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Superannuation is usually one of the main assets of a person and people refer to it as “” My Superannuation”. One of the biggest misconceptions about Superannuation is that it forms part of your estate - it does not automatically do so !

In other words, your super may not be distributed to the beneficiaries named in your Will or to the persons entitled to your estate under the law (should you not have a valid Will).

Australia is a land of immigrants. Are you one in four Australians who were born overseas? Have you or do you expect to inherit overseas assets? Or have you acquired assets overseas?

In times of bereavement it is often distressing for members of the deceased’s family to address the issues surrounding the wishes of the deceased. It can also be difficult to try and understand the specific language used in the administration of an estate even when you aren’t trying to cope with the loss of a loved one. To help you better understand this sometimes confusing process we have prepared a short series called ‘10 Things You May Not Know About Estate Administration’.

Andrew Freer             E:   andrew@kjblaw.com.au

Part 4 - Passing Accounts

A legal personal representative has a general duty to keep accounts and render them to beneficiaries when called on to do so. In addition, section 58 of the   Administration and Probate Act 1929   (ACT) identifies that the rules may require a legal personal representative to prepare, have examined and have accounts passed by the Court in certain circumstances.

In most cases, a legal personal representative will be able to comply with his or her general duty to account (whether or not a demand has been made) and satisfy beneficiaries by providing an itemised list of:

• assets transferred;
• assets realised and still held;
• funds received from all sources;
• payments for estate liabilities, distributions & money retained; and
• provision for liabilities not yet paid.

What are Accounts?

Accounts are:

• a written record of the legal personal representative's dealing with the estate assets showing, in broad terms, itemised detail of assets transferred to beneficiaries, assets realised or retained; funds received from all sources, payments for estate liabilities, liabilities incurred but not yet paid, distributions to beneficiaries and money retained and re-invested; and
• the original supporting documents, that is, receipts, statements and invoices.

The passing of accounts involves a process akin to an audit by a Registrar of the court to determine both whether payments have been made and if so, whether they are proper. A legal personal representative is required to file and pass formal accounts when:

• ordered to do so on the application of a beneficiary or the court of its own motion;
• an executor wishes to claim commission and cannot reach agreement with affected beneficiaries;
• an executor desires to obtain a release but beneficiaries are unwilling to give one.

What do accounts look like?

There is no standard format for accounting in an informal way.  The key is to inform beneficiaries adequately.  Often accounts will be by letter from the executor's solicitor.  The frequency, form and detail will depend on the make-up of assets in the estate and how complex the estate administration has been. Informal yet sufficiently detailed accounts will frequently both satisfy beneficiaries and fulfil the executor's duty to account.

If you are unsure whether you are keeping appropriate records, or are concerned that a legal personal representative is not keeping you properly updated on status of an estate, please contact the team at KJB Law on 6281 0999 to discuss.

Andrew Freer           E:   andrew@kjblaw.com.au

In times of bereavement it is often distressing for members of the deceased’s family to address the issues surrounding the wishes of the deceased. It can also be difficult to try and understand the specific language used in the administration of an estate even when you aren’t trying to cope with the loss of a loved one. To help you better understand this sometimes confusing process we have prepared a short series called ‘10 Things You May Not Know About Estate Administration’.

Andrew Freer             E:   andrew@kjblaw.com.au

Part 3 – Commission

What is it?

Section 70 of the   Administration and Probate Act 1929   (ACT) allows the court to award commission to a legal personal representative, or a trustee of a trust established under a will, out of the estate assets for their "pains and trouble" that is just. "Pains" is regarded as the responsibility, anxiety and worry; "trouble" is the work done.

How do I get it?

It is necessary for a legal personal representative to claim commission – it won’t just be given to them. The amount of commission is always at the discretion of the Court, and its usual practice is to award commission within commonly adopted parameters.

Conduct such as breaches of trust and failure to act promptly in the administration of the estate may limit, or even defeat, what would otherwise be an appropriate claim for commission.

On the other hand, unnecessary complaints or accusations by beneficiaries against a legal personal representative who is performing their duties in a proper way can be a factor operating in favour of the legal personal representative in the award of commission.

A legacy to the legal personal representative in lieu of commission, or in recognition of their services as executor (whether stated expressly or inferred from the will), if accepted, will normally result in no award of commission to the legal personal representative. However, a legacy to the legal personal representative without reference to them acting as legal personal representative will usually not be a bar to an award of commission. Depending on the amount of the legacy and the size of the estate, it may be a factor considered by the Court in reducing the ultimate award. Also, a gift of a share, or even the whole, of the residuary estate to the legal personal representative does not of itself prevent an award of commission.

A legal personal representative is entitled to reimbursement out of the estate for out of pocket expenses incurred in the performance of their duties, such as for postage and telephone expenses. These amounts are in addition to commission.

By Consent?

There is nothing to prevent a legal personal representative and affected beneficiaries (who are fully informed) from agreeing to payment of an amount for commission without any order or other sanction of the court. The affected beneficiaries are those who would bear any part of the burden of the commission payment. Ordinarily this would not include legatees. Commission is regarded as a testamentary expense and is ordinarily paid out of residue.

By Court Approval?

If such an agreement can’t be reached though, to claim commission the legal personal representative must file and pass accounts with the Court. Ordinarily the legal personal representative claims commission at the same time as they seek the passing of accounts.

How Much Commission?

In short, how much is in the discretion of the Court. In NSW the usual practice of the Court is to allow commission by applying different percentage rates to each component of the accounts - assets realised, assets transferred in specie and income collected. Another thing to consider is that the ATO considers commission paid to an executor to be assessable income of the executor personally.

If you think you may be entitled to commission, or want to ensure there is appropriate provision made for your legal personal representative in your will, the team at KJB Law can help. Please contact us on 6281 0999 to discuss.

Andrew Freer           E:   andrew@kjblaw.com.au

In times of bereavement it is often distressing for members of the deceased’s family to address the issues surrounding the wishes of the deceased. It can also be difficult to try and understand the specific language used in the administration of an estate even when you aren’t trying to cope with the loss of a loved one. To help you better understand this sometimes confusing process we have prepared a short series called ‘10 Things You May Not Know About Estate Administration’.

Andrew Freer             E:   andrew@kjblaw.com.au

Part 2 – Ademption

What is ademption?

Ademption is a legal concept that applies to gifts of specific property made under a will. For example, leaving a gift of a specific identified painting to a friend in your will. If during your life you dispose of that specific property – either by sale or otherwise - so that at the date of your death it is no longer yours to dispose of, that specific gift is taken to have “adeemed”. Where this happens, the beneficiary gets nothing.

If the subject matter of the gift was intentionally sold by the will maker between the date of the will and the date of death, the beneficiary of the adeemed gift is usually not entitled to the proceeds of its sale.

The general rule of ademption though only applies to specific gifts – it does not apply to a gift of the whole estate or to a gift of residue.

Does intention matter?

The intention of the testator in making the disposal is generally not relevant. Thus an ademption will occur where there is a "forced" disposal such as by a transfer under a pre‑existing buy-sell provision in a shareholders or partnership agreement, a writ of execution, order of the Family Court or mortgagee sale.

Can I get around it?

An exception to the general rule of ademption exists where it can be shown that the property ceased to be part of the testator's estate because of the unauthorised action of an agent or by an unlawful act unknown to the testator.

Disposal of an asset as a result of theft, fraud, breach of fiduciary duty or similar misconduct may be capable of being set aside under general equitable principles. Setting aside the transaction may result in the asset being restored to the estate. In such a case the question of ademption, as such, would not arise: having been restored to the estate, the property could then pass under the will as if it were owned by the deceased at the time of death, subject to the liability of the property for debts, funeral and testamentary expenses.

In NSW, section 22 of the   Powers of Attorney Act 2003   (NSW) sets out that beneficiaries of property disposed of before death by an attorney under a power of attorney retain certain rights and the general rule as to ademption can be displaced in certain circumstances. There is no equivalent provision in the ACT however. There is a therefore a fundamental difference between the position in NSW and the ACT.

Where this situation arises, a beneficiary may have several courses available to overcome an apparent ademption of a specific gift, including:

• applying for construction or administration proceedings on the basis of misdescription of the item subject of the specific gift, or change in name or form of that property;
• seeking to set aside the disposal on the basis that it was done so on a tortious or fraudulent basis; and
• asserting that the disposal was made by an attorney or financial manager (in NSW but not in the ACT).

The action to be taken by the person seeking to overcome the apparent ademption in the above circumstances essentially entails proceedings for construction of the will. If you are unsure how this principle may apply to your will, or are a beneficiary who is concerned that a gift to you may have adeemed, please contact the team at KJB Law on 6281 0999 to discuss.

Andrew Freer           E:   andrew@kjblaw.com.au

In times of bereavement it is often distressing for members of the deceased’s family to address the issues surrounding the wishes of the deceased. It can also be difficult to try and understand the specific language used in the administration of an estate even when you aren’t trying to cope with the loss of a loved one. To help you better understand this sometimes confusing process we have prepared a short series called ‘10 Things You May Not Know About Estate Administration’.

Andrew Freer             E:   andrew@kjblaw.com.au

Part 1 – What right do you have to inspect and copy a will of a deceased person?

It is not uncommon for family members, beneficiaries or eligible family provision applicants to be interested in obtaining a copy of the will of a deceased person. As an interested person you may wish to find out what entitlements you have under the will of the deceased. You may want information to enable them to decide whether to make a family provision claim. You may simply be trying to determine the identity of the executor and the beneficiaries. Alternatively, you may wish to find out when a will was made to assist in deciding whether to apply for a grant of another will, or challenge the validity of a will.

But what is the legal position?

In the first instance you should make a direct request to the person who actually has possession or control of the will.  Section 126 of the   Administration and Probate Act 1929   (ACT) sets out who is entitled to inspect will of deceased person. It provides that a person who has possession or control of a deceased person's will must, on request in writing by an interested person, allow the interested person to inspect, or be given copies of, the will or any copies of the will in the person's possession or control. The legislation contains a definition of who is an interested person.

The obligation to allow inspection and copying extends to both the actual custodian as well as any person whose instructions or permission would be required, such as the executor named in the will.

If a copy is not forthcoming following a direct request though, rule 3111 of the   Court Procedures Rules 2006 (ACT)   gives the ACT Supreme Court the power to issue a subpoena to a person to produce a will or document.  To obtain this though you need to make an application to the ACT Supreme Court.  Not just anyone can make the application - you must first have standing to apply. This stops just anyone applying to see a copy of a will, and restricts it to only those who actually have a legitimate interest. Interested persons who have standing to seek a copy of the will or document can include:

• the spouse, parent or issue of the deceased;
• anyone named as a beneficiary in the will, or an earlier will;
• anyone who would be entitled to share in the estate if the deceased died intestate;
• an attorney of the deceased under an enduring power of attorney; and
• a creditor of the deceased.

Making an application to the ACT Supreme Court is a significant step though and should not be undertaken lightly. If you are having difficulty obtaining a copy of a will, or aren’t sure whether you should agree to a request for a copy, the team at KJB Law can help.

Andrew Freer           E:   andrew@kjblaw.com.au