Not all work and no play

Posted by: Karen Thompson

It has not been all work and no play at Anderssens with Scott Thompson, Managing Director rowing the 8.6km course in a mixed eight at this year’s Head of the Yarra in Melbourne. Enjoying a second place in his esteemed age group from the Sunshine Coast Rowing Club.

As well earlier in the month, Richard Thompson competed in an Ironman Triathlon held at Busselton, Western Australia. Richard finished the 3.8km swim, 180km bike, 42km run in 9:01 and in doing so he qualified for the famous Hawaiian Ironman World Championships next October. 

We are looking forward to putting some of our fitness goals on hold over the relaxing and festive Christmas season and getting back into them in the New Year!

Deadline for Non-Residents to Register their Australian Agricultural Holdings on the New Agricultural Land Register

Posted by: Tony Allen

If you are a non-resident of Australia and you own agricultural land in Australia then you need to ensure that your agricultural land holdings have been registered on the new Australian Agricultural Land Register. [Click here for register]

There are recently announced new deadlines to register your interests. Penalties may apply to those who fail to register by the extended deadlines.

 All foreign individuals, companies and trustees non-residents who:

1. have held agricultural land on or after 1 July 2015 and before 1 February 2016, are required to register their interests by 29 February 2016; and
2. start to hold agricultural land on or after 1 February 2016 are required to register their interests before the end of 30 days after you start to hold the land.

If you:

1. are uncertain if under Australian law the Australian Taxation Office will treat you as a non-resident for agricultural land holding purposes; or
2. need advice or assistance concerning your Australian agricultural holdings or registration of your interests on the new Australian Agricultural Land Register,

then please call me to discuss - 07 3234 3112.

Retirement and Real Estate Planning Bulletin repurposing permission

Posted by: Richard Thompson

An informative article regarding the Munro v Munro case written by our Richard Thompson, together with Richard Williams of Counsel. To read article Click Here.

30 November 2015 deadline for foreign residents to disclose residential real estate purchases

Posted by: Tony Allen

The Australian Treasury is actively investigating 532 cases of possible breaches of the Government’s foreign investment rules. Treasury has recently forced various foreign owners to sell a further seven illegally held residential properties located in Victoria, New South Wales and Queensland. Since it took office in 2013, the government has forced foreign nationals to sell 19 properties.

The Treasurer has recently reminded foreign investors who have purchased residential properties without notifying the Foreign Investment Review Board that they have until 30 November 2015 to disclose those transactions without penalty. [Click here to read more]

If you are a foreign national and are uncertain as to your obligations in respect of your purchase of residential property then please call me to discuss.

Care needs to be taken when varying Trust Deeds

Posted by: Tony Allen

A recent case [MERCANTI -v- MERCANTI [2015] WASC 297], where one trust deed amendment was effective but another was found by the court not to be a valid amendment, demonstrates that good advice and drafting is needed to ensure valid and effective amendments to trust deeds.

In this case the person empowered by each of two different trust deeds to amend the trust deed purported to exercise those powers to change the person named as the ‘appointor’ in each of the trust deeds. The person removed from the ‘appointor’ position challenged his removal and the court found that the wording of the relevant clauses was critical.   In one case the court found that the power was sufficiently wide to authorise the change but not in the other. If your Trust deeds need amending, (and many do) then please call me to discuss.

Anderssen Lawyers' Successful October Seminar on SMSF Binding Nominations

Posted by: Richard Thompson

Richard Thompson and Kylie Wilson recently hosted a successful seminar entitled "Should you be drafting your SMSF Binding Nominations?".

It was a very popular seminar primarily attended by those in the financial planning and accounting industries. The attendees thoroughly enjoyed the presentation and further discussion surrounding the Munro v Munro case and took full advantage of having Richard Thompson as a presenter, being the lead lawyer on behalf of the Trustee in Munro. The attendees also enjoyed a presentation from Richard Williams, Counsel for the successful Trustee in the Munro case, discussing what was submitted in Court by both parties.

The seminar also discussed the possible ramifications of advisers and accountants preparing and settling SMSF Trust Deeds and Binding Nominations and the possible consequences of this if such documents were negligently drafted. Discussions were also had as to the attendees' professional indemnity insurer would cover them in preparing these legal documents.

This presentation was also timely since the announcement from Axis that it will wind down the Australian Retail Insurance Operations Axis Specialty Australia. The fact that Axis Australia has ceased "on new and renewal insurances of both accountants and financial planners from 8 October 2015" goes towards illustrating the difficulties that professional indemnity insurers are finding when it comes to the grey area of insuring accountants and financial planners who delve into the creation of legal documents such as SMSF Trust Deeds and/or the binding nominations.

As suggested at the seminar, it is imperative that all advisers and accountants review the public disclosure statement of their insurer to determine whether they would be covered in such an instance. In addition it is our view that they should be referring the drafting of any deeds and nominations to their solicitor.

The seminar was a true success not only from the content delivered but from the informative and collaborative discussions by all attendees.

Look out for the next seminar presented by Anderssen Lawyers in the near future.

If you wish to discuss the terms of any SMSF Trust Deeds or binding nominations, please do not hesitate to contact Kylie Wilson on 07 3234 3102 or Richard Thompson on 07 3234 3113.

Planning Reform in Queensland

Posted by: Megan Tilbrook

As many of those who work in the industry will know, the Queensland government is planning to bring yet further changes to this area of law with the draft Planning Bill 2015 being released for public consultation in early September this year. Some of the key changes being made to the legislation include changes to chapter 3 regulating development assessment including changes to the types of development and the process for assessing applications.

Further information in relation to the planning reforms can be found at the following website: www.dilgp.qld.gov.au/planning-reform

If you propose to make a submission in relation to the draft bill the closing date for consultation is fast approaching with all submissions to be made by 6pm, 23 October 2015.

As the process progresses we will be providing further details on the changes and the potential impacts they will have in practice.

Is your SMSF Trustee automatically bound by your valid Binding Death Benefit Nomination?

Posted by: Richard Thompson, Litigation lawyer explains with a peculiar case study...

The primary lesson learnt from the Supreme Court of Queensland's judgment of Munro v. Munro is that one must apply legal considerations in determining whether a particular BDBN is validly completed in accordance with the terms of the Deed.

But what happens if the Deed itself contemplates a BDBN but precludes the Trustee from being bound by such document?   

In the following case study, we show how important it is to consider the legal ramifications of the terms of an SMSF Deed well before executing a BDBN.

CASE STUDY

"Mr & Mrs Brown (second marriage) engaged a top tier law firm to draft and execute a Deed of Variation to the Self Managed Superannuation Fund Deed.  

Mrs Brown, who is receiving a pension from the Fund, validly enters into a BDBN nominating her children as the beneficiaries. 

Mrs Brown passes away, leaving Mr Brown as the sole Trustee and in charge of distributing Mrs Brown's superannuation account.  Is Mr Brown required to pay the benefit to Mrs Brown's children?

The Deed of Variation allowed, via Rule 6.4 of the Deed, for a Binding Death Nomination form to be executed and provides, within the deed, the prescriptive form that the Nomination must take.  Mrs Brown, as stated above, had complied with such requirements.

However, Sub- Rule 6.4(e) directs that where a member dies whilst in receipt of a pension, the benefit payable on that member's death will be governed by the appendix to the Trust Deed (not rule 6.4).  Therefore the provisions of the appendix will overide a Binding Death Benefit Nomination prepared in accordance with Rule 6.4 where the relevant member is receiving a pension from the Fund.

The Appendix provides that the Trustee "may" pay a lump sum to a person identified in accordance with Rule 6.4 or pay a reversionary pension to any one or more of the dependants of the deceased member in accordance with the relevant clause.

Accordingly, when read in conjunction with Sub-rule 6.4(e), Mr Brown retained a discretion on the death of Mrs Brown as a pension recipient that could override the Binding Death Benefit Nomination prepared by Mrs Brown in accordance with Rule 6.4 of the trust deed.

Therefore, legally, Mr Brown could use his discretion and not pay Mrs Brown's benefit to her children and decide to pay it to Mrs Brown's dependants, which would include himself.

Whilst the Nomination Form was completed in accordance with the Deed (unlike in Munro), the issue lies in the enforceability of the Nomination, which was obviously not the client's intention when engaging the firm to prepare the Deed.

Left unchanged, this could have had significant adverse consequences for the deceased's children had the nomination not be enforced by the Trustee.

Fortunately, Mr and Mrs Brown attended Anderssen Lawyers, we reviewed the deed, recognised the issue and had the clients sign a further Deed of Amendment to ensure that the nomination will at all times in the future be binding on the Trustee, subject to it being deemed a valid Nomination as is the usual course.

Our view of this provision, when read in conjunction with Sub-rule 6.4(e), is that the Trustee retains a discretion on the death of a pension recipient that could override any Binding Death Benefit Nomination prepared in accordance with Rule 6.4 of the trust deed, even if a BDBN could be validly prepared in accordance with the requirements of that Rule. 

To avoid such an issue for yourself or your clients, contact our Succession / Superannuation Team to allow us to review your Deed or Nomination and provide our position as to whether amendments are required – all free of charge. 

If you have any dispute in relation to a Deed or Nomination, contact our Litigation team for a free, no obligation chat about your situation.

Richard Thompson is an experienced solicitor in the area of Trust Deed disputes and forms part of the Litigation team and Succession/Superannuation team of Anderssen Lawyers.

Richard Thompson, together with team leader Kylie Wilson, will be presenting a seminar this Thursday afternoon entitled "Should you be drafting SMSF Binding Death Nominations?".  There are limited spaces available – to register for this event please click here.

Do we follow the Kiwis? - Property sellers must provide TFN and have a local bank account

Posted by: Tony Allen

In an endeavour to ensure that compliance with taxes on certain property transactions, particularly by non-residents, and to ensure that people buying and selling property for profit will be less likely to avoid paying their fair share of tax, the New Zealand government has introduced new legislation that requires buyers and sellers of New Zealand property to provide their tax identification numbers to the land registry and to have an onshore bank account. It is anticipated that this legislation will become law soon. Click Here for NZ Inland Revenue announcement on this legislation. Although there is an exemption for principal residences that exemption does not apply to offshore persons or trusts.

In light of public concern in Australia as to the impact of foreign investment on property prices in Australia measures such as this may be a salient development of which the Australian government ought to give consideration. 

Invitation for input about the Great Artesian Basin water resource plan

Posted by: Megan Tilbrook

Those of our clients reliant on the Great Artesian Basin may be interested to note that the Queensland Government is currently seeking input on the new plan proposed to manage this vast water source.

Public consultation seminar will be held during October and November with submissions closing 20 November 2015.

Source: Rita's Outback Guide

For those who are interested further information can be found at;

http://statements.qld.gov.au/Statement/2015/9/7/have-your-say-on-the-new-great-artesian-basin-water-resource-plan



Rabobank's Agribusiness Monthly July 2015

Posted by: Kylie Wilson

The Agribusiness Monthly provides timely information and analysis on agricultural conditions, commodity price updates and commentary on the latest sectoral trends and developments.

 

Key highlights:

• Grains & Oilseeds: Recent rain across east coast Australian cropping regions has been beneficial to crop conditions. Sub soil moisture levels have improved in many areas, and prospects of above average production in 2015/16 with late season follow up rain have increased.
• Dairy: Opening prices for southern producers averaged around AUD5.60/kgMS.
• Beef: Strong global demand and possible domestic supply shortages suggest that prices could increase further, however they may temper slightly through winter as the market considers the upcoming season.
• Sheepmeat: Lamb prices continue to follow a similar trend to 2014, with prices well above the five year average.
• Cotton:  Continued forecasts for a tightening of the world cotton balance sheet should see global prices supported through the 2nd half of 2015.

To view the full report, please click here.

E-conveyancing is (almost) here

Posted by: Valerie Chagnon-Couture

I recently attended the Property Exchange Australia (PEXA) launch event for Queensland.  PEXA will revolutionise the way that property transfer settlements take place.  Through PEXA, settlements will take place on an electronic platform and will no longer require that all parties come together in one location to exchange documents and settlement cheques.

The PEXA platform was created in collaboration with representatives from the Land Registry, Banks and Financials Institutions, The Office of State Revenue, Property Lawyers and Conveyancers as well as the Law Council of Australia and the Australian Bankers' Association.  Upon considering the large number of parties involved, it is understandable that the platform has taken some time to be finalised.

PEXA has already launched in New South Wales, Victoria and Western Australia and has received positive feedback from all parties involved.  While it has launched in Queensland, currently only settlement notices and caveats can be lodged through the platform.  The revised duties legislation is currently before Parliament and is expected to be presented at the next sitting.  Once the revised duties legislation is passed, property transfers will be able to be performed through the PEXA platform.

PEXA will allow for Titles Office documents to be signed electronically instead of passed around various parties for signatures and will allow for electronic lodgements of these documents with the Titles Office.  PEXA will also immediately transfer settlement funds electronically between financial institutions and solicitors' trust accounts removing the need for bank cheques to be drawn and delivered at settlement.

PEXA will also be launching a mobile application which clients can download to their smartphones.  This app will provide real time updates in relation to the progress of client's transactions.

Along with many other legal practitioners, we enthusiastically look forward to the launch of PEXA property transfers as the PEXA platform will allow us as a registered user to provide our clients with faster, safer and more efficient settlements and fewer disbursements in their property transactions.  Persons having an interest in this are free to contact me on 3234 3105 or valerie@anderssens.com.au.  Otherwise, watch this space for formal announcements as to the launch of the PEXA platform for property transfers.

Agribusiness Monthly June 2015

Posted by: Kylie Wilson

Key Highlights:

1. Grains & Oilseeds - El Nino threat continues to support local Australian grain prices despite exports being globally uncompetitive. Relative to global prices, domestic grains markets are expected to stay well supported throughout 2015.
2. Beef – Prices have lifted further, even though slaughter and production numbers continuing at record levels.
3. Dairy – The mechanics for a global market rebound are building; but are not likely until early 2016.
4. Sheepmeat - Strong demand for Australian lamb in the US and Middle East is compensating for a drop in Chinese demand, helping to stabilise prices. 
5. Wool - The Eastern Market Indicator (EMI) pushed to a four year high, gaining 11% through the month. While prices eased in mid June, prices remain 300c higher than at the beginning of the season (July 2014).

To view Full Report Click Here.

Property Bubble & CGT Measures as a Tool of Control of Escalating Property Prices?

Posted by: Tony Allen

Almost every day we read reports of concerns about the property bubbles in Sydney and Melbourne and of government investigations into breaches of the Foreign Investment Review Board investment rules. Click Here for report by ABC. It would seem that Australia is not the only country to be concerned about escalating residential property prices and the need to consider counter measures.

It has been reported that last Friday, 6 June 2015, the Taiwanese Legislative Yuan [parliament] passed a tax reform bill that will impose a capital gains tax [CGT] of up to 45 percent on profits made on the sale of property. The new tax plan, which is scheduled to take effect on Jan. 1, 2016, was expressed to form part of the government's efforts to rein in high residential housing prices and represents a major change from current practices. Click here for report by Central News Agency.

It will be interesting to see if the Australian government considers this CGT lead, whether in whole or in part, as a suitable counter measure to the escalating property prices around Australia.

Rabobank's Latest Insights on Current Agricultural Prices

Posted by: Kylie Wilson

The Agribusiness Monthly provides timely information and analysis on agricultural conditions, commodity price updates and commentary on the latest sectoral trends and developments.

To view the May issue of Agribusiness Monthly, please click here.

Joint Seminar by UBS and Anderssen Lawyers

Posted By: Scott Thompson

Our recent seminar was well attended and a very appreciative gathering listened to Kylie Wilson deliver great succession planning advice for blended families – aim to have no assets in your estate! 

We also heard from David Sokulsky of UBS outline world trends and even identified Harvey Norman shares as a good buy, just before they increased significantly in value a few days later!

If you would like to go on our mailing list for future seminars please contact Laura@anderssens.com.au

When is a SMSF Binding Death Benefit Nomination not binding?

Posted by: Richard Thompson

The recent case of Munro v Munro underscores the importance of ensuring that requirements prescribed by a self-managed superannuation fund (SMSF) deed in respect of the making of a binding death benefit nomination are strictly complied with.

Please click here to view my full article co-authored with Richard Williams, Barrister-at-law published in this month's Lexis Nexis Bulletin.

ATO waves another red flag about insurance in superannuation

Posted by: Kylie Wilson

On 1 May 2015 the ATO released ATO ID 2015/10.  This interpretative decision further illustrates the ATO's views about an SMSF acquiring a life insurance policy over the life of a member where the acquisition of the life insurance is a condition of a business succession/buy-sell agreement.

The ATO had previously expressed its view, that this was a breach of the sole purpose test under Section 62 of the Superannuation Industry (Supervision) Act (SISA), in a private SMSF Specific Advice issued on 12 March 2014.

In the case that was the subject of the ATO ID, the terms of the relevant buy-sell agreement required the SMSF to purchase a life insurance policy over the life of the member based on an agreed value of shares owned by the member in a company in which the member and the member's brother were the only shareholders.  In the event of the member's death, the terms of the agreement directed the proceeds of that life policy to the member's spouse and the member's shareholding in the company to the member's brother.

The ATO took the view that this arrangement:

1. breached the sole purpose test in section 62 SISA;
2. constituted the provision of financial assistance to a relative of the member in breach of section 65 SISA; and
3. was not in accordance with the relevant SMSF investment strategy.

It is not uncommon for life insurance to be held in superannuation.  When life insurance is owned by an SMSF it will be important to ensure that the terms of any buy-sell agreement that is entered into by members of that SMSF do not result in the SMSF breaching the sole purpose test which can result in significant compliance issues for the SMSF.

If you have any questions about this issue you should contact our superannuation team for further information.

Major Shift in State Government Policy Will Impact on Grazing Rights in Queensland's National Parks

Posted by: Tony Allen

In August 2013 I was pleased to write a blog concerning the positive announcement of the then Newman Government that promised farmers and graziers across Queensland greater security of land tenure. At that time, the former Premier unveiled important changes to leasehold land renewals and committed to setting clear pathways for farmers and graziers to upgrade from leasehold to freehold land. For many grazing families this was extremely promising news as their grazing interests in many cases been had been held in the same family for multiple generations and had become a fundamental part of the family business operations.

It was therefore disappointing to recently read a report that suggests a major shift away from this policy by the current Queensland government to a policy that could result in the loss of existing grazing leases in national parks. The new National Parks Minister Steven Miles is quoted as saying that Labor was not keen on the idea to roll such grazing leases to new 20 and 30-year terms and that "It's not our intention to continue renewing leases as the previous government intended to do".

Pressure is coming from interest groups such as the National Parks Association of Queensland Inc (NPAQ), which takes the view that grazing threatens the long-term viability of native species in the parks. While NPAQ wants National Parks Minister Steven Miles to rule out renewing any of the grazing leases and to consider options for ending them early, the Minister is considering the Government's options.

Whatever position is finally adopted by the current government, this development highlights the fundamental difference between freehold title and grazing leases and the need for graziers to review their grazing operations and develop plans that take account of such policy changes. This story will be watched by many.

 

Testamentary capacity and the importance of an accurate medical report

Posted by: Richard Thompson

Lessons learnt from Konui v Tasi & Anor [2015] QSC 074

 

On a daily basis, hundreds of lawyers around the State are instructed by clients to prepare new Wills.  When obtaining instructions and witnessing these testamentary documents, lawyers are under a strict duty to ensure that in their mind the client has "capacity".  That is, that the individual has the requisite understanding of the nature and effect of entering into the document.

It is not uncommon for solicitors acting for a client who has health conditions to seek medical opinion regarding the client's testamentary capacity.  Obtaining a medical report is important evidence in the event the Court is asked to determine whether the client had the requisite capacity when signing a Will or Codicil.

In the recent Supreme Court case of Konui v Tasi & Anor [2015] QSC 074 the Court considered a report given by the Testator's treating doctor in determining whether the deceased had capacity two days prior to death when an informal Will was signed.

Where a valid formal Will exists, there is a presumption that the Testator had testamentary capacity. Therefore the onus is on the party attempting to prove that the Testator did not have the capacity to sign the Will.  Justice Boddice in the Konui case made an important distinction to this presumption when His Honour at 43 said:

"The onus of proving testamentary capacity where there is an informal Will lies on the party seeking to convince the court the deceased intended the informal document to constitute his or her Will"

This essentially reverses the usual presumption of testamentary capacity and makes it critical for the party making the application for the validity of the informal Will to provide the Court with the necessary evidence, such as a medical report from the presiding doctor.

The doctor in Konui formed the professional opinion that the deceased did have capacity on the day of signing the purported Will.  However, it became clear through the course of the trial that that the doctor provided the opinion without the knowledge that the deceased had access to a patient controlled opioid for pain relief. 

The Court found it inconceivable that the deceased had not accessed the drug, which in turn could have caused the deceased to become drowsy and adversely affect short term memory.

Although the doctor maintained that the deceased was lucid throughout the day of signing the purported testamentary document, the Court did not accept the doctor's opinion and ultimately found that the deceased did not have the required capacity when signing the informal Will.  This meant that the Will was not valid and the Testator's wishes expressed in that document would not be followed.

Whilst there was additional evidence that the Court considered when reaching this decision, it is interesting to consider whether the Court would have found differently had the doctor provided the report after properly considering the deceased's access to the analgesia.

The lesson learnt from the Konui case is to ensure a doctor has properly considered all medical aspects of the client before making their assessment and providing a capacity report.  This will greatly assist upholding the last wishes of a client should the matter be decided by the Court.

Do you need your Will reviewed or updated? For a free, no obligation, review of your current succession plan, please contact our Succession Law team.

Do you have concerns about the capacity of an individual when they signed a Will? For a free, no obligation meeting to discuss further, please contact our Estate Litigation team.

Richard Thompson, Lawyer, is part of Anderssen Lawyers' Succession Law and Estate Litigation teams. Richard can be contacted on (07) 3234 3113 or richard@anderssens.com.au.

New Lawyer (with familiar surname) Joins the Firm

Posted by: Scott Thompson

We are pleased to announce that Richard Thompson has joined the firm. Richard has 5 years post admission experience in private practice and will be engaged across all areas of the firm, working closely with our senior lawyers. Scott Thompson, Managing Director is delighted to have his son, a 3rd generation lawyer, as a colleague. Richard is married to wife Lisa, father to 14 month old Teddy and lives on the north coast. Working both from the office and remotely, he will be taking advantage of the work/life balance Anderssens offer. Richard is a keen triathlete, having achieved many outstanding results over the years, such as winning the Hawaii Ironman World Championship (18-24 age group). Click here for Richard's Page.

Time Running Out to Lodge a Superseded Development Application to BCC

Posted by: Megan Tilbrook

Over the last couple of months we have had clients inform us about the impact the changes from City Plan 2000 to City Plan 2014 have had on their land. For those who have sites where the changes have had a negative impact on the development potential we have considered in consultation with our clients and their team of experts whether it would be appropriate for a request to be made to apply the superseded planning scheme to a development application.

Section 95 of the Sustainable Planning Act 2009 allows a request to be made to the council to apply the provisions of City Plan 2000 to assessable development. Any request however must be made within 12 months of the new scheme coming into effect - that is the request must be made by 30 June 2015.
If the council decides to refuse to apply the superseded scheme there are some circumstances where compensation can be claimed for the reduction in the value of the land. To have the ability to claim compensation however it is essential that a request be made to apply the old scheme first.

If you have any concerns about the impact City Plan 2014 has had on your land you must take action prior to 30 June 2015, or your rights will be lost forever.

Anderssen Lawyers Case Study Series - Case Study 1: Do you really need a Binding Death Benefit Nomination?

Posted by: Kylie Wilson

The recent Supreme Court decision in Munro v Munro [2015] QSC 61 highlighted again the consequences of invalid Binding Death Benefit Nominations that are not prepared in accordance with the terms of the Trust Deed of the relevant Self Managed Superannuation Fund.
http://archive.sclqld.org.au/qjudgment/2015/QSC15-061.pdf
 
It is timely therefore to consider whether or not a Binding Death Benefit Nomination should be put in place at all. It is all too common for Binding Death Benefit Nominations to be signed by clients with the documents that establish their SMSF. However, in our view, no Binding Death Benefit Nomination should be prepared for a client unless it is prepared as part of the overall estate planning strategy for the client.
 
Below are two different case studies to highlight the issues that need to be considered when determining whether or not a Binding Death Benefit Nomination should be put in place.

• Jack and Jill are married with three children. Jack has been running his own plumbing business but has never given much thought to asset protection. He runs the business as a sole trader in his own name.
• Jill is killed in a car accident and at that time Jack is being sued for negligence as a consequence of some faulty plumbing work. Jack and Jill have their own SMSF and when their SMSF was established they signed valid Binding Death Benefit Nominations to direct each other's death benefit 100% to their spouse.
• The Binding Death Benefit Nomination directs Jill's superannuation death benefit directly to Jack where it will be an asset available to be accessed by creditors. Without the Binding Death Benefit Nomination the Trustee of the Self Managed Superannuation Fund (Jack or a corporate trustee of which Jack is a director) would have retained discretion to direct the death benefit away from Jack where it was not accessible by creditors.

The above case studied can be compared and contrasted with the following case study:

• Bob is a lawyer and decides to do his own Binding Death Benefit Nomination without reviewing the terms of the Trust Deed for his Self Managed Superannuation Fund.
• Bob and his second wife Wendy are both directors of the corporate trustee of the Self Managed Superannuation Fund. 
• Bob's binding death benefit nomination directs his death benefit to the children of his first marriage. However, the trust deed for his Self Managed Superannuation Fund provides that Death Benefit Nominations are not binding on the trustee.
• On Bob's death Wendy becomes the sole director of the corporate trustee of the Self Managed Superannuation Fund, and elects not to pay out the death benefit to Bob's children from his first marriage, contrary to the Binding death benefit direction.

The above case studies are designed to highlight some of the reasons why Binding Death Benefit Nominations need to be considered carefully. It should be ensured before such a document is signed that:

1. There is a reason it should be put in place;
2. If it should be put in place that it directs the death benefit to go where the client actually wants it to go; and
3. It is valid and enforceable.

Are there any black sheep in your family?

Posted by: Valerie Chagnon-Couture

In Queensland, a spouse, child or dependant of a deceased person can make an application to the Court for a share of a deceased person's estate on the basis that adequate provision for the applicant's maintenance and support was not made. This is known as a Family Provision Application. A child for these purposes includes a biological child, a stepchild and/or an adopted child. Foster children may also have a claim in certain circumstances. 

Written notice of the intention to claim against the estate must be given to the executors or administrators of the estate within 6 months of the date of death. An application must then be commenced within 9 months of the date of death. It is important to note that the estate should not be distributed by the executors within 6 months of the date of death or executors can be personally liable if a claim is made against the estate.

Where a claim is made against an estate, some aspects the Court will consider include:

1. The size and nature of the deceased person's estate;
2. Whether the deceased had any obligations or responsibilities to applicant;
3. The applicant's financial position, needs, age, health and future prospects;
4. The relationship between applicant and deceased;
5. Whether provisions were made for the applicant during the deceased's lifetime;
6. The deceased's testamentary intentions (memorandum of wishes, letters, etc); and
7. The financial position, age, health and future prospects of the beneficiaries named in the Will.

In the majority of cases decided by the Courts in Queensland, the estate has had to bear the legal costs of both the estate and the claimants against the estate, even where a claimant is unsuccessful in his/her claim. However, some recent cases have seen the Court order unsuccessful applicants to pay the costs of the executor and the separately represented beneficiaries. It remains to be seen whether the Courts will continue this trend in relation to the legal costs of unsuccessful applicants but it does mean many applicants will need to consider the possible legal costs of an unsuccessful claim when making a Family Provision Application.

For further information on family provision applications or for advice on how to protect your estate against such applications, please contact our succession team.

 

 

Agribusiness Monthly

Posted By: Kylie Wilson

The Agribusiness Monthly provides timely information and analysis on agricultural conditions, commodity price updates and commentary on the latest sectoral trends and developments. 

To read the article, CLICK HERE.
 

Legal Alert Is your Superannuation death benefit going where you want it to after your death?

Posted by: Kylie Wilson

On the 25^th of March 2015 the Supreme Court of Queensland delivered a Judgement in the matter of Munro & Anor v Munro & Anor [2015] QSC 61.

The Court declared that a Binding Death Benefit Nomination form signed by Barry Munro was not binding because it did not comply with the terms of the trust deed for the Barry and Suzie Super Fund. 

This meant that the trustees of the Barry and Suzie Super Fund after Barry Munro's death were able to distribute Barry's death benefit at their discretion and not in accordance with the binding death benefit nomination form that had been signed by Barry John Munro on 22 September 2009.

Interestingly, the Court distinguished the well-known case of Donovan v Donovan by determining that although the relevant clause of the trust deed required that a binding nomination comply with the "Relevant Requirements" this did not require the Binding Death Benefit Nomination to comply with Regulation 6.17A of the Superannuation Industry (Supervision) Regulations.  The Court also confirmed that Regulation 6.17A does not apply to Self Managed Superannuation Funds unless the trust deed for the Fund requires that a BDBN comply with that regulation.

Notwithstanding this, Mr Munro's Binding Death Benefit Nomination form directed his death benefit to be paid to "Trustee of my Estate" and the Court determined that this nomination did not comply with the relevant clause of the trust deed for the Self Managed Superannuation Fund as this was not a nomination of either Mr Munro's executors under his Will or any of his "nominated dependants" and was therefore not a binding nomination for the purpose of the relevant clause in the trust deed. 

The case highlights again the importance of ensuring that a Binding Death Benefit Nomination is in fact binding in accordance with the terms of the trust deed of your SMSF if you wish to ensure that your death benefits are to be paid in accordance with that Binding Death Benefit Nomination.

Have you had a $6 haircut ?

Posted by: Scott Thompson

Heard an amusing story the other day about an old barber in a small town. He was the only barber in town and charged $35 a haircut and he took pride in his work and always did a good cut. A new barber moved into town and opened across the street from the old barber. A large sign went up in the new barber's window stating ' $6 haircuts'. The old barber was very concerned and worried about the impact on his clients and business. He had a long think about it and the next day erected a large sign in his window that read 'We fix $6 haircuts'.

I am seeing the $6 haircut equivalent in our legal industry more frequently. Cheap and in some cases, 'free' legal documents online is one example (Wills, Super funds, trusts etc) . Allowing price to be the only determining factor in choosing a lawyer (or a barber for that matter!) is fraught with danger.

I might have to hang a similar sign to that of the old barber out the front of our office!

Our office is your office

Posted by:  Scott Thompson

Our clients enjoy the complementary use of our meeting room facilities. If our clients need to be in the city for a meeting, or just need quiet time, they have the use of our meeting rooms as a valued extension of their office and business. We view this as an additional service to assist our clients and their businesses. 
Some recent examples of client use of our meeting rooms have been

• Hosted shareholder meetings
• Training seminars
• Off-site employee interviews
• Mediation conferences
• Business meetings with accountants and other advisors
• A quiet base while in the city

Our facilities include

• Quiet corporate meeting rooms
• Latest AV and Teleconferencing facilities including Bluetooth conference speakers for your own mobile phone
• Mondopad 50" Touch screen with electronic white board
• Main meeting room seats 12, removal of internal partition expands room to seat 20
• Complementary tea and coffee
• Catering and Secretarial support (available at client cost)

If you would like to be a client of our firm and benefit from that relationship please contact me so that we can discuss what we can do for you.