Blog Post

Memo to Accountants: Warning Signs That Your Client May Be at Risk

Website Team Technicians • February 22, 2019

Professionals should be aware of the warning signs which may mean that their client’s affairs are not in order should they die. It cannot be taken for granted that the client’s know of the potential risks, even if they ought to be aware of those risks. In some cases, sophisticated clients may overlook an aspect of their financial affairs which may lead to trouble at a later stage.

Here are four signs that your client may be at risk:


1. Business and Personal debts and assets are intermingled

Many clients, especially those who are owners of a small business operated through a company or discretionary family trust, are unaware of the risks of intermingling personal and business assets.

It is all too common for a client to refer to the company car as ‘my car’, or for a person to pay company expenses on a personal credit card or vice versa. Assets held through these entities cannot be dealt with through a will but typically a client will refer to those assets as ‘my property’.

A company and assets held by a family trust belong to that company or family trust. It is necessary to deal with those assets by transferring the shares in the company or, in the case of the trust, by transferring control of the trust to the intended recipient.

Consideration must be given to the financial statements of the family trust to see if there are any beneficiary loans either payable to the client (which then become debt payable to their estate) or other persons.


2. There is no business or personal succession plan

Astonishingly, most people do not have a current will or business succession plan. There are a myriad issues that might arise where a person dies without an up to date and validly executed will.

By way of example, a client may be the trustee of a discretionary trust and control a beneficiary loan account. But is the client aware of what will happen to the control of this account if they were to die? Have they taken steps to ensure that this account is properly dealt with after their death?

3. Your client is a Parent of a ‘Blended family’


A ‘blended family’ arises when either party has children from a previous relationship.

If a client is parent with a blended family, and has not properly taken estate planning into account, he or she may be at risk of losing control of how his or her assets are dealt with after his death. These situations are often complicated by the extent to which children were seen to be the children of both parties.


Estate planning for blended families is not straightforward and requires the client to think about possible issues that can arise after they die. For example, what is to stop the existing spouse to changing their will so as to omit client’s own children in favour of their own?


4. SMSF Disputes

Many people do not understand that superannuation does not automatically form part of the estate pursuant to a will. Super is held by the superannuation trustee, and not by the individual person.

The super may be directed to the preferred beneficiary by way of a valid binding death benefit nomination. Most super fund require that death benefit nominations be renewed every three years for a corporate superannuation. A self-managed superannuation fund trust deed may be amended so to include a non-lapsing binding death benefit nomination.

Otherwise, the trustee has the discretion to decide what happens your superannuation. Cases repeatedly show us that even though super has been left to beneficiaries named in a will, the trustees of the super fund will usually pay any death benefit to a ‘de facto spouse’, even if the status of that person as a de facto spouse is not accepted by others.


This entry was posted in Uncategorized on September 5, 2017.

By websitebuilder March 13, 2024
The recent case of Diedler v Borowiec 2023 WASC 396 is perhaps a cautionary tale for those beneficiaries of a doubtful will. The Deceased made a will with the Public Trustee in 2018. At the time he has 97 years old. For all intents and purposes, when the will was prepared, the Deceased appeared to have capacity- he lived independently, drove his own car (!) and managed his own finances. He did not want his step son and his own daughter to benefit from his estate. Following a trial , a judge found that the Deceased suffered from delusions at the time he made the will including a belief that his daughter was a witch, was trying to poison him. That she was practising witchcraft and that she flew through his window and was stealing items form him. In fact there had been concerns about his mental health for a least five years prior to him making the will. Following his death, the Public Trustee obtained medical reports and came to the conclusion that the 2018 will was invalid. However, the beneficiaries of the 2018 will were not happy with that decision and decided to seek proof of it by issuing proceedings in solemn form in the Supreme Court of Western Australia. Having lost the case, the question arose as to who should pay the solicitors costs. The court found that, having regard to the medical evidence, it was unreasonable for the beneficiaries of the 2018 will to have sought to prove it. Several offers of settlement (‘Calderbank Offers’) had been made by the beneficiaries of an earlier (1981) will, all of which had been rejected. The court ordered that the Plaintiffs (the beneficiaries of the 2018 will) pay the Defendants costs on an indemnity basis. Those costs would no doubt be very substantial. Although the person seeking to propound the will may have a honest (bona fide) belief that the will is valid, the belief must also be reasonable. On the facts, with the available medical evidence, the court found that the belief was not reasonable and the Plaintiff should bear not only their own legal costs but also the Defendants. As a point of reference, in the Victorian case of O’Donoghue v Mussett [2008] VSC 63, the Plaintiff’s costs were $250,000 up to the third day of a trial. The Defendant’s costs would be similar, so it becomes a very expensive exercise and not on to be lightly undertaken. If you need advice concerning the validity of a will, contact us now.
By websitebuilder August 22, 2022
Great care must be taken when drafting a will to cover the situation where you have assets in different countries. Generally speaking, if you make a will in Australia (or in any other country) it will deal with all of your estate wherever situated including land held in any country (such as, for example, in the UK or India). This would require, upon your death, for a grant of probate to be obtained in Australia to deal with the Australian assets and then for that grant to be ‘resealed’ in the other country to deal with the assets in that country. This is a straight forward process in countries that are "One of Her Majesty's Dominions" but may be more difficult in other countries that have different systems of law. There may be situations where it is preferable to have two wills, one for each country where the assets are held. For example, it may be appropriate to appoint an Australian executor to deal with the assets in Australia and a will appointing a UK executor to deal with the assets in the United Kingdom. Particular care should be taken when preparing such wills. We would recommend that only an experienced solicitor be engaged (in each country) and the solicitor preparing the second will should be given a copy of the will made in the other country. An example of what can go wrong can be seen in Sangha v Estate of Diljit Kaur Sangha 2022 EWHC 2157 Ch . There, the deceased had assets (about £35m worth) in both the UK and India and made a will in India in 2016 that had a (standard) revocation clause (to the effect “I hereby revoke all prior wills”). The question arose was did this revoke an earlier will made in the UK in 2007 that left all of the Deceased’s UK property to his second wife. In the event it was held (on appeal) that the Indian will made in 2016 did not revoke the earlier 2007 UK will. Such a situation could have been avoided altogether if the Indian will had expressly stated “I revoke all my previous wills including any will made by me dealing with my estate located outside of India” or (if that was not the intention) “I revoke all my previous wills except any will dealing solely with my estate in the United Kingdom’. If you need help preparing a will, please contact us on 08 9398 5533 .
By Website Team Technicians February 22, 2019
Learn how ending a de facto relationship affects your will. Biddulph & Turley explain legal considerations and the importance of updating your estate plans.
By Website Team Technicians February 22, 2019
“The making of home-made Wills can lead to problems. That statement is not a paid advertisement for the legal profession. It is a statement of fact. This case illustrates the point.” Per Master Sanderson Epps v Homer [2006] 290 The Background Mr and Mrs H. were married in 1986. Mr H. had three children from a previous marriage. Mrs H. had four children from a previous marriage. Mr H. got a will kit from a newsagency and drafted wills. What they wanted to achieve It appears that what Mr H and Mrs H wanted to achieve was: i) to give certain specific items to their respective children; ii) Mr H gave $15,000.00 to be divided between his children; iii) The remainder of their estate (‘the residue’) was to go to the survivor of them; iv) Upon the death of the survivor of them (that is when the last of them died) the residue was to be split 50% between Mr H’s children and 50% between Mrs H’s children. A perfectly straightforward and reasonable arrangement for blended families. What the will said After the arrangements described in (i) and (ii) above Mr H.’s will said: “BUT IN THE EVENT THAT MY WIFE …. AND MYSELF SHOULD PASS AWAY AT THE SAME TIME (emphasis added)….. I LEAVE ALL THAT PART OF MY ESTATE BEQUEATHED TO MY WIFE TO OUR CHILDREN, FIFTY PERCENT (50%) TO BE SHARED EQUALLY BETWEEN MY NATURAL CHILDREN, AS PREVIOUSLY NAMED, THE REMAINING FIFTY PERCENT (50%) TO MY STEP CHILDREN, TO BE SHARED EQUALLY” (between them). The Problem Mr H. died in 2004. Mrs H. had died in 1998 (six years before). They had not died “at the same time” as contemplated in the clause in the will. The question was, did the wording of the will have the effect that the residue of the estate would be split 50/50 in these circumstances? The court said no. The words used were unambiguous. Mr and Mrs H. had not passed away “at the same time”. There was a six year gap between their deaths. What Mr and Mr H had really meant to say was “If (my wife or husband) does not survive me to divide the residue of my estate equally between those of my children and my (wife or husband’s) children.” The unhappy or happy result (depending upon your point of view) The clause in the will failed. There was an intestacy of the part of the will dealing with the residue (which was most of the estate). According to the rules of intestacy, Mr H.’s children were entitled to all of the remainder of his estate and Mrs H’s children missed out- step children are not a person’s children unless they are legally adopted. This entry was posted in Uncategorized on February 19, 2016.
By Website Team Technicians February 22, 2019
Understand the validity of unsigned wills in Australia. Learn when courts may accept them and the importance of proper execution for your estate.
By Website Team Technicians February 22, 2019
Ten Most Common Mistakes Made with Wills and Estate Planning 1) Not having a will. If you don’t have a will, then you are leaving a problem behind for everyone. This applies even if you situation is ‘simple’ and doubly so if you die leaving a second wife or de facto and children from a previous marriage or relationship. Any will is better than no will. 2) Making your own will. It may be that you are able to make a simple will quite easily. However, if you are making a simple will, make sure you have a simple situation. A ‘blended family’ is never a simple situation. Nor is it simple if you own a business, have a farm (or other significant property). 3) Not understanding that your wishes can be over ridden by a Court. More specifically, this means not understanding that certain groups of people (spouses -including de facto spouses, children – including adult children that you are estranged from) are entitled to provision from your estate. It doesn’t matter that you have had little contact with your (now adult) children since you got a divorce (or for whatever other reason). What matters is that you make ‘adequate and proper’ provision for them. This is not what you decide is ‘adequate and proper’ but what a court thinks. 4) Thinking that you are not in a de facto relationship. It doesn’t matter what lengths you go to (keeping finances separate, keeping separate residences for Centrelink purposes etc). It doesn’t matter that YOU think you are not in a de facto relationship or even if you and your partner both think you are not in a de facto relationship. What matters is whether a court decides that you are in a de facto relationship. 5) Not understanding the difference between joint tenancy and tenants in common. Joint tenancy means that, when one co-owner dies, that persons interest in the property passes authomatically to the survivor. It doesn’t matter if the will says something different. Joint tenancy is great where it is intended that the property goes to the surviving spouse (as it means that no grant of probate is required). However, if there are children from a previous relationship that you wish to benefit, joint tenancy may mean they miss out. 6) Not understanding that Superannuation is not dealt with by your will. If you are a member of a public or industry fund, the trustee of the fund must pay any death benefit according to: a) any Binding death benefit made by you (this can only be to a spouse, a child who is financially dependent upon you or to your estate); b) A ‘financial dependent’. This includes a de facto (see point 4), children and persons who were otherwise financially dependent upon or in an “interdependency relationship” with the Deceased. It may or may not include step children (fact specific). There are many, many cases where the superannuation is paid to a ‘girlfriend’ (who no-one else believes is a de facto) and not to parents or siblings. A SMSF must also be dealt with by the terms of the Superannuation Deed (and not your will). 7) Not understanding that assets held in companies, trusts or partnership are not assets that can be dealt with by your will. 8) Leaving making your will too late If you make a will when you are very elderly or ill, you greatly increase the chance of a challenge on the grounds that you lacked testamentary capacity when you made the will. 9) Not keeping your will safe and where it can be found after you die. All too often the original will cannote be found after you have gone. 10) Thinking it is all too hard. See point 1. This entry was posted in Uncategorized on August 7, 2016.
By Website Team Technicians February 22, 2019
Biddulph & Turley recognized in Doyle’s Guide for excellence in family law and deceased estates. Trusted legal experts serving Perth and beyond.
By Website Team Technicians February 22, 2019
Stay informed with Biddulph & Turley's Perth Family Law Blog—insights on wills, estates, child support, and property division.
By Website Team Technicians February 22, 2019
Biddulph & Turley assist clients in challenging superannuation death benefit decisions through the Superannuation Complaints Tribunal, offering expert legal support.
By Website Team Technicians February 22, 2019
The very recent decision in MILLS -v- PILLER [2017] WASC 45 confirms a recent run of unsuccessful claims in the Supreme Court of Western Australia. The facts were that the Deceased died age 83. She was dviorced and left five adult children who were all in their 50’s. The Applicant was the Deceased’s daughter aged 55. She was unemployed. She had no assets to speak of. She was not married or in a de facto relationship. However, she and her adult daughter had lived with the Deceased since 2012 (approximately 3 years before the Deceased died. The Applicant received Centrelink Benefits including the ‘carer’s pension’ for looking after the Deceased. The Estate had a net value of about $2.2 million (mainly comprising two properties, one of which was the residence in which the Applicant resided with the Deceased). This meant that each of the five children would get about $400,000.00 from their mother’s estate. Position of Other Beneficiaries. One sister was aged 60, was married and earnt $65,000 pa. Her husband was a concrete labourer. They had a house worth $850,000 with a mortgage of about $492,000. Another sister was 58, separated from her husband and had a salary of $88,000 pa. She had some super ($95k), a car and savings of about $30k. She had agreed with her husband that she would keep the former matrimonial home (worth about $900k) and pay him $490k. A brother was aged 59, worked as a ‘brickies labourer’ three days a week earning $228 per day. He had super worth about $80k and a $3,000.00 car. He had debts of $53,000.00. He also expected to inherit 80% of a house owned by his father’s estate (upon the death of the life tenant). The youngest brother was aged 52. His assets were said to be worth about $262,000 and his liabilities were $16,500. He earnt about $60,000.00 a year. Financially, the Applicant was in a worse position than her siblings. She wanted $650,000 to be paid to her from the estate (including the $400,000 she was entitled to under the will). It was put on her behalf that this would be used to fund the purchase of a house for her to live in. The Decision. The Court found that the provision made in the will did not fail to make ‘adequate and proper provision’ for the Applicant. The court said there were a number of factors that weighed in her favour (the fact she was not married, had not worked for some time, had various ailments, did not have an extravagant lifestyle and had limited reserves). However, weighing these factors up against the competing interests of her siblings (who also suffered various ailments and had ‘liabilities and modest or little superannuation’) there could be no justification for depriving the siblings of their inheritance. Comment. Most members of the community would be of the view that a will that divides an estate equally between a person’s children is a ‘fair’ will and a proper one in all the circumstances. Parents tend to give each of their children an equal start in life. Some children do better than others. The ones that do less well sometimes have an expectation that the parents will ‘make the appropriate adjustment’ in their will to ‘level things up’. This case perhaps illustrates the proposition that a court will not lightly interfere with such a will. There would have to compelling reasons why such a will should be departed from (for example, if the Applicant had severe health problems and/or had devoted substantial time and effort in looking after the Deceased and the other beneficiaries were very well off). None of those factors were present in this case. If you are considering challenging a will (or defending one), please contact us. This entry was posted in Uncategorized on February 24, 2017.
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