July 7

When an executor does not wish to act

There is no obligation that you must accept the role of executorship, even if you had agreed with the will-maker that you would. If you don’t want to act when the time comes, and you have not meddled into estate property, you can give up the right to do so. To do this you renounce the executorship, meaning you renounce your right to probate of the will.

If you were named as an executor, you have the right to apply for a grant of probate, because you were the specific choice of the will-maker in their will to be their executor. It also means you have the right to renounce it. Probate is approval from the court to deal with the estate. To renounce executorship or probate means you give up your right as executor appointed under the will to apply to the court for a grant of probate.

To view more information about our Wills and Probate service please click here

July 7

Two Types Of Co-Ownership

There are two ways of co-owning property – JOINT TENANTS AND TENANTS IN COMMON. The legal entitlements of these are different, with different outcomes for ownership interests on death.

Co-ownership of property in these ways is not restricted to real estate, but can apply to other forms of property, such as joint bank accounts and credit card accounts. So a question for co-owners is who will inherit their interest?

An important attribute of joint tenancy is A RIGHT OF SURVIVORSHIP. It means that when one co-owner dies, the survivor(s) automatically own the property by the operation of law. This occurs independently of a will (and hence the probate process).

When ultimately there is a sole survivor, that person will own the whole property, and they may deal with it as they wish. So it is important for a sole survivor to revise their will to take this change into account. If not the rules of intestacy apply, which may lead to an undesirable outcome.

With TENANTS IN COMMON there is no right of survivorship. Instead, each co-owner has a separate, undivided share in the property (although not in a physical sense), and may independently deal with it as they wish. Therefore, that share will form part of their estate and they may choose who will inherit it through their will.

To view more information about our Wills and Estates service please click here

June 12

Stopping (Ex) Employees from Stealing your Business

Restraint of trade clauses are now quite commonly used in employment contracts, but this wasn’t always the case.

A covenant in restraint of trade, also sometimes referred to as a ‘non-compete’ clause, is a term in an employment contract that requires an employee, after leaving an employer, not to perform a particular type of work within a geographical area around the current employer’s place of business for a specified period of time.

Traditionally, employers weren’t able to include covenants in restraint of trade in their employment contracts as it was considered contrary to public policy. The law has developed over the years to recognise these clauses as valid, provided they are justified in the circumstances, particularly to protect the employee’s legitimate business interests. It is now well established that an employer may impose restraints on their ex-employees, directed at protecting the goodwill of the business following the employee’s departure.

The employer must demonstrate that, at the time of the agreement regarding the restraint:

· The restraint is required to protect the employer’s legitimate business interests, such as confidential information, goodwill, a stable workforce, customer connections, or commercial interests; and

· The restraint includes no more than is reasonably necessary to protect those interests.

When considering what should be included in a non-compete clause, the basic question is: what is the employer seeking to protect? Common reasons for inserting a non-compete clause are to ensure that employees do not take up employment with a competitor or set up a rival business.

Is the covenant in restraint of trade reasonable?

Whether the restraint is reasonable will be judged at the time the contract is made, in light of all of the surrounding circumstances, including the length of the restraint, the geographical area over which the restraint is to operate and what the employee is being restricted from doing.

Courts are more likely to uphold restraints regarding customers, clients, employees and confidential information, and less likely to uphold restraints against ‘competition’ (e.g. working for a competitor.) A ‘non- compete’ restraint which serves no further purpose than to prohibit employees from working with a rival organisation are unlikely to be enforceable, as this is contrary to public interest.

The circumstances of how the employment contract was terminated will also be relevant in assessing the reasonableness of the restraint clause. For example, if an employee is made redundant following a company restructure, a non- compete clause maybe held to be unreasonable.

The general factors a court will assess in determining the reasonableness of a particular restraint of trade clause include:

· The nature of the ‘protectable’ interest that is the subject of the agreement;

· The duration of the restraint;

· The extent of the restraint; and

· The relevant bargaining power of the parties at the time of entering into the agreement and whether, as a result, it would be unconscionable to enforce the restraint.

To view more information about our Business Law service please click here

May 18

Resolving Property and Financial Matters at the end of a Relationship.

Generally speaking, there are 3 issues to discuss after a relationship breaks down irretrievably.

1. Divorce (if the parties are married). You cannot apply for a divorce until separated for at least 12 months. Separation can be under the same roof if not living as a couple.

2. Parenting. If there are dependant children (under 18 or still full-time students), satisfactory arrangements need to be made for the childrens’ care and maintenance. This can often be done by informal agreement with or without the help of a counsellor, but if agreement cannot be reached, may need to be decided by a Court.

3. Property and Financial.

There are basically 3 steps in ascertaining a fair and equitable apportionment of the relationship assets.

(A) Carefully calculate the nett asset pool (including both parties’ superannuation). This will involve obtaining current statements from financial institutions, super funds, credit-card providers etc., valuations of real estate and businesses.

(B) Calculate what is a fair and equitable share for each party. The starting point is a 50/50 distribution, but this will require adjustment to take into account many factors, including:

.what the parties brought into the relationship (which becomes less important the longer the relationship),

.which party has the primary responsibility for care and maintenance of children (if any),

.any relevant health issues, and

.the parties’ respective future earning capacity.

Although this is not an exact science, an experienced family lawyer, once in possession of all relevant information, will be able to provide a reasonably accurate estimate of what each party can expect to receive.

(C) Work out how the distribution is to be achieved. Is one party in a position to “buy out” the other, or will assets (perhaps even the family home), need to be sold? Is a superannuation split necessary? Is it preferable to document any settlement by way of consent Court Orders, or can it be done by way of a Binding Financial Agreement?

Parties who have ended, or who are contemplating ending, a relationship, are in stressful, and usually unchartered waters. Early advice from a competent family lawyer will remove some of that stress and provide a blueprint for negotiating an early and hopefully amicable property settlement.

To view more information about our Family Law service please click here

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