INHERITANCE QUESTION
Question: John's business is in bad shape – he may even go bankrupt! His father, Gerry, is unwell and is in hospital. He is quite healthy. John is Gerry's only son and expects to inherit his whole estate. If Gerry dies, will John's creditors be able to get hold of John's inheritance?
Answer: If Gerry dies leaving his estate to John, those assets will be available to John's creditors should he go bankrupt. There is no method after Gerry's death which John could use to effectively safeguard his assets.
The solution is for Gerry to make a new Will in which he leaves his estate to John as a Trustee for a Testamentary Discretionary Trust. John and his spouse, children and grandchildren and other related parties would be beneficiaries of that Trust and after Gerry's death John could direct the benefit of the inheritance to any of those persons if John were in financial difficulty.None of the assets become John's until he exercises his discretion to benefit himself under the trust and accordingly, the assets do not form part of the assets that are available to his creditors.
Wills containing Testamentary Discretionary Trusts are complex but have the above benefits as well as other benefits. A properly drawn Will not only protects assets in the above circumstances but minimises the tax implications to the recipient of an inheritance and otherwise protects an estate from unwelcome attacks and costs resulting from ambiguity and confusion. A Will is a complex document which disposes of all assets owned by the deceased at the date of death and needs to be carefully drafted to cover the particular circumstances of each person.
TERMINATION OF UNCONDITIONAL CONTRACT
Question: Bill has signed a Contract for $400,000.00. It is located on a quiet street and meets all his needs. He had pre-approval of a loan so he was able to enter into an unconditional Contract with a deposit of $20,000.00. The day after the Contract is signed by the Seller, Bill finds out that the Government may soon upgrade the quiet street into a major through-road. Can Bill get out of the Contract? Will he lose his deposit?
Answer: A purchase of residential real estate in Queensland has the benefit of a five (5) business day "cooling off" period. The "cooling off" period commences on the date that the Contract is formed (usually the day that the Contract signed by the Seller is delivered back to the Buyer, the Buyer having signed first) and ends at 5.00 pm five (5) business days later.
A Contract can be terminated under the "cooling off" period for any reason, however, there is a price payable. The Buyer must pay an amount equal to 0.25% of the purchase price by way of a cancellation fee to the Seller. On the example given above that cost would be $1,000.00. Property conveyancing, whilst often straightforward, can be extremely complex from a legal perspective. The needs of all Buyers and Sellers are different and it may well be that the standard REIQ Contract used by most Real Estate Agents, is not satisfactory in a particular transaction.
Buyers and Sellers are encouraged to contact their Solicitor prior to signing a Contract to see whether or not they need to alter the standard REIQ Contract or whether it would be adequate for their needs. "Cooling off" periods do not apply to the purchase of properties which are not residential (either land or dwellings).
DECEASED LEAVES ASSETS TO INAPPROPRIATE BENEFICIARY
Question: Jill's stepmother, Maude, has just died and she finds that all the assets that she (Maude) inherited from Jill's natural father had been left to the Society for the Prevention of Premature Balding.
What can Jill do?
Answer: In Queensland, the Succession Act governs the situation when a person who is a dependant of a deceased is not left an "adequate provision" by the deceased person's Will. "Dependant" generally includes a spouse (including de facto spouse), and children (including step children). If, in all the circumstances, one of these people can establish that they have not received an "adequate provision", then the Supreme Court has power to make "adequate provision" from the estate of the deceased person.
In our example, Jill could apply to the Supreme Court for an order that she be given an "adequate provision" from the estate. She is in the class of persons who have the right to make such an application.
Wills can become extremely complex in the circumstances of second marriages and multiple families and careful guidance is needed to navigate through the difficulties that can be faced to create a Will that has the best chance of meeting everyone's needs.
A Will has the effect of disposing of a deceased's persons estate of whatever nature at the date of death to the persons named in the Will. This happens at a time when that person is not around to resolve disputes or ambiguities.
It is therefore very important that the Will be clear and unambiguous and be drafted having regard to the needs of all parties and the legal implications of any particular choice made.
PROPERTY RESUMPTION
Question: Tom owns land that is on a main road which is about to be upgraded to a four lane highway. The Government wants to resume a ten metre wide strip from the front of his land. They offer some compensation which is not nearly enough because the land that he is left with is virtually useless.
What can be done?
Answer:Government authorities such as Councils and Main Roads Department have power to take private property for a proper purpose under the Acquisition of Land Act 1967. That Act provides protection for citizens by requiring the authority to pay fair compensation, based on the "highest and best use" of the land taken, and taking into account the effect on the value of any remnant portion of the land.
The usual process sees the authority first approach the landowner to negotiate an agreed sum. The Act will cover the landowner's reasonable costs of obtaining professional advice from a Valuer and also a Solicitor.
If a reasonable price can't be negotiated, the authority may resume the required land and the landowner then delivers a formal Claim for compensation under the Act. If the authority doesn't pay that amount, and agree to pay for all related costs such as valuation and legal fees, within three months the landowner may file a formal Application in the Land Court for determination.
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