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Estate Planning – Residential Aged Care Agreement

Residential Aged Care Agreements

Residential Aged Care Agreements contain mandatory provisions to the requirements of relevant legislation including Retirement Village legislation. Most agreements do not however give “ownership rights” as one has with a house purchase. There are also necessarily provisions dealing with issues that could arise the if there are future health issues making it unsustainable for a person to remain in a particular type of accommodation. These have implications for estate planning

Legislation has been found to restrict the right of village operators the to make some charges of a capital nature..

In the case of Regis Aged Care Pty Ltd v Secretary, Department of Health [2018] FCA117, Regis, a Retirement Village residence agreement included a charge for  “asset replacement”to fund maintenance, reinstatement and building of infrastructure in the retirement village.

The Department of Health contended this was not lawful under the Aged Care Act. Regis sought a declaration from the Court to overcome any uncertainty. The Court held that the charge was not lawful as it did not specifically relate to the cost of providing accommodation to the residents in question.

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Literary Executor

Appointment of a Literary Executor

The appointment of an executor within a Will can be assigned to a specific property or a certain type of property. However, the specified executor must fall within the meaning of ‘executor’ under the Probate and Administration Act 1898(the Act), section 41 to be granted probate which states:

“41 The Court may, if it thinks fit, grant probate to one or more of the executors named in any will, reserving leave to the other or others who have not renounced to come in and apply for probate at some future date.”

This is evident in the NSW Supreme Court case The Estate of Nicholas Paul Enright [2017]. Nicholas Enright within his Will appointed two executor’s of his estate and a third ‘Literary Executor’. It was brought to the Court to determine whether the appointment of the third executor fell within the meaning of executor under section 41 of the Act as they weren’t granted probate alongside the other executors, and if so, whether the property was inclusive of “the copyright and other intellectual property in the deceased’s works”. It was noted that the term ‘Literary Executor’ had appeared in other cases.
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Executors of Estates

Traps and liability issues for Executors of Estates

You are appointed as Executor of an Estate. You appreciate the confidence expressed in you, and you are more than happy to help your relative or friend.

It can’t be that hard, can it?

What is often not appreciated is the responsibility that comes with being the Executor of an estate and that an Executor can be personally liable if the legal requirements are not performed properly.

The basic requirements are:

Executor’s role. An Executor is required to uphold the deceased’s Will and put into effect the deceased’s wishes as expressed in the will. This usually requires the Executor to obtain a Grant of Probate from the Supreme Court. The Grant proves to the rest of the world the Executors power to deal with the deceased’s assets
An Executor has a strict duty to properly and effectively administer the deceased’s Estate. An Executor can be personally liable for a breach of that duty. Executors must act impartially and prudently.
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Blended Families and Mutual Wills

Blended families (“Brady Bunch families”) create their own challenges in estate planning. In particular, how can both sets of children and both sides of the family be protected?

One method is the use of Mutual Wills. Mutual Wills are based on the Willmakers signing a contract regarding the contents of a Will.

A Will is of its nature revocable and can be changed. The main feature of Mutual Wills is that there is an express or implied contract not to revoke a Will after the death or incapacity of one of the contracting parties.

Typically a Mutual Will Contract will include covenants as to the agreed terms of the Wills of each party which are not to be changed.

Advantages of Mutual Wills

One advantage is that a Mutual Will gives the survivor of the contracting parties more freedom and flexibility to deal with assets during their lifetime while still reflecting the joint wishes of the Willmakers at the time they make their Wills. This is contrasted with limitations imposed by way of alternatives such as life estates.
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Estate Planning and Superannuation

ESTATE PLANNING and SUPERANNUATION – The importance of considering Superannuation as part of your overall Estate Planning

Estate Planning Decision: In D17-18/120 (2018) SCTA 24 the Superannuation Complaints Tribunal (“Tribunal”) had to consider an application by the Deceased three minor children for payment of the death benefit and whether the binding death benefit could be overruled.

Facts

  • The Deceased had two adult children with his first wife and three minor children with his second wife.
  • After being diagnosed with a terminal illness the Deceased signed a new Will and at the direction of his solicitor, a Binding Death Benefit Nomination (“BDBN”) ( six months prior to his death.)
  • Both the Will and BNBN were in favour of his two adult children in equal parts.
  • The evidence supplied was that the Deceased had not been in contact with his second wife for many years; however had a strong and close relationship with his adult children.
  • The second wife sought that the death benefit be split equally among all children.  This application was rejected by the Trustee.

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Estate Planning – Extinct Institutions in a Will

Estate Planning – Extinct Institutions and Charitable Purpose

In Hicks v Mater Misericordiae Ltd [2017] QSC 38, the Court had to consider whether a testator’s charitable gift in her will had failed its charitable purpose because of the institution’s closure after her death.

Facts

  • The testator left the residue of her estate to the ‘Medical Superintendent for the time being of the Mater Children’s Hospital in Brisbane for the purchase of medical equipment for the treatment of seriously ill children’
  • However after the testator’s death and before the distribution of her estate, the Mater Children’s Hospital’s public hospital functions were taken over by another children’s hospital

Decision

  • The court then had to consider whether the charitable purpose of this gift had failed because of the closure of the Mater Children’s hospital
  • However, the court established that the evidence allowed the residue of the testator’s estate to be applied as near as possible (cy-pres) to the objects of the defunct institution

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Contested Wills – Death Bed Wills

Capacity and Death Bed Wills
The case of McNamara v Nagel [2017] NSWSC 91 considered the issue of testator capacity in contested wills made upon the individual’s death bed.

Facts:

  • The contested will was made 15 days before the then 87 year old testator’s death
  • There was no evidence that the testator suffered from delusions, dementia or any other cognitive deficit before her death. However, she did have momentary periods of fever and delirium during the time in which the will was executed
  • The new will included significant changes from the testator’s previous will
  • It was argued that there was undue influence on the part of the principal beneficiary, as they were present when then testator gave instructions for the will

Despite there being evidence from the solicitor and another witness and conflicting expert evidence as to the testator’s capacity, the attack on the will failed and the testator was found to have capacity.

If you would like more information or advice in relation to a will dispute, contested wills or testamentary capacity you should consult a member of our Wills and Estate Planning Team.
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Difference between joint tenancy and tenant in common important to consider in estate planning

The difference between a joint tenancy and tenant in common interest can be crucial when preparing your Will and to be considered as part of your overall estate plan.  It is important to understand the difference of the two.

A tenant in common holder can leave his or her interest by Will and a joint tenant cannot. This is because when the first of the joint tenant dies their interest passes to the surviving joint tenant.

For example for most married couples it is common that they have purchased property together as joint tenants.  If via each of their respective Will they are happy to leave that property to the survivor then there is usually no need to consider changing the joint tenancy.

If you are unsure as to how you hold your property or need specific estate planning advice then you should speak to one of our Wills & Estate Planning lawyers.

Questions/Assistance

If you would like more information about this article or if you would like any assistance in other estate planning area please feel free to speak with or email one of our specialist estate planning lawyers on (02) 9635 7966 or info@matthewsfolbigg.com.au
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