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People spend their lives doing everything they can for their children, grandchildren and family.

And yet when they have the opportunity to transition the wealth to them, there is often very little attention paid to how that will actually happen.

If a client approached their lawyer with a litigation matter and the lawyer advised them that the average cost for both sides to take the matter to a full trial in the Supreme Court would be a minimum of $200,000, it is probable that the client’s instructions would be to do everything in the lawyer’s power to resolve the matter as swiftly and economically as possible.

So why is it when lawyers ask their clients about their estate planning, the answer is so often “let them fight it out after I’m gone”, or “I’ll be dead, what do I care?”

There are a number of reasons people might not take steps to effectively plan for their ultimate demise and transition of wealth to the next generation.

  1. Too hard basket
    This is probably the most common. People are now more often in blended families and it can be difficult to balance the tensions between children to previous marriages and new spouses and/or children. Complex situations can cause a person to bury their head in the sand. While every situation is unique, there are common strategies that can be adopted to deal with this and ensure that everyone is adequately provided for. It is often not as hard as people expect it to be.
  2. There’s still time
    Until there isn’t. A lot of people die without a Will because they put it off until “tomorrow”. Tomorrow becomes next week, which becomes next month, which becomes next year. Too often we hear “he just died in his sleep at 52”, or “she had an aneurysm at 45”. Fact: death happens to everyone and no one really ever knows precisely when.
  3. I just need to get X done first
    A large number of Australians are concerned that they have insufficient assets to meet their needs for the remainder of their lifetime, or they might be waiting for certain events to happen before they go ahead. This leads many to put estate planning on the backburner. Stop procrastinating. A good estate planning lawyer has seen almost every scenario and there isn’t much they can’t deal with. An estate plan can always be updated later if a person’s situation changes, or structures can be put in place to give maximum flexibility. It is better to have something that is slightly imperfect than seeking perfection.

An uncertain legacy

There has recently been a significant rise in challenges to Wills by beneficiaries who feel they have not been adequately provided for.

One of the reasons for this is that there are more law firms offering to act for beneficiaries on what is known as a “speculative” basis. One of the reasons this is attractive to firms is because the costs are usually borne by the estate, and it is a high threshold to overcome in order for a beneficiary raising a challenge to be solely liable for their own costs.

The problem for families is that as soon as a claim is commenced, the administration of the estate is put on hold until it can be resolved. This can mean that beneficiaries (including a spouse) can be forced to wait months or even years before they see any distribution from the Estate.

Another increasing area of claims are what are known as “constructive trusts”. Quite simply, if a person makes a promise to another during their lifetime, that person who was the recipient of the promise could make a claim. This is common in family businesses where one child works in the family business on the promise they will receive it (or at least part of it) at the end. But then a parent might die before they have documented the arrangement and then the only thing that is certain are the legal fees to unravel it all.

Estate planning allows families to move on with as little stress and cost as possible. Firstly, it serves to clearly and unambiguously communicate your intentions to your loved ones. Secondly it provides a framework to ensure the wealth is properly managed for the beneficiaries. Thirdly, it is an opportunity to establish a purpose for your family’s wealth.

Estate planning can seem overwhelming, but it does not need to be this way. Macpherson Kelley is here to provide solutions. We provide tailored estate planning to ensure that you can do everything for your family.

This article was written by Nicole Treacey, Senior Associate – Private Clients and Ryan Prygiel, Administrative Assistant – Property and Construction.

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Who cares if I don’t leave a Will? I’ll be dead

22 August 2019
nicole treacey ryan prygiel

People spend their lives doing everything they can for their children, grandchildren and family.

And yet when they have the opportunity to transition the wealth to them, there is often very little attention paid to how that will actually happen.

If a client approached their lawyer with a litigation matter and the lawyer advised them that the average cost for both sides to take the matter to a full trial in the Supreme Court would be a minimum of $200,000, it is probable that the client’s instructions would be to do everything in the lawyer’s power to resolve the matter as swiftly and economically as possible.

So why is it when lawyers ask their clients about their estate planning, the answer is so often “let them fight it out after I’m gone”, or “I’ll be dead, what do I care?”

There are a number of reasons people might not take steps to effectively plan for their ultimate demise and transition of wealth to the next generation.

  1. Too hard basket
    This is probably the most common. People are now more often in blended families and it can be difficult to balance the tensions between children to previous marriages and new spouses and/or children. Complex situations can cause a person to bury their head in the sand. While every situation is unique, there are common strategies that can be adopted to deal with this and ensure that everyone is adequately provided for. It is often not as hard as people expect it to be.
  2. There’s still time
    Until there isn’t. A lot of people die without a Will because they put it off until “tomorrow”. Tomorrow becomes next week, which becomes next month, which becomes next year. Too often we hear “he just died in his sleep at 52”, or “she had an aneurysm at 45”. Fact: death happens to everyone and no one really ever knows precisely when.
  3. I just need to get X done first
    A large number of Australians are concerned that they have insufficient assets to meet their needs for the remainder of their lifetime, or they might be waiting for certain events to happen before they go ahead. This leads many to put estate planning on the backburner. Stop procrastinating. A good estate planning lawyer has seen almost every scenario and there isn’t much they can’t deal with. An estate plan can always be updated later if a person’s situation changes, or structures can be put in place to give maximum flexibility. It is better to have something that is slightly imperfect than seeking perfection.

An uncertain legacy

There has recently been a significant rise in challenges to Wills by beneficiaries who feel they have not been adequately provided for.

One of the reasons for this is that there are more law firms offering to act for beneficiaries on what is known as a “speculative” basis. One of the reasons this is attractive to firms is because the costs are usually borne by the estate, and it is a high threshold to overcome in order for a beneficiary raising a challenge to be solely liable for their own costs.

The problem for families is that as soon as a claim is commenced, the administration of the estate is put on hold until it can be resolved. This can mean that beneficiaries (including a spouse) can be forced to wait months or even years before they see any distribution from the Estate.

Another increasing area of claims are what are known as “constructive trusts”. Quite simply, if a person makes a promise to another during their lifetime, that person who was the recipient of the promise could make a claim. This is common in family businesses where one child works in the family business on the promise they will receive it (or at least part of it) at the end. But then a parent might die before they have documented the arrangement and then the only thing that is certain are the legal fees to unravel it all.

Estate planning allows families to move on with as little stress and cost as possible. Firstly, it serves to clearly and unambiguously communicate your intentions to your loved ones. Secondly it provides a framework to ensure the wealth is properly managed for the beneficiaries. Thirdly, it is an opportunity to establish a purpose for your family’s wealth.

Estate planning can seem overwhelming, but it does not need to be this way. Macpherson Kelley is here to provide solutions. We provide tailored estate planning to ensure that you can do everything for your family.

This article was written by Nicole Treacey, Senior Associate – Private Clients and Ryan Prygiel, Administrative Assistant – Property and Construction.