Young Money – Estate Planning For Millennials

We understand life is busy, whether you are studying full-time, travelling the world or thriving in your career.  Like most of us, the last thing on many young peoples’ minds are what will happen to their assets if they were to pass away suddenly.

And what assets do young people have to be worried about?  Aside from personal items, many will be thinking that all they have is some money in the bank, personal items, and maybe, a first home with minimal equity. However, many don’t consider their superannuation fund as a personal asset worth worrying about, but we all should.

Superannuation is one of those assets that many people just set and forget.  Your superannuation can be your most valuable asset, particularly as a young person, when, although the balance of actual super you have accrued is minimal, the automatic life insurance attaching to many retail and industry superannuation funds may be worth hundreds of thousands of dollars.  This will form part of your ‘superannuation death benefit’ should you pass away.

Most superannuation funds allow their members to nominate who will receive their death benefit [accumulated super and life insurance] upon their death.  What is often not communicated by the super fund, is that superannuation law only allows a limited category of persons to benefit from your superannuation fund.  Those people are a spouse or de facto partner, children or your estate [distributed by your will].

So, what happens if you don’t have a partner or children?  Well by putting in place a simple Will, you can nominate your estate by completing a death benefit nomination, and by your will you can then distribute this significant asset to third parties [for example, to parents, siblings, friends or charities].

We also know that whilst you may know and understand that you need a will, you just don’t have the time [or inclination] for multiple appointments with a lawyer during business hours to get it done.  We like doing things differently here and have recently developed an online Will service to provide a reliable and accurate will for those with straightforward circumstances who want to prepare a will on their terms.  Our Off The Rack will option is fully autonomous and can be completed anytime and anywhere [ie. on your couch in trackies at 9pm with a glass of wine in-hand] and your document is delivered to your inbox within one business day.  We also have our Tailored will option which combines online preparation with a short appointment with our lawyers to finalise and sign it, and of course, should you want the piece of mind of a fully custom will with detailed advice, our Bespoke will option is also available.

Visit https://www.cannygroup.com.au/wills/ to find out more or to get your will started, and if you’re not sure which option is right for you, complete the short questionnaire to point you in the right direction.

Powers of Attorney are another vital element of estate planning that are generally overlooked by young people. Download our free Seven Essentials of Estate Planning Guide, or look out for a future bulletin to learn more.

 

Kayla Kennedy – Solicitor

LLB

Superannuation Nominations – Make It Legit!

Don’t be trapped by the pitfalls of superannuation nominations – make it legit!

Have your circumstances changed recently?  Have you married, separated, divorced, had kids, or are your kids now over 18 years old?  It may be time to consider and/or review your superannuation nomination.

A superannuation nomination is a notice to your superfund trustee outlining who you want to receive your superannuation benefits after your death.  However, your superfund trustee is only bound by a nomination that is valid [in accordance with superannuation laws].

Many superannuation funds will not guide you through what constitutes a valid superannuation nomination, which makes it all the more difficult.

So, what constitutes a valid superannuation nomination? Your superfund trustee will look at the following hierarchy of people when considering how to distribute your super:

  1. Your spouse or ex-spouse;
  2. Your children [or other financial dependents]; and
  3. Your Estate.

Let’s break these categories down a bit further…

1. YOUR SPOUSE OR EX-SPOUSE

It may seem common sense that a superfund trustee would pay your super benefits to your partner automatically.  And this is true, particularly if you have made a nomination directing the payment to your spouse.  However, if, since making the nomination, you have separated or divorced from your spouse, the nomination is not revoked and, in fact, remains valid. Thus, your benefits may be paid to an ex!

2. YOUR CHILDREN

The intention of superannuation is to fund the retirement of you and your dependents.  Accordingly, a spouse and children who are considered to be financially dependent upon you will receive the most beneficial treatment under superannuation law.  Your children who are under 25 or have a disability will be considered dependents.

You must be careful with nominations to children as there can be pitfalls, including:

  1. You cannot nominate nieces or nephews [invalid];
  2. If the children are under 25 and you have a spouse or an ex-spouse who is alive, that person will be considered the guardians and your super will be paid to them [to hold upon trust for your children until they attain the age of 18];
  3. Children who are over 25 are determined as not being financially dependent upon you, and if the super benefit is paid to them then they will be heavily taxed upon receiving the death benefit.
  4. The taxation consequences can be different for children depending on their ages at the time of your death, which will create an uneven division in real [net] terms;
  5. As long as your children are over the age of 18 years, the superannuation fund will pay an entitlement directly to nominated children, meaning you cannot protect that benefit for your children until they attain an older age.

If you intend for your super benefits to benefit your children, and any of the above issues are in concern in your current circumstances, one solution may be to nominate your Estate as the beneficiary [provided you have an up-to-date Will].  Your Will then controls the distribution of the super death benefits to your chosen beneficiaries and much can be done to reduce or avoid the tax consequences described above!

3. YOUR ESTATE

As mentioned, nominating your Estate is a great way to cover most pitfalls of superfund nominations.  Tax can be avoided or reduced where you have children under and over the age of 25, you can implement asset protection strategies for your personal and superannuation assets for your children, and you can distribute your super death benefits to third parties [who aren’t your spouse or child] through your Will.

The potential consequences of this option are that this can create a further delay between your date of death and the distribution of the superannuation death benefits, and it also has the effect of increasing the value of your estate.  If your Will is challenged after your passing, the superannuation benefits will form part of the asset pool which can be claimed against.  Some food for thought regarding the significant asset that is your superannuation.

So, maybe it’s time to review your superannuation nomination – and for the greatest benefit, we suggest reviewing it concurrently with your Will and Powers of Attorney.

Contact our Legal Team for an appointment to review your Estate Planning to find out how we can help.

 

Katherine Taylor – Solicitor

BCriminology [History], LLB

Buy Low Sell High

Buy Low Sell High is the first seminar in our free Property Seminar Series.

Buy Low Sell High is designed to provide an overview of the sale process, from engaging a real estate agent right through to handing the keys to the purchase.

We delve into:

  • WHO // you will need to engage to sell + why
  • WHAT // who does what, from the agent to the stylist right through to the broker + lender
  • CONVEYANCING // the general conveyancing process
  • SETTLEMENT DAY // what to expect + what happens if there is a delay
  • TRAPS + PITFALLS // that you should be wary of when consider to sell your property

So when the time is right to move on to your next dream home, selling your property for the best price will be a breeze!

Secure your FREE ticket through Eventbrite here.. https://www.eventbrite.com.au/e/buy-low-sell-high-tickets-75801936633

REFRESHMENTS INCLUDED + ALL CHILDREN WELCOME!

New Labour Hire Laws In Victoria

ATTENTION ALL BUSINESSES.. does your business or organisation use labour hire workers?  If this applied to you, then you need to be aware of the new labour hire laws that are now in place, and how they may affect you and your business!

 

Under the Labour Hire Licensing Act 2018, labour hire providers will have until 29 October 2019 to apply for and be granted a licence by the Victoria Labour Hire Authority to operate in Victoria.

Licences can be applied for from the Labour Hire Authority website.  These licences are valid for a period of no more than three years.

There is a test that needs to be satisfied to obtain and maintain a licence.  This is known as “fit and proper test”.  Businesses will need to prove past compliance with the applicable employment, tax, immigration and workplace health and safety laws.

To ensure compliance of the new licensing system, the Victoria Labour Hire Authority will employ inspectors.  These inspectors will be able to enter and search premises, examine, seize or inspect anything suspected of relating to a possible contravention.

KEY POINTS FOR BUSINESS OWNERS:

  • LABOUR HIRE PROVIDERS MUST REGISTER ONLINE TO CREATE AN ACCOUNT + then apply for a licence.
  • LABOUR HIRE PROVIDERS WILL HAVE SIX MONTHS, or until 29 October 2019 to register online + apply for a licence.
  • IF PROVIDERS DO NOT APPLY FOR A LICENCE within the six-month transition period, they will be prohibited from providing labour hire services from 30 October 2019
  • UNLICENSED LABOUR HIRE PROVIDERS CAN FACE SUBSTANTIAL FINES, with a maximum penalty for a natural person being more than $120,000 + for a corporation exceeding $500,000.
  • HOSTS [BUSINESS WHO UTILISE LABOUR HIRE WITHIN THEIR BUSINESS] who enter into an arrangement after 29 October 2019 with a labour hire provider who has not applied for, or who has been refused a labour hire licence face substantial fines ranging from a maximum in excess of $120,00 for a natural person to in excess of $500,000 for a corporation.
  • THERE IS AN APPLICATION FEE, + ANNUAL LICENCE FEE, payable by the labour hire provider.

If your business uses labour hire workers in Victoria, we recommend you begin enquiringly with the providers as to their intentions with respect to applying for a licence.

Please contact Canny Legal on 5278 9500 if you have any queries regarding the new Labour Hire regime.

Spring Clean Your Life Planning

Spring has sprung, the days are getting longer and the sun is getting warmer – if you haven’t already, you are likely getting out in the garden, cleaning the house, and planning your summer projects around your home and garden.

In all the excitement of improving your physical environment, spare a thought for your life planning; that is, your future estate, asset and tax planning – it is a great time of year to give these a freshen up too!

Your Will is an easy place to start.  We recommend that a review of your existing Wills should be undertaken every 5 years, or earlier, if your current circumstances change.  If you don’t have a Will, NOW is the perfect time to get that process started.

Aside from regular reviews, there are certain milestones which are ideal point to consider and update your Will.  If any of the following have occurred in the last 12 months, or are likely to occur in the next 12 months, a review is necessary:

  • ENTERING A NEW RELATIONSHIP
  • MARRIAGE
  • CHILDREN
  • PURCHASING OR SELLING PROPERTY
  • CHILDREN BECOMING ADULTS
  • RETIREMENT
  • ESTABLISHING A BUSINESS
  • BUSINESS OR TRUST CHANGES
  • RELATIONSHIP BREAKDOWN, SUCH AS SEPARATION OR DIVORCE

If any of the above scenarios have recently changed in your life, it would be a good idea to grab copies of your signed Will, have a sit down and read over what you have in place.  If you see anything which requires change, or you are unsure about the impact of a life event, come see our legal team and we will assist you with the review.

Another issue worth noting is how marriage, separation and divorce can affect your Will if you fail to update it.  Each has a different consequence, and failing to consider and update your Will and Powers of Attorney at the time can result in the wrong people being in control of, and entitled to, your hard-earned assets.

The key to good long-term life planning is to be prepared, and obtain advice before committing to a significant life, asset or business change [where possible].  This isn’t limited to Wills, as changes can also impact Powers of Attorney, ownership of assets [ie. if owned jointly with others], business structures and agreements and superannuation entitlements.

Contact our Legal Team today to get your Life Planning spring clean underway.

 

Kayla Kennedy – Solicitor

LLB

Estate Planning

I’ve often thought that ‘life planning’ would be a much more appropriate label than ‘estate planning’; estate planning is [and should be] so much more than simply planning for your death.

Of course, planning for how your assets should be dealt with upon your death by preparing a Will is an important component of the plan, but it only one component of what should be much broader life planning – and that planning should begin as early as possible.

Estate planning extends well beyond Wills, to incorporate Powers of Attorney, Superannuation, business ownership, trust structures, tax planning and broader family arrangements, all of which may have no effect until you are unwell or pass away, but should all be part of your planning whilst you are fit and well and enjoying life.

Your estate planning should be front of mind during many of life’s big moments, including the following:

  • PURCHASING A PROPERTY // planning should include how the property is owned, whether that is in your sole name, joint names with another person, or in the name of a company or trust. Getting this right will determine who can receive an interest in the property should you pass away, and can also avoid unnecessary stamp duty, tax and legal expenses in transferring the property down the track;
  • GETTING MARRIED OR SEPARATING FROM YOUR SPOUSE PARTNER // the joy of getting married, or the difficulty of a relationship breakdown, both have an impact on your estate planning. Prior to the event, you should be reviewing any existing wills, powers of attorney, superannuation arrangements, business ownership structures and the ownership of your own assets;
  • HAVING CHILDREN, OR YOUR CHILDREN BECOMING YOUNG ADULTS // your children are the centre of your world, and should also be the centre of your estate plan, whether that is to provide for the care and provision of your minor children, or to benefit and protect your adult children for the challenges in their own lives;
  • STARTING A BUSINESS, OR PLANNING YOUR TRANSITION OUT OF A BUSINESS // both extremely exciting times, and both requiring significant planning to ensure smooth operation of the business and treatment of key people within it.

For bonus points, great estate/life planning will combine elements of legal advice and documents, financial advice and accounting advice, which is addressed in a cohesive, open and organised manner.

 

For further information regarding estate planning, please contact us to receive a FREE copy of our ‘7 Steps to Estate Planning Guide’, and look out for future dates for our ‘Estate of Mind’ seminar series at https://www.eventbrite.com.au/e/estate-of-mind-tickets-66157682409

 

Stefan Manche – Senior Associate Solicitor

LLB, BComm

What To Consider When Making Specific Gifts in Your Will

What to consider when making specific gifts in your Will

When preparing your Will there are a number of things to consider such as who to appoint as your Executor, the beneficiaries of your estate and whether you wish to leave any specific gifts to a particular family member or friend.

A ‘gift’ can be anything from a particular item of jewellery to a sum of money.  Below it will be discussed the matters that should be considered if you want to leave a gift under your Will.

Firstly, you cannot gift an item if you do not own them.  This situation can arise where a property is held under a Self-Managed Superannuation Fund or under a Trust.  Another situation to mention is when an item is owned jointly with another person.  In this case, the surviving owner will obtain the asset upon your passing.  Consequently, if you gift an item that you do not own, or is jointly owned, will be ineffective under your Will.

Secondly, it is important to update your Will to ensure that if the asset you have gifted still exists when you pass away.  We understand that life happens and that items and assets are sold or given away during your lifetime.  Therefore it is important to update your Will if you know that you no longer hold an asset.  However, if you have made a gift that is no longer in your possession, the direction in your Will would be ineffective and result in the recipient not receiving the gift.

Finally, if you wish to gift a particular asset or item under your Will, it is important to consider these items are properly described.  It is recommended to provide adequate detail when describing your asset to ensure your wishes are consistent as under your Will.

If you wish to discuss your Will, please do not hesitate to contact our friendly Canny Legal team.

 

Kayla Kennedy

Law Clerk

 

 

 

PPSR – Personal Property Securities Register

Hidden interests…buyers beware!

Persons who obtain finance, more commonly commercial, car or personal finance, a security interest is generally registered on the Personal Property Securities Register known as the PPSR.  In doing so, they are securing their interests on the borrower’s personal property, such as cars, boats, plant and equipment, but does not include land, certain licences and a few other exceptions.  While registration of a security interest is not compulsory, a financier (secured party) may lose its priority to the personal property if it is in competition with other security interests.

If you are looking to purchase business, plant, equipment, car, boat, trailer or the like, a search of the person and/or company in ownership of the property is a must as part of your due diligence.  At settlement and transfer of the property you have a right to clear and free possession of that property from the seller.  If the personal property is under finance and the PPSR charge is not released when the property is transferred to you, the financier has a right, in the first instance, to repossess the property should the seller default on their loan arrangement.  It is important that any security interests are discharge prior to the property being transferred to you.

The PPSR is a single national register for personal property security interests and an online noticeboard of the particulars of a security interest for a particular individual or company.

Follow the link below to find out more information about the PPSR: https://www.ppsr.gov.au/ppsr-overview

If you wish to discuss your own secured property or that of a sellers please contact our legal team on 03 5278 95000 or email legal@cannygroup.com.au

 

Katherine Taylor – Law Clerk

BCriminology (History)

Casual Conversion Rights

Often our business clients want advice on putting into place employment arrangements that are flexible in the form of casual employment arrangements that may also suit employees.

At times the business may want confidence in the employee’s performance before considering a full time contract or the business may be approached by a casual employee who seeks to be converted to full time employment after working regular hours.

In September 2018 the Fair Work Commission (FWC) turned its attention to the question of “Casual Conversion” and the employer’s obligation to convert a causal employee working regular hours to full time or part time permanent employment.  From 1 October 2018 the FWC varied many awards to include this right.  Subject to certain prerequisites in many circumstances (that is 84 Modern Awards in addition some 28 Modern Awards that already contain the right) an employee has a right to request casual conversion to permanent employment.

The rights is subject to the casual employee working a pattern of hours over the previous 12 months that they could continue to perform on a full time or part time basis under the provision of the applicable award.

Subject to the formalities such as the request being in writing the employer may refuse only on reasonable grounds such as: the employee is not working regular hours; it is known or reasonably foreseeable the employee’s position will end; it is known that the employee’s hours will significantly reduce in the next 12 months.  Any such ground must be provided to the employee in writing in 21 days of the request being made.  If the employee disputes the alleged facts or claimed reasonable bases, the dispute will be heard at FWC.

Accordingly business are not required to offer employees under relevant Modern Awards permanent employment and the casual employee’s right depends on the facts determining regular employment over the preceding 12 months.  If casual employees prefer flexibility and 25% higher pay they will not exercise this right.

If you would like more information, or to find our how we can help – please get in touch with our team.

 

Richard Pinkstone – Principal Solicitor

BA, LLB

New Year Resolutions that Will Make A Real Difference To You + Loved Ones

Now that the dust has settled on what was hopefully a fun-and-family-filled Christmas and New Year period, it is a great time to reflect on those hastily-made New Year’s resolutions, and consider the difference it will make if you actually see them through.

Perhaps you resolved that in 2019 you will exercise more, quit smoking, drink less, or spend less time looking at your phone.

For others, you may have decided that 2019 is the year you get your personal, financial or business affairs in order. That may include getting those Wills and Powers of Attorney prepared (which you’ve been meaning to do for years), getting that accounting or financial advice you know will make a difference, or kick-starting that business which you’ve been daydreaming about.

Now these are New Year’s resolutions that will make a real difference to you, your loved-ones, your financial health and your current/future employees.

The most important part is getting the process started. The second-most important part is making sure that each of the elements of your plan complement, and do not contradict each other. For example, the superannuation or asset planning which you undertake with an accountant or financial advisor should be reflected in your will, your business plan should be supported by adequate funding arrangements and succession agreements, and your business tax planning and compliance must be complemented by appropriate employment agreements for your staff.

Ideally, this means you should be seeing a lawyer, accountant and financial adviser contemporaneously, and have them talk to each other to ensure each element is consistent. But who has the time and energy for that?

This is where Canny Group can help you stick to your New Year’s resolutions. We have a team of experienced accountants, lawyers and financial advisers under one roof who are ready to listen, identify your needs or the needs of your business, and work cohesively to get your affairs in order, or your dream off the ground, for the best possible start to 2019.

 

Stefan Manche

Senior Associate Solicitor – LLB, BComm (Finance) 

Estate Planning for Blended Families

The term ‘blended family’ generally describes a family where either one, or both, parties to the current relationship have a child or children from a previous relationship, and may also have children together in the current relationship.

As you can imagine, estate planning can be a challenging task, both for the client and the advisor.  When thinking about your future and providing for your family after you have passed away, the role of your solicitor is to understand your wishes and assist in ensuring that you provide adequately for your spouse, the children of your current and previous relationships and any other dependents.  A key focus is often structuring your estate plan to avoid potential claims against your estate or other issues, and balancing this with your wishes.  It will often also encapsulate elements of tax planning to ensure that the benefit received by your family is not diminished with unnecessary tax or other duties or liabilities.

Depending on your individual circumstances and wishes, your solicitor may suggest the use of one or more of the following strategies as part of your blended family estate plan:

  1. BINDING FINANCIAL AGREEMENT

A binding financial agreement is an agreement between you and your current spouse detailing how each other’s assets are to be divided between the family in the event that the relationship ends.  The agreement may include different outcomes depending on the length of the relationship.  If proper formalities are met (such as each party receiving independent legal advice as to the impact of the agreement on them personally) then the agreement will be legally binding.  The terms of any such agreement should then be mirrored in the wills of each party.

  1. WILL CONTENT

Your will is central to your estate plan, and there are a number of mechanisms which can be included in your will to ensure that your spouse, children from your current relationship and children from a previous relationship are all adequately provided for.  Some of the more common mechanisms are the creation of a testamentary discretionary trust within the will, or a portable life interest or right to reside in a particular property.  These are strategies which provide a benefit to a person or multiple persons in the estate assets (usually the spouse), without actually transferring control or ownership of the asset to them, so that upon a designated time or event, that benefit will end and the control or ownership then passes to another party (usually children from a previous relationship).

  1. MUTUAL WILL AGREEMENT

Less restrictive then creating a trust or life interest, a Mutual Will Agreement is an agreement signed at the same time a couple makes their wills, with purpose of the agreement is to impose obligations on the surviving spouse to not change their will, even if they subsequently re-partner.  This generally ensures that all children of the parties (from the current and previous relationships) are provided for in the manner that the parties agreed, and can be enforced by the children should the surviving spouse change their Will to the detriment of the children.

  1. USE OF EXISTING STRUCTURES AND ASSETS

If may also be possible to use existing structures (such as a Family Trust or Self-managed Superannuation Fund holding valuable assets) to provide a benefit to particular parties outside of the Will, by transferring control of those entities either during your lifetime, or upon your death.  Another option may be to transfer assets to a particular person during your lifetime, or to change the ownership of the asset (such as a property) such that it will transfer to the intended beneficiary automatically upon your death (ie. by survivorship).  The benefit of such planning is that assets held in trust structures, held jointly or gifted by you during your lifetime will generally fall outside of those which can be claimed against by challenging your will.  However, there will also be potential control, stamp duty and tax consequences to be considered and therefore individual advice is required to ensure the best outcome for your situation.

The best outcomes for blended families are obtained when your family circumstances and individual wishes are considered carefully and holistically, to allow the most suitable combination of the above tools, structures and planning to be implemented.

If you wish to discuss your family estate planning please do not hesitate to contact our friendly Canny Legal team.

 

Kayla Kennedy

Law Clerk

Debt Recoveries

The world of business dealings is underpinned by trust and reliance on promises to supply goods or services often with the consideration such as payment of money, a debt being due sometime in the future.  Once a contract is legally enforceable, the Court will, if the contract is breached, allow the injured party to seek recovery in the Courts.

Canny Legal regularly act in “debt recovery” proceedings.  Some claims may be very simple such as a failure or refusal to pay monies on account.  However in the cut and thrust of business dealings, contracting parties may have complex arrangements to reach out to potential customers and rely on more complex trading terms.

Suppliers may offer their customers credit terms reflecting their trade requirements.  For example a plumber may have a business which has many projects under way and needs plumbing supplies to compete works before it gets paid from expected future profit.  The supplying company may agree to trade on credit with interest which should also be secured by a personal guarantee and a charge over the director’s property. In this scenario we often find our client’s customers may “bite off more than they can chew” and default in their accounts resulting in debt recovery proceedings.

On the other side of the fence we also act for defendants against claims for monies due and owing and we will explore any genuine defences available to defeat the claim or reduce it by way of set-off.

Debt recovery requires the careful weigh-up of a return for recovery on a debt as against time, legal costs and the uncertainties of litigation.  There will be a range of facts to consider before being able to assess and legally advice on the merits of each claim or each defence.

If you would like more information, we are always here to help.  Please get in touch with our team.

 

Richard Pinkstone – Principal Solicitor

BA, LLB