When it comes to estate planning, don't forget your medical and health care preferences
While many of us have a Will and a funeral plan - both of which come into effect after we die, less consideration is given to our pre-death.
An Advance Care Directive allows individuals to set out in detail their wishes regarding future health care in the event they are unable to communicate or make decisions for themselves. This can include decisions regarding life-sustaining treatment, such as mechanical ventilation, tube feeding, and cardiopulmonary resuscitation (CPR). It can also include lifestyle decisions (such as preferred living arrangements).
Advance Care Directives are particularly important for individuals with chronic or terminal illnesses, as well as those who have specific cultural or religious beliefs that may affect their medical care. By documenting their wishes in an Advance Care Directive, individuals can ensure that their appointed Substitute Decision Maker (often a loved one), can make informed decisions in accordance with their wishes, in consultation with health care providers. Having medical and health care preferences documented also provides peace of mind and clarity for other family members, friends, and carers during what is often a traumatic and emotional time for them.
It is important to note that an Advance Care Directive is a legally binding document and should be reviewed periodically to ensure it accurately reflects the individual's wishes.
Advance Care Directives have replaced Enduring Powers of Guardianship, Medical Powers of Attorney, and Anticipatory Directions. Whilst these documents may still be valid, once again, we recommend that if you have one, that you review it and consider updating it.
A Scammell & Co Wills & Estates lawyer can provide advice in relation to your wishes and assist with the preparation of a legally valid and binding Advance Care Directive.
For further information on Estate Planning please follow the link HERE
*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.
A Family Provision Claim may resolve a dispute over a Will or deceased estate
Shock, hurt and anger are some of the emotions that may be felt by someone whose only remaining parent recently died, and the child of the deceased learns that they have been deliberately left out of their parent's Will. If this happens, there may be a course of action available to you. Here's what's involved.
If someone decides that they do not wish to leave any part of their estate to one of their children or dependents, then they are entitled to stipulate this in their Will. However, as a child (amongst other eligible persons) of the deceased, if you believe they have failed to make adequate provision for your proper maintenance, education or advancement in life, you may be eligible to make a family provision claim.
The first steps to making a family provision claim are:
- To contact the executor and/or the solicitor acting for the estate (if there is one) to try and obtain a copy of the Will; and
- To start gathering evidence about the estate, your relationship with the deceased and your financial circumstances.
It is important to act quickly as there is a risk that the deceased’s estate could be distributed to someone else and strict time limits apply in which to contest a Will. In accordance with the Inheritance (Family Provision Act 1972 (SA), an application must be made within 6 months after the grant of probate or letters of administration.
An initial consultation with a Scammell & Co Wills and Estates lawyer will provide the opportunity to discuss the nature of your dispute or grievance; identify and assess the size and nature of the deceased’s estate (and any competing claims). They can then advise whether you have grounds to bring a claim against the estate, and the best way to resolve your dispute.
If you have a genuine claim, they will prepare the necessary court documents including evidence confirming your relationship with the deceased, your financial circumstances, and your current and future needs. These will be filed on your behalf to formally commence legal proceedings.
Your lawyer will conduct your case in court in a way which ensures that the dispute is finalised as quickly as possible with a minimum of costs and fuss. In this regard, it is generally compulsory for all matters to go to mediation before significant legal costs are incurred.
Scammell & Co understands that the loss of a loved one is an emotional and stressful time, made more difficult when you have been left out of your parent’s Will, or your parent’s estate is to be distributed unfairly. Therefore, our lawyers will handle your claim with compassion, understanding and respect, whilst ensuring you get your fair entitlements.
For further information about our contested Wills and Estates services click here.
*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.
Tax obligations relating to superannuation death benefits should be considered when making your nominations
When it comes to super death benefits there are two overarching areas of law which affect beneficiaries – superannuation law which sets out who a death benefit is payable to, and taxation law which sets out how the death benefit will be taxed.
Your super fund can pay a death benefit to two types of beneficiary – a dependant or non-dependant.
Under superannuation law a dependant is someone who, at the time of your death, was your spouse or de facto partner; one of your children (any age); or some other person who you were in a financial, domestic, or personal, interdependency relationship with.
Under taxation law the definition of dependant is broader. Someone is considered a tax dependant if, at the time of your death, they were your current or former spouse or de facto partner (of any sex); any child aged under 18; someone who was in an interdependency relationship with you; or any other person who was dependent on you.
A dependant can choose whether they receive a super death benefit as a lump sum or a pension. Excluding a child with a permanent disability, the income stream option must change to a lump sum on or before the date a child turns 25 years old.
As tax has already been paid on super every time contributions were made, both the taxed and untaxed components of your death benefit are paid to a dependant beneficiary without further tax payable.
If the death benefit is taken as an account-based income stream, a dependant beneficiary aged 60+ will be required to pay tax at marginal rates (with a tax offset of 10%) on the taxable component. If aged under 60, the taxed element attracts tax at marginal rates (with a tax-offset of 15%).
A non-dependant can only receive a lump sum benefit which will be taxed at the maximum rate of 15% for the taxed element and 30% for the untaxed element, plus the Medicare levy.
Given the complexity of both superannuation and tax laws, independent financial and legal advice is highly recommended. Scammell & Co can assist you with your estate planning requirements including death benefit nominations.
Click here for general information on the extensive range of estate planning services offered by Scammell & Co.
*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.
Making a provision in your Will to protect a vulnerable member of your family requires special consideration
Making provision in your Will for a person who is unable to adequately or responsibly manage their financial affairs requires special consideration. Vulnerable beneficiaries may include those whom:
- Have a severe disability;
- Suffer from a mental incapacity;
- Have an addiction;
- Are bankrupt (or are at risk of becoming bankrupt);
- Are too young (or too old) to manage their finances independently;
- Are spendthrifts or easily influenced by others; or
- Are at risk of a marriage breakdown.
Rather than providing a vulnerable loved one with access to their inheritance and risk losing those assets, it may be better to put their share in your estate in a protective trust for them.
A protective trust gives you the ability to ensure that your vulnerable beneficiary will receive their inheritance, without having to manage money or property themselves. Instead, their inheritance will be transferred to a trust. In your Will you appoint an independent person or entity that you wish to be the Trustee and set out the rules that you want the Trustee to follow. It is the Trustee’s role and responsibility to follow these rules, to properly manage and maintain the assets and to sustainably distribute income to the beneficiary. Therefore, the risk of your vulnerable beneficiary mismanaging their inheritance is greatly reduced.
The income and assets of the trust can be used to purchase a home, or other investments for the beneficiary and pay for approved purposes as specified in your Will, such as the beneficiary’s living, medical or education expenses.
The beneficiaries of the protective trust can also include the vulnerable beneficiary’s family so that the trust can provide for them as well.
As with any estate planning, it is important to seek legal advice from an experienced lawyer so that the terms of the protective trust address your concerns and requirements.
For further information on Scammell & Co.'s Wills and Estate Planning services please click here.
*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.