Updates

Attorney-General Argues a Sperm Donor is a Parent – what does this mean on death??

The term ‘parent’ is currently expressed under the Family Law Act (Cth) to mean a child’s biological parent, unless there is express provision for an alternative.

Sperm donors in Australia have never been considered as the parent of the child and not named on the birth certificate, unless they were married or in a de-facto relationship with the mother at the time that the child was conceived. Under the Status of Children Act 1974 (Victoria), there is a presumption of law that if a woman becomes pregnant from an IVF procedure and a child is produced and born as a result, the man who produced the sperm is not the father or a parent of that child.

The Federal Attorney-General, Christian Porter, has recently intervened in a High Court case involving a Newcastle man Robert Masson, who has been trying to stop the mother, Susan Parsons, of his biological daughter from relocating with the child, who is now aged 12 years, to New Zealand.

The pair had been friends for 25 years when they mutually agreed to Mr Masson becoming a donor to Ms Parsons, in order that she could conceive a child though an ‘informal artificial insemination procedure.’

The Attorney-General has argued that the term ‘parent’ should be expanded to include donors in certain cases who are not married or in a de-facto relationship with the mother prior to conceiving the child, but who are known to that mother.  Will egg donors also be considered in the same manner?

On death, in Victoria, the term parent is currently defined under that Administration and Probate Act 1958 to include a person who has day to day care and control of the child and with whom the child is ordinarily resident.  The definition does not provide any assistance as to who else may be considered a ‘parent’ for the purposes of death.

If the Family Law Act definition of a parent is expanded to include sperm donors in certain circumstances, what impact will this have on the interpretation of a Will, when a parent is included as a beneficiary of that will?  What about on guardianship laws if the other biological parent has died and the child concerned is still a minor?  If there is no Will, on the operation of the intestacy rules, it is a possible that the sperm donor, who may be considered as a parent, could receive that child’s (even an adult child’s) entire estate!  If the ‘sperm donor’ parent has died, does that mean that the child can then contest that parent’s will?

In light of the proposed changes, careful consideration should be given to the drafting of your estate planning documents.

Law Institute of Victoria Supports National Power of Attorney Registry Scheme

Making an Enduring Power of Attorney (EPOA) enables individuals to plan for the future, however, as much as everyone has the right to make their own decisions, there may come a time where you do not have the capacity to make your own decisions, whether it be due to an injury or illness.

By making an Enduring Power of Attorney, it allows you to appoint a person or persons who you trust to make certain decisions on your behalf.  You are eligible to make an Enduring Power of Attorney if you are aged 18 years or older and have the requisite capacity to do so.

The Law Institute of Victoria (LIV) has recently introduced their support of a national register where it will provide a reliable source for individuals to efficiently verify that an Enduring Power of Attorney is valid and current, which can minimise the incidence of the Enduring Power of Attorney document being misused for financial abuse purposes.

Far too often we see in practice, a scenario whereby a bank teller is presented with a power of attorney document (even if it has since been revoked or superseded) and happily acts on that basis without seeking to verify that it is, in fact, the current power of attorney document.  The introduction of a national register would certainly prevent such a scenario from occurring.

However, there is debate over the design of the register, as, given that it will contain private and confidential information, such as details of a person’s bank accounts and properties, it will need to deal with the issue of what information can be made publicly available or only made available to a registered user who will then pay a fee to view the document and information.

A similar registry system already exists and currently operates in Tasmania with their Land Titles office, where these documents are available to third parties and there is reliance on the register to then determine validity of the document.

We are in total support of the implementation of such a national registry and we will keep you updated as to any developments in this regard.

The Importance of Having an Up-to-Date Will

We are seeing a disturbing new trend where there are more people dying in Australia without leaving a valid Will.

Which leads us to the next question…do you really need a Will?  A Will is a way for you to provide clear directions as to how you wish to leave and divide up your hard-earned assets on your death.  Without a Will, you cannot decide who will control your affairs on your death, who will take care of your minor children, you cannot make gifts or donations or benefit those people that you wish.  In a blended family situation, dying without a Will cannot often result in expensive and emotionally fraught litigation on that person’s death.

When should you update your Will?

 A new Will should be made in the following circumstances:

  • Acquiring new assets (e.g. a new property);
  • Disposing of assets;
  • Marriage;
  • Separation;
  • Divorce;
  • Addition of new family members (birth of children or grandchildren);
  • Children becoming adults;
  • After the death of a beneficiary listed in your Will; and
  • The commencement or disposal of a business interest.
  • What happens if you die without a Will?

 

You are deemed to have died intestate and the succession laws of the state or territory in which you are considered domiciled, will determine the succession of your assets.

For example, if you die intestate in Victoria:

  • In a nuclear family scenario (husband/wife + children to that relationship) = all estate goes to surviving spouse in first instance
  • In a blended family scenario (second spouse and children not of that spouse) =

second spouse receives a statutory legacy (currently $451,909), all personal chattels and half of the balance of the estate with the children from another relationship to share in the remaining half of the estate

  • Complex division if more than one spouse/partner of deceased and children

It is advisable to have your Will reviewed at least every 5 years.  It does not mean that you will necessarily have to incur the expense in preparing a new Will, but it is a good timeframe in which to check in and see that your Will is still appropriate in your present circumstances.

The Government’s My Health Record and Estate Planning

There has been a lot of media publicity of late around the issue of whether or not people should opt in or out of the Government’s somewhat contentious My Health Record which comes into full effect on 31 January 2019.

The My Health Record is an online summary of your key health information, which can be viewed online, by yourself and any of your health providers.  You can manage your My Health Record and even add the details of an advance care plan to such record.

You will be able to set up privacy and security settings to enable or restrict certain people and/or health providers from having access to some or all of your health history and/or any documentation.  Importantly, you will be able to see who has accessed your My Health Record.

From an estate planning perspective, the My Health Record is another form of digital asset that you will now need to decide who you give access to on your death.

In addition, if one of your attorneys under a Power of Attorney document has access to your My Health Record and notes that a doctor has stated that you have lost capacity to make decisions for yourself, it may invoke the operation of a Power of Attorney much earlier than it otherwise would have, especially if the extent of your capacity has not yet been fully ascertained.

CONTESTING A WILL AS A ‘PARTNER’ AND CLAIMING CENTRELINK ALSO – BE AWARE!

On 17 October 2018, a great-grandmother in Geelong, Victoria, Noel Newling, was sentenced to two years and 10 months jail for concealing her relationship with a wealthy share trader for more than 20 years, whilst claiming a single pension.

The woman was forced to concede her relationship status in a bid to contest her partner’s Will who died in 2016 with an estate worth in the order of $4 million.  A judgment has not yet been handed down by the Supreme Court of Victoria in respect of this case.

The Human Services Minister, Michael Keenan has advised that irrespective of a person’s background or age, there will be consequences.

Many people who contest a will are those who claim they were in some form of domestic or de-facto relationship with the deceased person at the time of that person’s death.  Often, however, such claimants have been claiming Centrelink pensions for many years as a ‘single’ person.  Similarly, the deceased person may have also been claiming a ‘single’ pension during his or her lifetime.

Therefore, bringing a claim for further provision from an estate should be carefully considered in circumstances where such a fraud has been committed.  Not only could it result in monies being repaid to the government by the claimant but also that person being jailed, but also, monies could become repayable by the deceased person’s estate to Centrelink.  Nobody wins!

THE IMPORTANCE OF MAKING A WILL HIGHLIGHTED – NSW MAN GRANTED OWNERSHIP OF A HOME UNDER A DECEASED ESTATE BASED ON SQUATTING LAWS

On 30 October 2018, the Supreme Court of New South Wales granted a Sydney Property Developer, Mr Bill Gertos, ownership of a $1.7 million home in Ashbury, New South Wales, based on NSW squatter laws.

The interesting part is that the home was originally owned by a man named Henry Thompson Downie, who died in 1927 without leaving a Will.  At the time of Mr Downie’s death, the Ashbury property was rented out to a tenant, who paid a nominal rent, until the time of her death in 1998.

Mr Gertos stumbled across the property after the death of the long-term tenant and observing that it was uninhabited and delipidated, he decided to take possession of the property and undertake various works and improvements to the property.

Although distant relatives of Mr Downie recently attempted to contest Mr Gertos’ application for legal ownership of the property, the NSW Supreme Court granted ownership to Mr Gertos based on the fact that Mr Gertos had essentially ‘squatted’ at the property for nearly 20 years and, under NSW adverse possession laws, after 12 years of essentially inhabiting a property, that person could claim adverse possession of the property.

If Mr Downie had left a Will which appointed certain people, such as family members, friends or independent trustees, to be the executors and trustees of his estate on his death and, further, he had properly dealt with the issue of what would happen to the property on his death, it is very unlikely that any person, such as Mr Gertos, would have been in a position to just walk by the property and gain ownership!

CAN I LEAVE MY INHERITANCE TO MY PET???

I often get asked by clients whether they can leave all or any part of their inheritance to their pet or pets.

Although there are an estimated 24 million plus pets in Australia and, for many Australians, pets are their most treasured asset, you cannot legally leave your estate to your pets in Australia.

By contrast, in other countries around the world, such as in the US and in parts of Europe, you can bequeath your inheritance to your pet or to a trust fund established for your pet.  In Italy, in 2011, a 94-year old lady bequeathed her entire $15.6 million estate to her cat.  In 2007, American real estate mogul Leona Helmsley left her dog $2 million out of her $12 million estate – more than what she left to two of her grandchildren!

Under Australian law, animals are considered property.  If you die with a Will and you do not specify in that Will what is to happen to your pet, such pet will form part of your residuary estate and pass to those beneficiaries.  By contrast if you die without a valid Will, your pet will pass to your next of kin on the basis set out in the intestacy laws of that particular jurisdiction.

Which begs the question, how do you provide for your pet under your Will in Australia?

  1. Gift your pet to a friend or charity; or
  2. Gift your pet to a friend or charity and provide that friend or charity with a sum of money under your Will in order that they can provide for the care and ongoing maintenance of your pet; or
  3. Gift your pet to a friend or charity and establish a trust under your Will where your trustee holds funds to be provided to a person or charity for the benefit of your pet, such as to provide for their food, veterinary and ongoing care expenses.

THE NEXT ROYAL COMMISSION WAVE – AGED CARE QUALITY AND SAFETY

On 16 September 2018, Prime Minister Scott Morrison announced the Government’s decision to ask the Governor General to establish a Royal Commission to investigate the quality of care provided in residential and home aged care to senior Australians and to young Australians with disabilities living in residential aged care settings.

Since the announcement was made, some shocking facts have been revealed in relation to the quality of care provided in some of our aged care facilities:

  • Dangerous antipsychotic medicine being overprescribed to elderly residents which can lead to premature death and damaging side effects;
  • Residents not being fed or showered daily due to understaffing;
  • The restricted usage of incontinence pads; and
  • Physical and emotional abuse being administered by some carers to these vulnerable patients.

This caused me to begin thinking about what I would want for my own care in such circumstances, should the need arise.

We have an ageing population and Australians are living longer.  That being the case, it is important to consider what it is that we would want not only for ourselves, but for our partners, our parents, our children should there be a requirement for assisted care at some point in time.

At iWills Legal, we are observing an increasing trend to stipulate in the relevant Enduring Power of Guardianship or Enduring Power of Attorney for personal matters documents, a requirement that that the donor of such power never be placed into an aged care facility, but rather, that their funds be utilised at that time for the purpose of improving their home in order that they can remain living there and, further, to enable the payment of carers, nurses and/or doctors to provide any relevant care within the home.

Depending on what the outcome of this Royal Commission may be, we will probably see more and more people take up this approach.

THE RISING CELEBRITY TREND – DEATH WITH NO WILL

Aretha Franklin, the queen of soul, died without a Will on 16 August this year, survived by four adult sons who were to benefit from her estate on intestacy.  However, an on and off again partner of Aretha’s is now seeking a slice of her estate!

Similarly, another legendary singer Prince, who died in April 2016, leaving an estate worth about $200 million but no Will.  Although, under the relevant intestacy laws of Minnesota, a Court declared that his six siblings were the entitled beneficiaries to his estate given that he was not survived by a partner or children, several people have since made a claim on his estate, including individuals purporting to be his earlier unknown wife, sibling, child and distant relative.

Unfortunately, leaving no Will or an invalid Will can often lead to a will dispute (sometimes referred to as a will contest) which stalls the distribution of the estate and, further, results in the diminution of the estate because of the incurrence of legal fees.

Each state and territory in Australia have different rules in relation to who can contest or bring a claim for further provision from the estate.

For example, in Victoria, to contest an estate (whether there is a valid Will or not), you must be an eligible applicant and be able to demonstrate that you have been left without proper provision by the deceased for your maintenance and support.  The class of eligible applicants are as follows:

  • Spouse at the time of death.
  • A Domestic Partner who may be in a “registered” or an “unregistered” relationship with the deceased as at the date of death.
  • Former Spouse or Domestic Partner as at the date of death who was able to take proceedings against the deceased under the Family Law Actand who did not take such proceedings and was prevented by the death of the deceased from taking them, or, who did take proceedings and could not finalise them because of the death of the deceased;
  • Carers, but only if they are in a “registered caring relationship” with the deceased as at the date of death as defined under the Family Law Act 1975and that the relationship was not for a “fee or reward”
  • Children who are:
    • Under 18 years of age; or
    • A full-time student aged between 18 years and 25 years; or
    • Have a disability (as defined in Section 90 of the Administration and Probate Act 1958);
    • A step-child, or adopted child of the deceased, subject to the categories listed above. As of 10 May 2017, children who have been brought into a de facto relationship are now deemed to be “stepchildren” of that relationship for the purposes of identification as an “Eligible Person”.
    • Adults but only if they can demonstrate the degree to which he or she is not capable by his or her own reasonable means of adequately providing for his or her own proper maintenance and support;
    • An “assumed child”. This is where the child was treated by the deceased as a natural child.
  • Grandchildren (including step-grandchildren and adopted grandchildren).
  • Member of the household of the deceased who, at the date of the deceased’s death:
    • Was a member of the household; or
    • Had been in the past but, had it not been for the death of the deceased, would have likely, in the near future, again become a member of the household.

There are ways in which such will dispute claims can be minimised with proper legal advice at the time of preparing your Wills.

If you wish to discuss how you can prepare your estate plan in a way that minimises the incidence of any will dispute, or alternatively, you are seeking advice as to whether you are an eligible applicant for the purposes of contesting a deceased person’s estate, please contact us as we would be happy to assist.

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