Revocation of wills by marriage

Contemplation of marriage

All Australian States  have legislation that  provides that unless a contrary intention is proved, solemnisation of a marriage revokes all wills in existence at the time of the marriage. Instructions need to be taken in order to determine whether the Will is to continue in force if the marriage does not take place. Instructions need to be taken as to whether the operation of the will is conditional on the marriage taking palace by a certain date. Clients often want their Will to have effect regardless of whether or not the marriage takes place. Those instructions need to be confirmed. In my opinion the latter option is preferable.

Navigating Aged Care

The types of care available

There are a number of categories of care available. These include:

  • Home care
  • Granny Flat residence with home care
  •  Independent self-contained unit at a retirement Village (over 55’s style village)
  •  Residential Aged Care (Nursing Home)

The office of the Public Advocate or social workers are empowered to conduct an investigation into the suitability of a person’s accommodation needs. Usually this is based on medical and social worker reports provided by the Aged Care Assessment Team (“ACAT”). Based on the level of the assistance required, a recommendations are made as to the appropriate level of care. If the investigation shows that a person is not being suitably cared for proceedings may initiated in the State Administrative Tribunal.

Financial issues in respect of residence: How will tenure be secured?

Access to residential care is means tested.[1] The means test determines whether or not the resident is required to make a lump sum entry contribution to the home.[2] There are two main types of entry contribution.[3]  The first is 100% of the means tested payment paid as a lump sum deposit. With no interest accruing on the payment. The second is a percentage of the means tested deposit coupled with an ongoing daily interest accrual on the unpaid part of the deposit. The interest component is ultimately taken from the lump sum on death or on vacating the facility.

If a person’s assets are less than the threshold limit obligating them to pay either of these in-going contributions, then they may only have to make a small concessional contribution with the remaining in-going contribution being funded by the Commonwealth Government.[4]

Financial issues in respect of care: How is a person’s residential aged care funded?

Usually the costs of the resident’s care needs are paid the resident. This ongoing daily liability is distinctly different to the costs of securing occupancy within the facility. To calculate the daily cost of care whilst in residence different means test applies[5]. The test is based on an aggregate of the represented person’s income and assets.[6]

There are a number of statutory thresholds, exemptions and concessions that apply in the calculation of daily care liability. The daily cost of care can be increased depending on whether the resident seeks premium or additional services to those provided under the standard residence contract.

If a person’s assets are less than $159,423.20[8] then they only pays the $48.25 per day.[9]If a person’s annual income is less than $25,000.00 or their assets are less than $46,500.00 then they do not need to make an additional contribution to his care[10]. If a person’s assets exceed $159,423.20 or their income is above $46,500.00 then they will need to make an additional daily co-contribution[11].

Where the asset tested co-contribution is less than the actual costs of the care provider (capped at $54.29 per day) then resident pays the asset tested co-contribution and the Commonwealth Government pays the balance[12]. Where the asset tested co contribution is more than the cost of care the resident pays the cost of care.[13]

Note: the law in this area is frequently changing and it is prudent to seek independent financial advice before dealing with your assets.

[1] Sch 3 s 149, inserting s 52G-2(a) Aged Care (Living Longer Living Better) Act 2013 (Cth) (“ACA”).

[2] Fees and Payments Principles 2014 (No.2) s 19(3).

[3] Ibid.

[4] Ibid

[5] Ibid Sch 3 s 149, inserting s 52C-3(3)(a) for Means tested care fee.

[6] ACA Sch 3 s 110, inserting s 44-22(1), and s 44-22(2) for income and Sch 3 s 110, inserting s 44-22(3) for assets.

[7] ACA Sch 3 s 149.

[8]ACA Sch 3 s118, inserting s 44-26A(7) and s 44-26B(1), definition of ‘maximum home value’.

[9]ACA Sch 3 s 149, inserting s 52C-4.

[10]ACA Sch 3 s 110, inserting s 44-22(1).

[11] This is the converse of ACA Sch 3 s 110, inserting s 44-22(1).

[12] Commonwealth Department of Social Services (“DSS”) sets this amount, Dept. of Health, Living Longer, Living Better, Attachment A – Summary of means testing arrangement for residential care subsidy and fees, Step 3C, Step 1: DSS ‘Aged care subsidies and supplements as from 1 July 2014.

[13]ATA Sch 3 s 110, inserting s 44-21(2).

Guardianship and Administration on incapacity

The State Administrative Tribunal (“SAT”) has jurisdiction to hear matters in respect of a person’s incapacity or the appointment of representatives to handle their affairs[1]. The Supreme Court of Western Australia also has jurisdiction.[2]

A person is presumed to have capacity to manage their legal and financial affairs until the contrary can be show to the satisfaction of the relevant court or tribunal.[3]  The revocation of an existing EPOA will not happen automatically on the making of an administration order[4]

It is common practice for the SAT member to invite an oral application at the hearing if that application was not filed with the originating process)[5] or to make the order on his/her own motion or revoke or vary the power of the EPOA (notwithstanding they will only do this if they are put on notice about the existence of an EPOA).[6]

To avoid any procedural argument, or to avoid forgetting the issue leaving an unrevoked EPOA in effect, an application to revoke or cancel should be sought concurrently with the originating application.

The Public Trustee is an interested party to proposed causes of action on behalf of proposed represented persons in the SAT[7] and in the Supreme Court[8].

Leave to appear by solicitor

The office of the Public Trustee is not required to be represented by a solicitor in the SAT or Supreme Court of Western Australia.[9] If you intend on instructing a lawyer to appear on your behalf, they will need to file a notice of acting in the tribunal[10]. Leave of the SAT is generally not required for a lawyer to be permitted to appear[11]. It is important to note that The SAT is typically a no cost Jurisdiction.[12]  It is possible to seek an order for costs but usually these orders are reserved for extreme circumstances such as noncompliance.[13]

 

[1] s13 of the Guardianship and Administration Act 1990 (WA)(“GAA”)

[2] s3A GAA and the Parens Patriae jurisdiction of the Supreme Court of Western Australia and Order 70 of the Rules of the Supreme Court 1971 (WA)(“RSC”).

[3] S4(3) GAA.

[4] S108(1) GAA

[5] Ibid

[6] S108(1a) GAA

[7] S109(1) GAA

[8] Ibid at [2]

[9] Ss49(j) and 65 Public Trustee Act 1941 (WA)(“PTA”)

[10] R34(6) Guardianship and Administration Rules 2004 (WA)(“GAR”).

[11]S39 State Administrative Tribunal Act 2004 (WA)(“SATA”).

[12] 119A GAA and s9 SATA.

[13] 16(2)(b) GAA.

The effect of poorly drafted affidavits

Relevant Principles

The rules of evidentiary admissibility that apply to oral evidence given in open court are equally applicable to evidence given by affidavit.[1] Affidavits must be carefully prepared, the court will not grant a party leave to accept non-compliant affidavits containing mistakes or clearly inadmissible evidence which could have been avoided or ought not to have been included to begin with.[2]

In particular the evidence must:

  • Be relevant;[3]
  • Not contain inadmissible hearsay[4];
  • Not make statements of belief where the source of the belief is not stated.[5]
  • Be confined to such facts as the witness is able of his or own knowledge to prove.[6]
  • Not contain inadmissible opinions.[7]
  • Not mislead the court.

If an improper affidavit is filed it may be liable to be struck out, whether wholly or in part. In addition, the solicitor who prepared the offending affidavit may find themselves personally liable to an adverse cost order.

[1] Deputy Commissioner of Taxation v Ahern (No. 2) (1988) 2 Qd R 158 at [163] and [167].

[2] Re JL Young Manufacturing Co Ltd [1900] 2 Ch 753 a [75].

[3] s92 EA;  Wilson v R (1970) 44 ALJR 221; Hollingham v Head (1858) 140 ER 1135.

[4] Walton v The Queen (1989) 166 CLR 283; Myers v Director of Public Prosecutions [1965] AC 1001; Re Gardiner (1967) 13 FLR 345.

[5] Re JL Young Manufacturing Co Ltd [1900] 2 Ch 753 at [754].

[6] r430(1) UPCR.

[7] Allstate Life Insurance Co & Ors v Australia & New Zealand Banking Group Ltd & Ors (No 32.) [1996] FCA 25.

Puppet structures and alter egos: creation of a trusts, and powers of appointment to avoid the Court

People try to use third party asset structures to avoid their assets being attacked from a family law, bankruptcy and testator’s family maintenance perspective (“TFM”). There have been a variety of cases involving inter vivos trusts, which have been used by parties to argue their non-ownership of assets in the Family Court.[1] The same principle may be applied to ousting the jurisdiction of the TFM legislation. In Australian Securities and Investments Commission In the Matter of Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey (No 6) [2006] FCA 814 (“Richstar”) French CJ said at paragraph [36]:

“…where a discretionary trust is controlled by a trustee who is in truth the alter ego of a beneficiary, then at the very least a contingent interest may be identified because… ‘it is as good as certain’ that the beneficiary will receive the benefits of distributions either of income or capital or both.”

De-identified case example #2:

“A has two children B and C. A’s estate is worth $300,000.00. A is the appointor and trustee of the A Family Trust. The A family trust has a commercial property worth $2,000,000.00. A’s will states that B and C are residuary beneficiaries in equal shares. A’s will creates a power of appointment in the will to B as appointor and guardian (or A executes a deed of variation of trust making B the substitute appointor and guardian of the trust in the trust deed). A dies C has only $150,000.00 worth of estate assets to claim against.”

In the High Court case of Kennon v Spry [2008] HCA 56 the only substantial assets of the marriage were assets held in a Family Discretionary Trust. In 2001, the parties separated. Dr.Spry then settled four separate trusts for his children and transferred the original trust assets into the newly created trusts for his children. The quarantine of assets was designed to defeat the Family Law Act. These transactions were not successful due to the legislative intervention of Part VIII of the Family Law Act 1975 (Cth).

[1] In the Marriage of Ashton [1986] FamCA 20; In the Marriage of Davidson (No2)(1990) 101 FLR 373. In the Marriage of Goodwin (1990) 101 FLR 386, In the Marriage of Harris (1991) 104 FLR 458, In the Marriage of Gelley (No2)(1992) 107 FLR 160.