Bankrupt Estates - Craddock Murray Nuemann Lawyers Sydney

Bankrupt Estates
Article Related Articles Related Services Publish Date: May 02, 2010 The most popular warning of wills and estates law is to always have a will. It appears that only two options are available: intestate or testate. But even having a valid will can bring about a new option in dealing with an estate if a deceased had more debts than assets, it is necessary that the estate is treated differently than from a normal administration by virtue of the Probate and Administration Act 1898 (NSW). Circumstances of Insolvency Generally, if a deceased had more debts than assets, the estate will be treated differently than from a typical administration. This is especially true where the deceased has property out of which some of the debts could be paid. There are certain ways in which a bankrupt estate may be administered: Trustee in Bankruptcy The estate may be made bankrupt in the same way as a living debtor is made bankrupt. The estate is then administered by an Official Trustee in Bankruptcy or other appointed trustee, for example a liquidator. The appointed trustee replaces the bankrupt proprietor. Generally, the executor or administrator does not play any part of the administration of the estate if conducted by a trustee. Executors The executor may also administer the estate by following the provisions of the Probate and Administration Act 1898. Creditors If the estate is made bankrupt, this may improve the position of an unsecured creditor against the estate because the recovery of any preferential payments may increase the size of the estate. Creditors will have to wait until the assets of the estate are available to the executor or administrator (after the grant of probate or letters of administration) before they receive payment. Secured creditors have special rights over goods or land belonging to the debtor and are paid before unsecure creditors. For example, a bank with a mortgage over property will be paid out before. Funeral costs are an estate debt that is entitled to be paid out [see below preserving assets]. The person who orders the funeral is responsible for paying the account but is entitled to reimbursement from the estate ahead of other creditors. Preserving Assets Another possible scenario for a bankrupt estate is preserving the proceeds of the deceased's assets from the payment of outstanding debts. Unless an expressed contrary intention is set out in the deceased's will, the proceeds for any life insurance policy are not to be used for payment of estate debts except for funeral or testamentary expenses (the cost of administering a will). It may be distributed by the executor according to the will or the intestacy rules found in s 205 of the Life Insurance Act 1995 (Cth). Superannuation benefits under some government funds are protected by legislation and the protection cannot be revoked by a will. Legal Action If the value of the estate is not sufficient to pay off debts, the debts will die with the person unless they were held jointly with someone (for example, a mortgage on a property) or guaranteed by someone else. In these cases, the debts will automatically pass to the surviving co-owner or guarantor. Wills and estates law is very complicated. Do not rest on your laurels thinking just because you have a valid will, it absolves all problems after death. It is highly recommended to speak with a legal professional on all options, present circumstances and possible future scenarios that could affect your estate after death. Back Bankrupt Estates The most popular warning of wills and estates law is to always have a will. It appears that only two options are available: intestate or testate. But even having a valid will can bring about a new option in dealing with an estate if a deceased had more debts than assets, it is necessary that the estate is treated differently than from a normal administration by virtue of the Probate and Administration Act 1898 (NSW). But he's not capable of Making a Will! One of the essential requirements for making a will is that the testator - the will-maker - has the mental capacity to do so, that they know what they are doing. The same requirement exists for revoking a will, and giving someone an enduring power of attorney does not give the attorney the power to make a will. Can a person create a trust for the maintenance of their pets? The bond between a pet and an owner can sometimes be so strong, that some people have actually named their pets as beneficiaries after their passing. Many of us have probably read or heard stories someone leaving instructions in their will for the maintenance of their pets, and some of us may have even guffawed at such a practice. However, the fact remains, that many people are rather quite attached to the pets and animals that they own, and there may even be a few readers who are wondering if gifts for maintenance can be made to their own animals. Does Australian law actually allow an animal to become a beneficiary? Can I bequeath my heart? Can I write my own will? Craddock Murray Neumann Lawyers Can You Disinherit Your Children? Dominic Wilson Is it is possible to disinherit your children? Some will makers believe it is or should be. Can you prevent a Family Provisions Act claim by careful will drafting? Dominic Wilson The Family Provision Act (1982)(FPA) restricts that freedom to make a will by allowing classes of people, defined in the FPA as “eligible persons”, to make a claim if those persons consider they have been left with inadequate provision for their proper maintenance, education and advancement in life. Capital Gains Tax Considerations for Estates The taxation of estates can be quite complex depending upon the assets held by the deceased. For complex estates, it is important for the executor to have an understanding of relevant taxation principles. An executor’s choices when administering an estate can have a significant effect on the amount of tax paid and who pays the tax. Capital Gains Tax Considerations for Estates The taxation of estates can be quite complex depending upon the assets held by the deceased. For complex estates, it is important for the executor to have an understanding of relevant taxation principles. An executor’s choices when administering an estate can have a significant effect on the amount of tax paid and who pays the tax. Challenging your parent’s will if they have left a larger portion of their estate to charity than to you. Some of the world’s super rich such as Bill Gates and Warren Buffet have famously left the bulk of their estate to charity and their children only a small fraction of their fortunes. Can you safely leave the majority of your estate to charity? Can you challenge your parent’s will if they have left a larger portion of their estate to charity than to you? Changes to the Intestacy Laws in NSW Dominic Wilson The Succession Amendment (Intestacy) Bill 2009 (“the Bill”) was assented on 9 June 2009. It will come into effect from early next year 2010. The laws will change how estates are distributed if the deceased die intestate, i.e. without a valid will. A person who dies without leaving a valid Will is referred to as “the intestate”. Coercion in making a will The case of Wingrove v Wingrove (1885) is the authority for the proposition that a testamentary disposition does not have a testator’s knowledge and approval if the testator was coerced into making a bequest. COMMENCING FAMILY PROVISION ACT PROCEEDINGS If the deceased died after 1 March 2009, proceedings for a family provision orders are commenced pursuant to the Succession Act 2009. The Family Provision Act 1982 was replaced by the Succession Act 2009 on 1 March 2009. A claimant has 12 months from the date of death in which to commence proceedings for a family provision order. Comparison Between a Simple Will & Testamentary Trust Craddock Murray Neumann Lawyers Court Made Wills Dominic Wilson In a recent judgment of the Supreme Court in Re Fenwick: Application of JR Fenwick & Re “Charles” [2009] NSW SC530 the Court considered and applied for the first time new provisions of the Succession Act 2006 (NSW), which confer power on the Court to authorise the Registrar to make, alter or revoke a will on behalf of a person who lacks testamentary capacity. Creating a Living Will A Living Will is a document created to clarify intent with regard to future health concerns and treatment. The document itself is legitimised by setting up specific medical Enduring Power of Attorney while a person is in sound mind and able to do. This Power of Attorney may be held with a family member or other trusted person who is given the rights to make decisions regarding health and treatment when the person is no longer able to do so. Disputed Estates Craddock Murray Neumann Lawyers Useful information on the topic of Disputed Estates. Disputed Wills Craddock Murray Neumann Lawyers If you were left out of the Will or not properly provided for you may have a claim under the Family Provisions Act 1982 (FPA). DISTRIBUTING THE ESTATE: protection against Family Provision Act claims A claim for an order from a deceased person’s estate for a family provision can be made up to 12 months from the date of death. DIY will kits: will they hold up? Most of us have seen will kits in a newsagency, or seen them advertised on-line or in the press. Buying one is certainly cheaper than seeing your solicitor to make one, but do they work? Do I Need a Power of Attorney? Powers of Attorney are documents that have been around for hundreds of years. Put simply, a Power of Attorney is a document whereby one person – the "donor" – gives another – the "attorney" – the power to sign legal documents on their behalf. They can be given by companies or individuals. For example, banks will sometimes appoint senior staff members to sign various specified documents on the bank’s behalf. Estate Planning Strategies for Combined Families If you have a combined or blended family, you may wish to consult with a lawyer to consider some estate planning strategies suited to your needs. When people enter into a second relationship, they often have separate assets. They may wish to provide some or all of those assets to their own children, rather than to their new partner and his or her children. There are laws of family provision that must be taken into account when estate planning in these circumstances. Euthanasia, Murder and Inheritance: can those who bring about the death inherit from the estate of the deceased? As Australia’s population rapidly ages euthanasia is becoming an ever more pressing issue. Some people who advocate euthanasia are already at a stage in their illness where they require assistance to take the own lives. This puts any person assisting to bring about the death who is also a beneficiary of the estate in a difficult legal position. Not only do they risk criminal prosecution but it can affect their position as a beneficiary of the estate of the person wishing to die. Family Provision Act 1982 Craddock Murray Neumann Lawyers Discussion Notes. FAMILY PROVISION ACT CLAIMS – Able bodied adult children and Prevailing Community Standards Dominic Wilson A recent decision in the New South Wales Court of Appeal analysed what is ‘proper maintenance education and advancement in life’ for able bodied adult children – SMILEK V PUBLIC TRUSTEE [2008] NSWCA 190. Family Provision Act Claims – Prescribed Transactions and Notional Estate Dominic Wilson The Family Provision Act (1982)(FPA) allows the court to designate property as “notional estate” and make Orders with respect to notional estate in order to satisfy an order for provision in claims by an eligible person. He didn't leave a will. What happens now Most of us know what a will is, and if we think about it (which often we don't) we know we should have one. Many Australians, however, do not have one, and this can cause extra expense, delays and complications when they die. He didn't leave me anything Craddock Murray Neumann Lawyers When someone dies, the terms of their will can cause jealousy, distress or upset in a surprising number of cases. What can someone do if they think that they have not been treated fairly in a will? How can I provide for financially reckless beneficiaries? Craddock Murray Neumann Lawyers How superannuation death benefits are dealt with upon the death of a member All working Australians will be members of a superannuation fund, and with that in mind, it’s no surprise that according to the Australian Prudential Regulation Authority, the total amount of superannuation assets at the end of the 2010 financial year was $1.23 trillion. Many individuals will have large superannuation benefits waiting to be cashed upon retirement, however, some people will sadly pass away before they are able to make a claim on their benefit. So the question will arise of how will a person’s superannuation entitlements be dealt with upon their passing, is a natural line of inquiry. If I die without a will, who gets my assets? Craddock Murray Neumann Lawyers If the deceased has promised to look after someone; breach of promise/contract and family provision claims If someone promises to take care of you financially and then they die, what do you do? In Event of Death Who Will Watch Your Children Who will watch your children in the event of your death? If you have children younger than 18 years, this is a very important consideration. In your will, you may nominate one or more people to be your child's guardian in the event of your death. This may help to avoid any future disputes between family members by making your intentions clear. The question of 'who' is very important to any parent when nominating a guardian for their children, as well as what 'will' happen. Inheritances and Gifts in Family Law, how are they treated? Consider this example: John and Jill have been married for 10 years and have recently separated. Around 2 years ago Jill’s father died and Jill received an inheritance of $100,000. These monies were deposited into a joint bank account and have been used by the parties to assist in the purchase of a property. Now that the relationship has broken down what becomes of Jill’s inheritance? Is a will valid if a lawyer doesn’t sign it? In September Noreen handed Ngaire an envelope and said, “This is my will. You don’t need to read it now. Just hold on to it until I die.” Ngaire did not open the envelope but put it safely away in her top draw. Make an Executive Decision & Appoint an Executor Thinking about making a will can be overwhelming. Part and parcel of writing a will is appointing an executor. Many people may not understand the responsibilities of an executor – whether it is appointing one or being named as one. Mental or Testamentary Capacity To Make a Will Age, even great age, does not prevent a person having testamentary capacity to make or change their will. It is not even necessary that the willmaker be able to read or write, as long as appropriate steps are taken to make sure that they understand the will. Missing Wills and Court Proceedures Most of us realise that it is a smart step to have an appropriate will in place, but its important to make sure that your next of kin knows where the will is kept. If a will cannot be located, the estate will be dealt with as an intestate estate and your assets will be distributed according to the law and not necessarily as you would have wanted. The beneficiaries will also ultimately bear higher expenses. Missing Wills and Court Proceedures Most of us realise that it is a smart step to have an appropriate will in place, but its important to make sure that your next of kin knows where the will is kept. If a will cannot be located, the estate will be dealt with as an intestate estate and your assets will be distributed according to the law and not necessarily as you would have wanted. The beneficiaries will also ultimately bear higher expenses. Mum has left our family home to her new husband – what can we do? Before Jim and Genevieve married they decided to execute mutual wills. A mutual will is where each individual has a separate will but they confer reciprocal benefits on each other. Jim’s will stated that he would leave all of his estate to Genevieve and if she died the estate would be divided equally between their two children Julia and Jonty. Likewise Genevieve’s will left everything to Jim and to their two children if he died. Obtaining Access to the Deceased’s Will Dominic Wilson Getting to see the will of a deceased can sometimes be a problem. Section 54 of The Succession Act 2006 is designed to overcome that problem. Obtaining Probate When a person dies leaving a valid will, their estate is distributed according to the terms of their will. Each state has unique legislation setting out the rules for administering the deceased’s estate. Organise Organ Donation A person can donate their organs after their death. It is advisable to think about whether you would like to donate your organs when drafting your will and informing your relatives. Security for Costs Craddock Murray Neumann Lawyers The general rule is that everyone should be able to enforce their rights in the Courts – poverty should be no bar to justice. Should I appoint a power of attorney? Craddock Murray Neumann Lawyers Should I appoint an enduring guardian? Craddock Murray Neumann Lawyers Should I Appoint an Enduring Guardian? People usually hear about appointing a guardian in one of three ways: their solicitor may talk about it when discussing a will, a financial advisor may ask if there is one in place, or a retirement village or hospice may require a prospective resident to have one. The Basics of Estate Planning Estate planning is important. One of the essential purposes of estate planning is to ensure that your beneficiaries receive the maximum possible benefit from your estate. This involves determining the most financially efficient and tax effective way to distribute your estate on death. The Duties and Responsibilites of an Executor When a person passes away and leaves a valid will, it is up to the executor to make the funeral arrangements, obtain a grant of probate, pay off any debts to creditors and administer the estate of the will-maker according to their wishes. Needless to say, the responsibilities and duties of the executor are quite significant, so it is important that they carry out their role appropriately. The Guardianship Tribunal More and more of us today are doing the wise thing, and appointing attorneys and guardians by Enduring Powers of Attorney and Guardianship Appointments. The importance of using the right words when drafting a will The words used in wills – much like other legal documents – need to be chosen carefully, because terms and phrases can easily be misconstrued and can have multiple meanings. As the person drafting a will, you may know what you meant in the will, but for others who are trying to decipher your wishes, they might have a bit more trouble. Keep in mind that in most instances, an executor and any beneficiaries will only be privy to the information in your will only after you have passed away. So needless to say, you won’t be able to clarify your wishes to the parties involved if any misunderstandings do arise. In order to ensure that your executor is able to administer your property and estate in line with your wishes, it’s important to bear in mind that you should always choose your words carefully when drafting a will. The Will fundamentals Craddock Murray Neumann Lawyers Most of the disputes about wills fall into one or the other of two categories. These are either that someone has not been provided for adequately in the will, or that some formality has not been complied with. There's no death duty nowadays, is there? Craddock Murray Neumann Lawyers Premier Jo Bjelke-Petersen of Queensland has been a rather controversial figure in Australian political history, but one of the lesser known facts about him is that he was responsible for the end of death and estate duties in Australia. For many years both the individual states and the Commonwealth imposed death duties, known as estate duty for the Commonwealth version. Premier Jo abolished death duty in Queensland, and the resultant rush of investment into Queensland led to his lead being followed throughout Australia, so there are no death duties as such in our country. UNSIGNED WILL; ORIGINAL COPY OF PREVIOUS SIGNED WILL LOST We acted for the son of the first marriage of the deceased. The second wife of the deceased sought to Probate an unsigned Will. What can a will be written on? In Estate of Slavinskyj (1989), testamentary dispositions written on the back of a packet of cornflakes were held to be valid. What is a will? Craddock Murray Neumann Lawyers What is the role of an Executor? Craddock Murray Neumann Lawyers What on earth does Wills and Estates mean One of the most common complaints about lawyers and the law is the language used, which has even produced its own name, “legalese”. Why is that? What you need to know to make a Will Making a will is probably the last thing on your mind right now. Even as people age and raise a family, the idea that our mortality is potentialy a problem is understandably far away from consideration. However, just as people strive to provide for their family as best they can, it is important to take some time to prepare a plan for the possiility that you may no longer be around for your loved ones. What you need to know to make a Will Making a will is probably the last thing on your mind right now. Even as people age and raise a family, the idea that our mortality is potentialy a problem is understandably far away from consideration. However, just as people strive to provide for their family as best they can, it is important to take some time to prepare a plan for the possiility that you may no longer be around for your loved ones. When should a will be changed? Drafting a will can be a long, complicated process. Once it has been witnessed and filed away for safekeeping, it can be tempting to rarely think about it again. But keeping your will up to date is extremely important. Wills are often made years before a person dies, and there may be significant changes to an estate between when the will was written and when the will is executed. When should I make a will? Craddock Murray Neumann Lawyers When someone dies without a will - applications for letters of administration Lucy’s father died some years ago and her mother, Esther died late last year. Lucy has an older sister who lives overseas and a younger brother. After searching Esther’s house high and low and contacting Esther’s lawyers, Lucy was unable to find any will made by her mother. Esther had a house in Petersham, two bank accounts, a superannuation fund, a car and various personal effects. When Esther died she had a modest credit card debt as well as some outstanding utility bills. When you can get a court ordered DNA test? Under s26 of the Status of Children Act 1996 a party to proceedings may apply to the Supreme Court for an order requiring a parentage testing procedure to be carried out for the purpose of obtaining information to assist in determining the parentage of the child. Where there is NOT a Will, There is a Way Around half of all Australians do not have a will, so they will not have a say in what happens to their estate when they die! Surprising, but true. Who will look after your pets? For many, the processes of estate planning involves thinking about their family and loved ones - trying to take their circumstances into account and considering what measures they would like to take to promote their future happiness. Why is it so important to keep your Will updated? A recent decision from the Supreme Court of New South Wales has highlighted the need to keep your Will updated. In the NSW Trustee and Guardian v Ritchie [2011] the NSW Trustee applied to the Court for orders in relation to the administration of the Estate. Why you Need a Will Craddock Murray Neumann Lawyers Information on the Importance of having a Will. Witnessing a will A prominent Cricket fan wishes to make a will, but doesn’t trust anyone associated with the consortium for which he barracks to witness it for him. 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