February 6

Do you have a will? Do you know where it is?

Many Australians are risking their wealth, considering somewhere between 25 and 40 per cent of people die intestate, without a Will in place.

Part of that statistic is influenced also by a loss of documents. So not only is it important to have proper, strong, appropriate documents that fit your plan in place … but you should also know where they are and ensure others know where they are, especially your executor(s). There is no public registry of the Wills nor can you Google it.

Those estate planning documents should also include things like enduring powers of attorney – financial, personal (used to be called guardianship) and medical – documents relating to superannuation and the family trust, as well as a health directive which is the statement laying out your wishes to the next of kin and the health professionals in regards to some terminal illnesses and /or conditions you may be suffering from now or in the future.

The importance of knowing where the documents are cannot be overstated. For example, family discretionary trusts are the single most utilised investment vehicle in Australia today for a multiple of reasons, not the least of which include asset preservation, that is, against claims and also for tax flexibility.

However, often people say that they lost the trust deed. That’s a disaster. So, it is extremely important to know where they are , are the documents in place, do they accurately express that which was intended to be created?Again, as with Wills, there is no public registry of these trust deeds . If you lose them you cannot recover/replace them unlike certificates of title, for example, which can be replaced by a new title issued by Land Titles Office

December 5

Capacity to make decision

Concerns about capacity of a person to enter into legal transactions is not new, nor is the acceptance that capacity is issue-specific and that incapacity is not static and can change. The Law Institute of Victoria (LIV) will be launching its “ Revised Capacity Guidelines” as a guidance for lawyers to assess the client’s capacity to give proper instructions or to participate in a court or similar process. Below are some of the important points as recently published by the LIV president that will be argued and taken into account in addressing this important issue.

Currently, the law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation.

Taking an overview of the many different situations in which courts have been called on to consider questions of capacity – the validity and fairness of transactions, fitness to plead, testamentary capacity, litigation guardians, guardianship and administration statutes, and consent to medical treatment are examples – demonstrates the test of capacity is specific to the issues for which capacity is required. It is hardly surprising, given the complexity of human cognitive and intellectual function, that capacity is related to the nature and complexity of the transaction or decision or the ongoing continuum of transactions that are in issue.

Questions about capacity arise in many areas – much beyond, the elderly, the very young – in the making of powers of attorney or wills and in criminal cases.

Capacity is fluid and can fluctuate in a year, a week or even in the same day. Some welcome legislative guidance can be found in the Powers of Attorney Act 2014 (Vic), such as section 5 of that Act, which requires a person assessing capacity to do so at a time and in an environment most conducive to promoting a person’s capacity.

A person’s capacity may be affected by a number of factors, including: taking certain medications, mental illness, an intellectual disability or an age-related cognitive disability, such as Alzheimer’s, grief, depression, reversible medical conditions or hearing or visual impairments. However, one or more of these factors doesn’t mean that person lacks decision making capacity. Some people may be more capable of making decisions at different times of the day or with practicable and appropriate supports in place.

Clients may have capacity for some decisions, but not for others; capacity is always decision-specific.

November 8

Electronic Conveyancing

We are proud and very excited to confirm that Elizabeth Palumbo from Kelly and Chapman’s Property Department has now conducted the firm’s first electronic conveyancing settlement using the “PEXA” platform.

pexa PEXA represents a leap forward in conveyancing offering our business greater efficiency and our clients’ greater piece of mind that settlements will occur on a “real time basis” and without any unforeseen delays or issues immediately giving vendors access to their sale funds and purchaser’s being transferred onto Title immediately. The way forward in Victoria will be electronic conveyancing and soon, Paper Titles will be a thing of the past

Most certificates of title in Victoria are still in paper form. Land Victoria are in the process of facilitating a bulk conversion of approximately 1.6 million paper certificates of title into electronic form (eCT) meaning that many CTs in Victoria will now be eCTs. Feel free to contact our office with any questions you may have moving forward in this exciting venture.

October 19

Trustees of a Family Trust

The position of a Trustee is an important position. The Trustee’s duties are covered between legislation in each state, commonwealth legislation and case law. Trustees can be individuals, one or more than one and also companies.

Trustee’s Duties

Trustees of family trusts have many duties. Many of these have been formulated by Judges through case law over the ages. Broadly speaking, the Trustees:

  • Must act in good faith
  • Must act personally
  • Must act unanimously where multiple Trustees are involved
  • Must not be dictated to by others (ie beneficiaries)
  • Have a duty to consider how distributions should be made and to whom
  • Have a duty to avoid fettering of discretion.

The Trustee also has fiduciary duties which exist alongside the various statutory obligations imposed on Trustees.

Let’s have a look at some of these duties more closely .

Duty to act personally.

This duty cannot be delegated unless permitted by the trust instrument (deed), statute or court order. The office of Trustee is viewed by the courts as one of trust and personal confidence. A common mistake is for a Trustee to execute a power of attorney to a third party (the attorney) granting the attorney general or wide ranging powers relating to the authority of the Trustee. More often than not these powers of attorney, if granted outside the scope permissible by law, will not be enforceable and can have severe consequences if acted upon.

In Victoria, under the Powers of Attorney Act 2014, a delegation of the Trustee’s powers under a general power of attorney is not permitted under section 7(2)(b). The same applies for enduring powers of attorney.

Whilst, as a general rule, the law of equity prohibits a Trustee from delegating its duties, a Trustee may appoint agents to help administer the trust.
State legislation also covers the conditions of the appointment of agents to the trust.

Duty to Act Unanimously

What happens when there is more than one Trustee – can one Trustee not consider a matter and leave it to the other Trustees to decide upon?

In essence where multiple Trustees are involved, any decision by them must be joint and unanimous.

Please note , a statutory exception exists for trustees of Self-Managed Superannuation Funds .