April 4

How discretionary are discretionary trusts?

Family (also often called discretionary ) trusts have been protecting assets, policing family benefit sharing, simplifying inheritance and spreading family income and the tax that goes with it.

On average, many of those trusts can theoretically benefit parents, children , grandparents, grandchildren, siblings and aunts and uncles, all multiplied by two to include their spouses – so, many millions of Australians who could potentially have access to a benefit from a discretionary or family trust.

Yes, theoretically, and yet, the vast majority of those people (“mere objects”) never receive a distribution from the trust.

It used to be thought that the trustee didn’t need to give these “mere objects” a second thought. The trustee was believed to have absolute discretion to decide who received what, if anything, from the trust. So, if somebody did not like the fact they were never considered, bad luck.

A recent  Victorian Court of Appeal decision in Owies v JJE Nominees Pty Ltd (2022) showed this to be not entirely the case .

The Owies Family Trust distributed income every year to parents and one adult child while the other two adult children missed out. The trust was valued at many millions of dollars , so the income was not insubstantial.

When the two adult children who never received anything sued, the trustee argued it had complete and unfettered discretion in making its decisions, which the court could not interfere with. The court agreed, but said it could ensure that the trustee acted appropriately in reaching that decision.

The trustee had to act in good faith, giving real and genuine consideration as to who might receive a benefit and with the trust’s primary purpose in mind.

In particular, a trustee could not adopt a fixed rule for distribution, or simply do what one of the key persons in the trust told it to do.

A trustee must engage in bona fide inquiries about the potential beneficiaries, and must then consider how to exercise discretion in light of the results of those inquiries.

The big question is, of course, how are you going to make that decision when the potential beneficiaries include two parents, two adult children, four grandchildren, four grandparents, umpteen siblings, aunts and uncles and all their spouses?

The court said there was no obligation on the trustee to make a detailed analysis to a level that is unworkable. However, in the circumstances of a family trust, the trustee would be expected to be informed about the differing circumstances, needs and desires of each possible beneficiary. That could still be a lot of work.

That problem is exacerbated by the court’s rejection of the argument that the family members saw one another regularly at various social functions, and could have made a claim for a distribution at those events. The court wanted the trustee to be more formal and proactive in its inquiry.

January 24

Divorce: Overview

Divorce is the legal end of a marriage (dissolution of marriage). Australia has ‘no fault’ divorce. This means that when granting a divorce, the Court does not consider the reason/s the marriage ended. Neither spouse needs to prove that the other did (or did not) do something which caused the breakdown of the marriage. The only ground for divorce is that the marriage broke down and there is no reasonable chance that the parties will get back together.

The Federal Circuit and Family Court of Australia (the Court) has the jurisdiction or power to deal with divorce under Part VI  of the Family Law Act 1975.

The granting of a divorce does not determine issues of financial support, property division or arrangements for children. It is simply a formal recognition that the marriage has ended.

Can I apply for a divorce?

You can apply for a divorce in Australia if either you or your spouse:

  • regard Australia as your home and intend to live in Australia indefinitely, or
  • are an Australian citizen by birth, descent or by grant of Australian citizenship, or
  • ordinarily live in Australia and have done so for 12 months immediately before filing for divorce.

You need to satisfy the Court that you and your spouse have lived separately and apart for at least 12 months, and there is no reasonable likelihood of resuming married life. It is possible to live together in the same home and still be separated. This is known as being separated but living under one roof.

Same-sex married couples are treated the same as other married couples and can apply for divorce if the marriage is recognised in Australia and you meet the requirements for divorce under the Family Law Act 1975.

If you were married overseas and your foreign marriage is recognised in Australia (in accordance with Part VA of the Marriage Act 1961), you must provide the Court with a copy of your marriage certificate. If your marriage certificate is not in English, you need to upload an English translation of the marriage certificate, together with an affidavit translation of marriage certificate from a certified translator.

If there are children aged under 18, a court can only grant a divorce if it is satisfied that proper arrangements have been made for them. You will be asked to provide information about any children of the marriage, or who were treated as members of the family in your application. Be sure to provide sufficient detail about the how the child/ren spend time and communicate with each parent, their education, health and financial support.

July 10

How Binding is Your Binding Death Benefit Nomination

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A recent case considered by the Queensland Supreme Court Williams v Williams & Anor [2023] QSC 90 has highlighted the importance of taking all of the required steps to ensure a binding death benefit nomination is valid and capable of giving a legally binding direction to the trustee of a superannuation fund for the payment of death benefits following the demise of a superannuation fund member.

Binding Death Benefit Nominations, if valid, will ensure that superannuation benefits are paid to a named beneficiary following the death of superannuation fund member.  There are strict requirements for the completion of Binding Death Benefit Nomination forms, and their renewal, including the categories of people who can be nominated.

However, as the case of Williams has reminded us, Binding Death Benefit Nominations must be returned to the superannuation fund in the correct manner if they are to be binding on the fund.  In that case, the superannuation fund member had completed a Binding Death Benefit Nomination for their interest in a self-managed superannuation fund.  They were one of 2 trustees of the fund.  Whilst the member trustee filed the document, they failed to deliver a copy (called service) to their co-trustee.  As a result, the nomination was not legally binding and the benefits were not paid as they intended.

July 10

I’VE BEEN TOLD I NEED AN APOSTILLE. WHERE AND HOW DO I GET IT?

If you have an original document issued by an Australian government department (ie, birth certificate, marriage certificate, citizenship certificate), also known as a public document, you can obtain an apostille from the Department of Foreign Affairs and Trade (DFAT). If you have a private document (ie, power of attorney, contract) or a copy of a public document, you must notarise that document before DFAT will issue you with an apostille.

In Australia, only DFAT has the authority to issue an apostille. For more information, also visit

Leave the apostille to us!

Many of our notary public clients will apply to DFAT for an apostille themselves, however, this can be troublesome and time-consuming (especially post-COVID as you can no longer ‘just walk in’ to the DFAT office without an appointment). If you want us to help you apply for an apostille, please advise us at the time of making an appointment to obtain a quote inclusive of the DFAT apostille fee and our service fees. We would be pleased to assist you.

IMPORTANT:
If the intended destination country is NOT a signatory to the Apostille Convention, then your documents sent to that country must be authenticated by DFAT and authenticated by the intended destination country’s foreign representative office in Australia before the documents will be recognised in the intended destination country.

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