order acts to bind an offender to certain conditions. For example, a VRO condition may require that a person not come near your home or place of work, or within a certain distance of you. They may not even be allowed to call or message you, or call or message your friends. The conditions set will depend on your individual situation, and the VRO will be worded accordingly.

A VRO may be in place for up to two (2) years. If a person disobeys or breaches the terms of the restraining order, they may be fined or face imprisonment.

How do I obtain a Violence Restraining Order (VRO)?

In Western Australia, you can obtain a VRO through an application to the Magistrates Court.

In order to obtain a VRO, you will be required to give the Court verbal evidence or a written affidavit, which is a written statement confirmed by oath or affirmation. The respondent to the VRO application (the person you are seeking protection against) can either consent to it or lodge an objection.

There will be a hearing if the respondent lodges an objection, which you will be required to attend. The Court will then decide on whether or not to serve a Final Violence Restraining Order, and if so, the conditions of the order.

If you require an interpreter due to language difficulties, the Court can appoint one for you free of charge.

What is a Misconduct Restraining Order (MRO)?

A Misconduct Restraining Order (MRO) is an order made by the Court to stop a person from behaving in an intimidating or offensive way towards you. This can include stopping a person who is causing damage to your property or acting in a way that is breaching the peace. However, unlike a VRO, a MRO does not apply to someone you are in a family or domestic relationship with.

While an application for a MRO is similar to that of a VRO, an MRO is considered a lessor order. A MRO may be in place for up to one (1) year.

Who can apply for a Restraining Order?

You can apply for a restraining order if you are seeking protection against a person. If you are over the age of 18, you can apply to the Magistrates Court for a restraining order. If you are under the age of 18, a parent, guardian or an adult can apply on your behalf.

What can Tang Law do?

At Tang Law, we know that this may be a difficult and troubling time for you, and we want to make it as simple and easy as we can for you.

We will be with you, every step of the way from your application to the Court, through to getting the restraining order. We can provide legal advice on the best way to approach the situation and how your application for a restraining order can be successfully made.

Please feel free to contact our solicitors today.

ABOUT THE WRITER

Kelvin Tang has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing family law advice to clients, making divorce applications and applying for Consent Order. Kelvin is able to offer his clients clear and practical advice in relation to children’s disputes, property settlements between married and de-facto couples, spousal maintenance and child support.

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