Archive for the ‘Newsletters’ Category

I was just having fun – rights and responsibilities at the office Christmas party

There are many stories in the media about inappropriate behaviour at work functions – the more public the ‘offender’, the more likely the incident will attract ongoing attention.

Work Christmas parties provide a great opportunity to mix with fellow colleagues and bosses, reflect on the year’s activities and get to know each other on a more personal level.

With each social function however, employers and employees have certain rights and responsibilities. Understanding these and working together should ensure everybody’s welfare is protected and avoid some of the pitfalls that can arise from poorly managed events. Issues can range from the embarrassment of having ‘one too many’ to serious claims of sexual harassment, bullying and discrimination.

So, while preparing to let your hair down for the end of year celebrations, it’s a good idea to brush up on some essential work function responsibilities so that your next event is not too eventful.

Laying down the law

Despite a work function being held off work premises and out of normal working hours, workplace laws still apply and an employer’s duty of care for its employees remains as if they were at work.

Accordingly, without resorting to becoming the ‘fun police’, it is appropriate for employers to remind their employees about acceptable behaviour, codes of conduct, workplace and social media policies, responsible alcohol consumption and the prohibition of illicit drugs. This reminder should be in writing, issued before the event, and may accompany the invitation.

Employer’s liability

Employers may be liable to compensate an employee if, through a negligent act or omission, they fail in their duty of care to prevent injury and the person suffers harm. This liability extends to work functions and events.

Employers are also vicariously responsible for the behaviour of their employees both in the workplace and at work functions. Vicarious liability is a type of secondary liability whereby a superior (employer) is responsible for the actions of a subordinate (employee). This arises from the common law principle that the employer has a right, ability or duty to control the employee.

An employer can therefore be liable for harm suffered by a worker (such as discrimination, harassment including sexual harassment, and bullying) due to the inappropriate conduct of an employee. The effects of too much alcohol or simply forgetting that the work function is deemed a workplace can often fuel behaviour leading to these issues.

Employee behaviour and misconduct

Employees who behave inappropriately at a work function not only reflect poorly on themselves and their employer but may risk losing their job. An employee can be formally disciplined and, if the behaviour is severe enough, may be dismissed.

Although there are laws to protect employees from unfair and harsh dismissal, several cases have established that misconduct, in some circumstances, is sufficient grounds for termination. Misconduct includes drunkenness, dishonesty, breach of confidence and insulting / objectionable language – all actions that may be exacerbated by a few too many drinks or in a social context.

Social media

Employees should ensure they comply with their work social media policy – just because it’s a party does not mean that the posting of inappropriate images and / or comments will not breach policy. Whether or not a social media policy is in place, the best advice is, if in doubt, don’t.

Top tips for a smooth event

The following checklists for employers and employees should help keep everybody safe and ensure that your next event is enjoyable and runs smoothly for all.

Employers

  • Consider your employees’ religious and cultural beliefs, family and caring responsibilities, and travel requirements when planning, to foster an inclusive non-discriminatory event.
  • Remind employees before the function that workplace policies and codes of conduct will apply, a breach of which may result in disciplinary action.
  • Note that a mere reminder about workplace policies is insufficient if employees do not have access to, and have not had training in, such policies.
  • Set specific starting and finishing times, reminding employees that a decision to ‘party-on’ after the event will not be condoned by the employer.
  • Ensure sufficient food, non-alcoholic beverages and water are available.
  • Liaise with function centre management to ensure that responsible service of alcohol rules will be upheld and that a key employer will be notified of any employee or guest in danger of excessive alcohol consumption.
  • Provide employees with access to safe transportation after the party and ensure that they start their journey home from the event safely.

Employees

  • Be respectful of others, their opinions and beliefs and conduct yourself appropriately. Try to avoid topics that are likely to become heated and, if discussions get too controversial, walk away and get on with enjoying the party.
  • Make sure you are familiar with company policies and codes of conduct.
  • Drink sensibly and eat well to slow alcohol absorption.
  • Look out for your colleagues and guests and ask for assistance if you believe somebody’s welfare might be compromised.
  • Don’t get drawn into office gossip or behaviour that may be perceived as offensive, lude or explicit.
  • Be mindful about social media – apart from checking on the children and calling a taxi to get home safely, why not just leave the mobile aside and get on with enjoying the night.

Conclusion

Well-planned end of year work celebrations can be very rewarding and build morale within the workplace. By following some simple steps employers and employees can ensure the party is inclusive and fun for everybody, while keeping professional and personal reputations intact and avoiding legal complications.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Affordable break-ups – the sensible approach to dividing property

If you have recently separated, one of the concerns you will probably have is the size of your legal bill after your property matters are sorted.

Below are our top tips for keeping your family law property costs down without skimping on sound legal advice.

Tip 1 – do the groundwork yourself

A specific process is used when negotiating a property settlement. The first step is to identify the parties’ assets, liabilities and financial resources. This information is critical to determine the division of your property.

Compiling your financial information early in your matter and presenting it in an organised fashion has many benefits. It can be used at any stage – from negotiations, during dispute resolution and if necessary, for Court proceedings. As well as having a snapshot of your asset pool to assist in negotiations, you will likely save on costs associated with others having to arrange the information on your behalf.

When listing assets include their approximate value. Most local agents will provide a written market appraisal for real estate at no cost. For motor vehicles, you can visit www.redbook.com.au and obtain a printout of private sale figures for particular models.

Remember to include all assets – those that are jointly and individually held as well as those that are held with a third party. Assets comprise real estate, motor vehicles, furniture, art, antiques and collectables, shares, investments, superannuation, cash and business interests.

When listing liabilities include mortgages, loans, overdraft facilities and credit cards and for financial resources include wages, and income from other sources such as rental properties, dividends, business and company interests. Bank statements, share information and superannuation statements can easily be downloaded from the internet.

If relevant, financial returns for companies or partnerships should also be included and, if possible, the last three years’ tax returns for each party.

Tip 2 – Don’t avoid or put off getting legal advice

The sooner you know your rights the better. Many separating couples attempt to finalise their own property settlement or avoid settling their financial matters altogether. This is dangerous for several reasons. Failing to close joint accounts or to transfer assets is messy, leaves the parties vulnerable to future claims and makes it difficult for them to move on. It may also preclude them from getting credit with a subsequent partner and opens the potential for dispute.

Do It Yourself property agreements made in the absence of legal advice, often contain ambiguous provisions and are unenforceable. Without a complying Financial Agreement or Consent Orders (see below) parties are generally unable to access important stamp duty and tax concessions when it comes to transferring real estate from one to the other.

Family law is discretionary, and no two cases are the same. Investing in an initial interview with a family lawyer will provide guidance as to a likely settlement outcome and a basis from which to start negotiations.

Your lawyer will recommend any urgent measures you may need to take to protect property, advise you of your legal rights generally, and discuss the financial and other implications of a likely settlement. Your lawyer will explain the impact that your separation has on your Will and provide guidance on reviewing your estate plan.

Money spent early after separation on sound legal advice can return significant savings down the track.

Tip 3 – If possible, avoid going to Court

Generally, Court proceedings should be an option only when urgent orders are critical, the matter is highly complex, or when one or both parties are intractable, and a settlement is impossible.

Court proceedings exhaust time, money and emotions, and can usually be avoided. Most matters can be (and are) resolved and legally finalised by entering into a Financial Agreement or Consent Orders.

A Financial Agreement is a legal contract between the parties that sets out how their property matters will be resolved.

The agreement may provide for the closing of bank and loan accounts, the payment of money by one party to the other, the retention by one party of certain property such as a motor vehicle or furniture, transfer of the family home in exchange for a sum of money or the marketing and sale of real estate and distribution of the proceeds.

The parties are expected to cooperate in good faith and to uphold their obligations under the agreement and fulfil all requirements.

Financial Agreements are not approved or registered in Court – to be enforceable they must comply with the formalities prescribed by legislation. Each party will need to obtain independent legal advice before signing the agreement.

Consent Orders are considered more formal than Financial Agreements because they must be approved by a Registrar of the Court. An application for Consent Orders must include full financial disclosure by both parties and will be approved if the Court is satisfied that the orders are just and equitable.

Consent Orders will provide for the same types of matters as a Financial Agreement and can also include orders concerning any children of the relationship.

Tip 4 – Don’t stress the small stuff

You should never forfeit your legal rights however there are times when it is practical to agree to disagree, let things slide and move on. When emotions are involved it’s easy to get bogged down in minor issues that get in the way of a resolution and ultimately have little impact on the outcome.

For example, the difference argued in the value of a motor vehicle can soon be depleted by the costs of disagreeing, particularly if lawyers are instructed to get involved. Formal valuations cost money and are justified in many cases, however unless the motor vehicle is an irreplaceable classic, a middle-range figure obtained from Redbook should usually suffice.

Of course, there is little you can do if your ex-partner is antagonistic and fails to relent but maintaining composure should eventually prevail.

Conclusion

In between an informal or non-existent property settlement and a protracted battle where the parties refuse to budge, lies a fair and effective resolution that keeps legal fees in check.

These are just some of the ways you can use your time and resources wisely to help finalise your matter cost-effectively.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Interview questions you can’t ask

An employer’s potential liability for workplace discrimination arises before the first interview and exists whether or not a decision is made to hire a person.

A job interview is integral to the recruitment process and provides an opportunity for the employer to ask questions, check credentials and determine a prospective employee’s suitability for a position. It also provides reciprocal opportunities for candidates to find out more about the role and the organisation and to assess their interest in the position.

Naturally, both parties want to find the ‘right fit’ however the employer is largely in control of the interview process and may go about finding the right person in the wrong manner.

By asking a candidate certain ‘illegal’ questions during the interview process, employers risk breaching Commonwealth and / or State laws aimed to protect individuals against discrimination in the workplace.

So, what are illegal questions?

When interviewing a candidate for a position, the primary focus of the questions asked should be to assess the applicant’s inherent ability to perform the key functions of the role.

Employers should avoid asking questions about certain unlawful factors for which a candidate’s answer could be construed as determinative to the success, or otherwise, of his or her application. These include questions about age, gender, sexual preference, ethnicity, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion or social origin. Essentially, these matters are considered irrelevant in determining a person’s capacity to perform the role.

Even the most ‘innocent’ questions (such as those that might be asked during the course of social conversation) could be considered unlawful during a formal interview. The following are some examples:

  • How do you manage work with three children?
  • How old are you?
  • Does your disability prevent you from carrying out your job?

These questions have something in common – they are questions that might be asked of a particular category of applicants (those with children, over 50 years of age or with a disability) that would not necessarily be asked of other applicants.

Other questions that may result in a discrimination complaint include:

  • What is your religion?
  • Where were you born?
  • Are you working at the moment?
  • Have you had a workers’ compensation claim?

These questions are unnecessary when determining an applicant’s ability to carry out the duties required of the role and should be avoided. Deciding that an applicant is unsuited for the position based on an answer to one or more of these questions may result in discrimination action.

Asking the right questions

Potential claims for discrimination can be minimised by re-thinking your approach to how questions are asked and having a detailed job description to refer to during the interview process. This helps keep the interview on track and ensures only the essential requirements of the position are addressed.

Organisations are encouraged to implement a set of standard interview questions that focus on the key skills and requirements of the position. This may include asking applicants to demonstrate how their skills and personal qualities make them an ideal choice for the role. An effective way to achieve this is to ask for examples of how the applicant has achieved certain outcomes or reacted to particular situations in previous roles. For example, you might ask, ‘please explain how you managed an irate customer during your time as service representative with XYZ’.

Following are some examples of discriminatory questions, together with an alternative approach that can be used to obtain the necessary information from a candidate.

  • Injuries / physical disabilities – it may be necessary to discuss an applicant’s injuries or physical condition to determine objectively whether he or she would be able to safely perform, without personal risk or risk to others, the duties required.

Rather than asking directly about his or her condition, the interviewer should go through each element of the job and, where relevant, discuss what adjustments to the workplace might be required to assist the applicant perform these duties. Appropriate questions may include:

‘Are there any reasons why you may not safely be able to lift 5 kg?’

‘Are there any specific adjustments we would need to make so you could carry out the duties required?’

This demonstrates that the employer has genuinely considered the applicant who may be an ideal fit, with a few minor modifications to the workplace.

  • Age – asking an applicant his or her age is unlawful particularly if the employer is assuming that the person, due to age, lacks the energy, drive or technical ability to carry out the role. Basing questions on the applicant’s skills, experience and inherent ability to perform these tasks, rather than querying their age will help minimise a discrimination complaint. An appropriate question would be:

‘Tell me about your computer experience…what types of programs have you used?’

  • Family commitments – it is unlawful to discriminate against a candidate based on his or her family circumstances. Rather than asking applicants if they have children or family commitments, simply ask whether they are able to commit to the hours / days required of the position. For example:

‘The job will occasionally require you to work evenings and weekends – would this conflict with other commitments?’

  • Religion / race – it is unlawful to rule out an applicant whom you assume will be unable to work weekends due to religion, race or culture. If the job requires weekend work, simply point out the required days and ask the applicant whether he or she would have any issues working these days.
  • Currently working – asking an applicant if he or she is currently working could be perceived as discrimination on the grounds of employment, unemployment or receiving a pension. Instead, ask when the applicant would be available to start work.

Conclusion

Avoiding workplace discrimination starts before the recruitment process and continues throughout the employment relationship (including opportunities for career progression), during workplace investigations and termination processes.

Framing questions appropriately to minimise potential action for unfair discrimination and to give candidates an opportunity to demonstrate whether they can perform the job requires sound procedures and ensuring those involved in the recruitment process are aware of their obligations.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Take care when buying a property off the Plan

The term “buying off the plan” usually refers to purchasing a property that is not yet registered as a separate lot with the government department responsible for land title registrations, or not yet built.

Buying off the plan can refer to the purchase of a block of vacant land that is part of a subdivision, or a house or unit being built for sale where the land on which it stands is not yet registered as a separate title.

Selling property “off the plan” allows a land owner to develop the land in a less-expensive way, as the developer can negotiate lending rates with its bank at a lower rate if some of the land, houses or units are already sold to buyers. This is advantageous to a developer and can be attractive to a prospective purchaser who buys into an “off the plan” property in the early stages of the development.

There are however risks for the buyer of property “off the plan” and a diligent purchaser should take care when entering into this type of purchase contract.

The contract

A contract for the purchase of property “off the plan” does not have a precise completion or settlement date due to the incomplete nature of the building project and the subsequent separate registration process for the title to the land or new building.

“Off the plan” contracts generally include several clauses that are different to those in a standard contract for a registered lot. The major difference is the timeframe for the owner to complete the subdivision or the building on the land.

A standard contract will have a precise date for settlement to occur (either an exact date in the future or a completion period say “60 days after the contract is dated”). An “off the plan” purchase contract will still have a timeframe but it is usually stipulated that settlement will occur within a number of days following completion of the building project and registration of a separate title for the property being purchased.

Off the plan contracts also often include a provision called a “sunset clause” which establishes a period within which the contract must be completed – say within 24 months of the date of the contract. This means that completion or settlement can be anytime in that 24 month period after the signing of contracts, subject to the land becoming registered as a separate title or the building works being finished. If the date passes the parties can terminate the contract.

If you are buying a block of land “off the plan” in a subdivision the contract will usually include a clause allowing a variation in the area of that land that you will purchase on completion of the purchase, often because the local council and the land title registering authority have the final say on the area of the lots in the subdivision and may require the land owner/developer to change the areas. This reduction is usually capped at “not more than 5% of the area” in the contract and does not normally occur, but if it does your land area may be reduced but the purchase price is not reduced if the areas are changed.

When houses or units are sold “off the plan” the dwelling is not fully built or construction may not have even started until after you enter into the contract. The usual concerns with this type of purchase are that the progress of the building and the standard of the building work may be different to what you as the buyer contemplated. Remember you cannot see the finished product when you buy “off the plan” as the work will be done after you have signed the contract.

Often the developer will have a demonstration or “display home” to inspect showing you a model of how the buildings should look once completed, or they may have design guidelines and artist’s impressions of the building. These may not resemble exactly the finished building as some changes may be made during construction and you need to ensure that the contract provides some protection here. It is essential that you check the details of features, fixtures and fittings such as the stove, range hood, dishwasher, etc. and ensure that the quality of all finishes is clearly specified in a schedule that should be attached to the contract.

Market fluctuations

You should keep in mind that like the economy, property market conditions fluctuate and with long-term building projects such as luxury high-rise units, the value of the units may change prior to completion of the building and your contract. The price you agreed to pay stays the same regardless.

Paying a deposit

Your deposit could be tied up for some time between signing the contract and settlement.

Paying a deposit by way of a Deposit Bond (not always available in all states) or bank guarantee may be a better choice than a cash deposit when buying “off the plan”. If you terminate the contract your bond or guarantee can be cancelled and you do not need to take steps to recover your cash deposit.

You should always seek legal advice if a request is made to release the deposit to the owner before the sale is settled. If you do pay a cash deposit you should stipulate in the contract who is holding the money and where it is being held, if possible it should be deposited in an interest bearing account by the stakeholder (often the real estate agent).

The developer’s financial position

Construction companies and land developers who become insolvent or go bankrupt during construction can leave a trail of destruction behind them. Rising building and material and labour costs may force a site closure and you may be locked into a contract for a home that is not finished within the timeframe you expected.

In some states the builder will be required to have insurance which may provide some compensation for defective work or loss due to a bankrupt builder. You should seek legal advice to see what protection is offered before signing a contract.

While an early buyer “off the plan” has the best choice of the land or homes available in a project and has a longer time to on-sell the property for potential profit, the strategy is not without risk. There are many factors to consider before entering into a contract and our property experts can help guide you through this process.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Accessing digital assets – estate planning essentials

The recent death (or purported death) of Gerald Cotton, former Chief Executive Officer of Canadian cryptocurrency exchange company, Quadriga CX, emphasises the importance of planning your electronic after-life.

Mr Cotton’s death in India at the age of 30, has not only raised suspicion as to its authenticity (and allegations of an exit scam), but reiterated the chaos that can be created if digital assets have not been considered in an estate plan.

Mr Cotton was the sole custodian of encrypted passwords ‘protecting’ over $200 million worth of digital assets. His untimely death has left numerous Quadriga customers unable to access their assets with trading on the Quadriga platform suspended while authorities try to work out where to next.

Mr Cotton’s widow states that she played no role in the running of Quadriga and, despite efforts, has been unable to unlock the laptop used by Mr Cotton nor access any of his accounts.

The digital assets referred to in the Quadriga saga comprise cryptocurrency (virtual currency created and stored electronically such as Bitcoin, Litecoins and Ethereum). The cryptocurrency system is decentralised and not subject to a governing authority, raising unique challenges in identifying and ‘locating’ the assets.

Regardless of how the Quadriga saga unfolds, it is a timely reminder of how important it is to consider what happens (or should happen) to our digital assets when we die.

What are digital assets?

A person’s ‘digital life’ may encompass a range of online transactions, activities and accounts such as:

  • cryptocurrency;
  • financial assets including online bank accounts and shares;
  • intellectual property attached to domain names or online literary works;
  • online sporting and gaming accounts;
  • loyalty programs such as Flybuys, Rewards and Frequent Flyers;
  • online shopping accounts such as eBay and Amazon;
  • personal / business social media accounts such as email, Facebook, Linked-In.

All should be considered, and included, in an effective estate plan.

Issues unique to certain digital assets

Traditional cash-based assets such as money deposited in a bank, shares or other paper-based investments are held by title to the owner and can be transferred to the beneficiary of a deceased person with the relevant documentation.

Ownership of digital assets like Bitcoin, however, is anonymous with owners accessing their cryptocurrency with private keys which are used to unlock and deal with the assets. This information may be held on a computer device (via a digital wallet), on a USB, or printed separately. These assets can easily be overlooked or ‘keys’ misplaced, representing unique challenges when it comes to administering an estate.

Many digital assets are also held globally and may therefore raise jurisdictional issues from an estate planning perspective. In most instances, there is no uniform legislation governing access to a deceased person’s online accounts, so it is imperative that these matters are dealt with specifically in an estate plan.

Following are some steps you can take to ensure your online life is appropriately dealt with when you are gone.

Identify your digital assets

You should start by making a list of your digital assets (including online accounts) and determining what you would like to happen to them when you die.

Keep records of your online accounts and subscriptions including user names and passwords and store this information in a secure place.

Remember your online accounts and login details are likely to change frequently and your list should be maintained accordingly.

Understand your online accounts

Understanding how various accounts are dealt with by service providers will help to determine the type of action you would like taken when you die.

For example, Facebook account holders can advise in advance whether their account is to be deleted or memorialised. A memorialised account can provide a place for family and friends to share memories after a person dies on the deceased’s profile, and any content shared by the deceased person remains visible to those with whom it was shared. Nobody can log into a memorialised account.

Some loyalty programs such as Frequent Flyers may not be transferrable or redeemable after a person dies, so it may be wise to keep tabs on these types of accounts to utilise benefits regularly.

Include digital assets in your Will and appoint a technology custodian

Your Will should define and identify important digital assets and provide executors and trustees with appropriate directions and powers to deal with them.

Assign your executor or other trusted person, who is familiar with technology, the role of managing your online life after you die and ensure this direction is included in your Will.

Record your after-life technology instructions with respect to each account separately and ensure these instructions are secure, but accessible to your technology custodian. Never disclose passwords in your Will.

Online maintenance

Online accounts contain personal information which should be protected. Technology presents a real risk of identity fraud and unmonitored accounts can be particularly vulnerable. Regular monitoring and unsubscribing or deleting unused accounts can help minimise risk and keep your technology life tidy.

Regularly downloading photos and videos from your mobile to a storage device can ensure that memories are accessible to your family when you die.

Consider incapacity

It is also important to consider what happens to your online life in the event that you are incapacitated. Appointing a trusted person to manage your online affairs and including specific instructions in an enduring power of attorney is a logical step to ensure the appropriate management of your digital wealth if you are incapacitated.

The instrument making the appointment should be specific to the jurisdiction in which the assets are held, and in this respect, more than one document may be required.

Consider trusts

It may also be beneficial to hold substantial digital assets through a trust structure, if possible, for greater protection and better taxation outcomes. In doing so, the trust must be considered and dealt with under the Will, which should nominate beneficiaries of the trust or shares in the trustee company and include provisions to ensure the trust can achieve the desired objectives.

Conclusion

It has become increasingly difficult for executors, lawyers and family members to ascertain and access online assets after a person dies, with many financial and other institutions operating in a ‘paperless’ environment. Certain digital assets such as cryptocurrency can present additional problems for a deceased’s family.

Inaccessible online accounts make it difficult to identify assets, and leaving online accounts open indefinitely raises concerns of potential identity theft.

Good online management and ensuring your digital assets are included in your estate plan will help your executors and family manage your online life after you are gone.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Breast Cancer Awareness Month October 2019

How to deal with an unfair Will

In this article we talk about dealing with an unfair Will. We are not considering the validity of a Will or being left out of a Will entirely – rather that the distributions made to one or more beneficiaries might be considered to be unreasonable in the circumstances.

There are many reasons why a Will might actually be, or be perceived as unfair, including:

  • The Will of the deceased person (testator) may be old and was not updated to take account of changing personal or financial circumstances. For example, the testator may have divorced and not revised his or her Will to take into consideration a new relationship or family members.

 

  • A child may have provided significant care during a parent’s final years whilst other siblings carried on with their lives without interruption. The ‘carer’ likely incurred personal and financial expense or missed opportunities due to these commitments, however the Will may not take this into account. In the circumstances, it might seem reasonable that the child be compensated for the gratuitous services.

 

  • A falling out often causes people to act rashly resulting in a hurried decision to cut somebody out of a Will. Even after conciliation, the testator may not turn his or her mind to reinstate that person as a beneficiary.

 

  • The testator may have been unduly influenced or simply had a favourite child to whom he or she chose to benefit at the expense of others. Alternatively, a widow may be left wanting with a greater share of assets being left to the testator’s children or others.

Whatever the reason, an unfair Will raises questions that can no longer be answered, and creates uncertainty between the beneficiaries. If you relate to any of these situations, you may find comfort in knowing that there are ways to deal with an unfair Will.

What can you do about an unfair Will?

The concept of ‘testamentary freedom’ means that people should be free to determine how their assets are dealt with after they die.

Traditionally, Courts have been hesitant to interfere with this principle. However, society’s views and the concept of ‘family’ have changed immensely over the years.  Consequently, a Court has discretion to change the Will of a testator to alter the distribution of his or her estate where a moral obligation to provide for an eligible person exists and the Will fails to provide for the person. This is known as a Family Provision claim.

How is a Family Provision claim made?

Three main steps are involved in making and determining a Family Provision claim.

  1. You must be an eligible person.
  2. It must be shown that at the time of the deceased’s death, he or she had a duty to provide for your proper maintenance and support and the distribution proposed under the Will fails to do that.

 

  1. If the above two elements are satisfied, the Court will determine an appropriate adjustment in the circumstances taking into consideration the size of the estate and the interests of other beneficiaries or claimants.

The definition of an eligible person and the timeframes within which to make a Family Provision claim, differ between State and Territory jurisdictions.

Usually, a spouse, former spouse, de facto partner or child of the deceased will be an eligible person. Step-children, grandchildren, parents, siblings and persons in a ‘close personal relationship’ or who lived in the same household as the deceased, may in some circumstances and jurisdictions, also be eligible.

Your lawyer will assist in determining your eligibility to make a Family Provision claim and advise you on the time limitations applicable for your area.

Proving a Will is unfair

Once eligibility criteria are satisfied, a range of factors are considered in determining whether the Will is unreasonable and if so, what adjustment should be made.

The Court assesses the degree to which the deceased had a moral obligation to provide for the claimant in light of the proposed distribution of the estate. The claimant’s financial situation is taken into account as are the competing financial needs of other beneficiaries.

The Court looks at the Will and any evidence regarding the deceased’s obligations and intentions with respect to the claimant. The person’s character and conduct are relevant as is the nature and length of the relationship with the deceased. The claimant’s age and whether he or she has a physical or mental disability are also factors.

Financial and non-financial contributions made by the claimant to the property of the deceased person, or to the welfare of the deceased person or his or her family, are also important considerations.

Mediation is usually compulsory before a Family Provision claim proceeds to hearing. Settlement out of Court is often preferable, particularly when it appears obvious that a claim is justified and the estate assets can meet that claim. The executor’s role is to preserve the assets of the estate and an out-of-Court settlement is likely to assist in protecting assets from being depleted by legal costs incurred by going to Court.

Are there other ways to remedy an unfair Will?

Subject to certain conditions, a Deed of Family Arrangement can be used to document an agreement reached between the beneficiaries to distribute the estate assets contrary to the provisions of a Will.

All beneficiaries must be over 18 years and have full legal capacity. The parties (beneficiaries, executors and third parties, if relevant) should seek independent legal advice.

Where the parties are agreeable, or at least open to negotiation, a Deed of Family Arrangement can be a practical and cost-effective way of mitigating a Family Provision claim by remedying an unfair distribution under a Will.

Good legal advice is essential as such arrangements may have stamp duty and taxation consequences which must be addressed prior to formalising the agreement. The deed will also need to protect the executor from future claims or liability arising under the Will.

Conclusion

If you are a relative or somebody who shared a close relationship with a deceased person and feel that the Will is unfair, then you may be able to make a Family Provision claim. Your lawyer will discuss the eligibility criteria and assist in making the claim or negotiating a settlement with the estate.

It is important to try to avoid Will disputes arising after your death. This can be achieved by ensuring that your Will is up to date and takes account of changing circumstances in your life. Your lawyer can advise on structuring your Will to limit the possibility of a future Family Provision claim.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

We’re still friends, why do we need a ‘legal’ property settlement?

Many couples separate on good terms, which is great. The breakdown of a relationship can be difficult, however putting differences aside to move forward can be beneficial, particularly where children are concerned.

Ex-partners who remain on good terms may choose to make informal arrangements regarding the division of their property. However, the failure to legally document a property settlement can be unwise, particularly where the parties have acquired assets and / or liabilities, or where either have had their own assets prior to the relationship.

In most cases, even if you are a ‘happily separated couple’, there are many reasons to seek independent advice and have your financial affairs legally finalised. Following are some of these reasons.

Stamp duty concessions

The transfer of certain property, particularly real estate, is generally liable to stamp duty. However, certain exemptions from duty apply for transactions that are documented in a financial agreement or consent orders pursuant to the Family Law Act 1975 (Cth).

The exemptions are reflected in stamp duty legislation across different jurisdictions in Australia and can result in substantial savings. An informal agreement does not meet the prescribed requirements to obtain these concessions.

Taxation implications

Understanding the tax implications of a proposed property settlement and structuring the division of assets accordingly can have a significant impact on the net result for both parties.

Capital Gains Tax (CGT) is the financial gain made on the disposal of an asset. It is assessable income and must be included in a tax return.

Although the transfer of a matrimonial home between a separating couple does not generally attract CGT under the main residence exemption provisions, CGT liabilities may be triggered when transferring assets such as investment properties, collectables and certain other personal items. The Income Tax Assessment Act 1997 (Cth) however provides roll-over relief pursuant to a financial agreement or consent orders made under the Family Law Act. This means that any CGT liability is deferred until such time as the asset is later transferred by the party acquiring it, although the asset will remain subject to the same CGT conditions as it was before the transfer.

A potential future CGT liability is an important consideration when negotiating a property settlement. Care should also be taken when dealing with companies and trusts where various transactions could raise CGT issues.

Although family lawyers do not provide financial advice, they can flag potential tax issues and recommend working with an accountant to ensure a property settlement delivers the most viable results and avoids, wherever possible, unexpected tax liabilities.

Claims on post-separation assets

An informal property settlement is not legally recognised as bringing the couples’ financial affairs to finality, even if negotiations have been put in writing. Not only is an informal agreement insufficient to obtain relief from stamp duty or relevant tax exemptions, the parties are unprotected against a range of potential issues down the track. These include a subsequent claim by either party on post-separation assets, income and inheritances. The parties are also left vulnerable should one of them become bankrupt and the joint ownership of assets has not been severed.

The failure to formally discharge obligations under a joint loan or guarantor arrangements can also leave a party in a precarious financial state.

An informal settlement may not preclude one party, particularly if his or her financial circumstances change, from applying for a different division of property through the Court at a later time.

Finalising your property division

Once separated parties have agreed on the division of assets and liabilities, and obtained independent legal and / or financial advice, the negotiations can be made legally binding through a financial agreement or by consent orders.

A financial agreement is a contract between the parties – each have certain rights and responsibilities and must perform their obligations according to its terms. Financial agreements are not approved or registered in Court but, provided they are properly prepared, and each party obtains independent legal advice, they are generally enforceable by a Court.

Consent orders are similar to financial agreements however a Court must approve the proposed orders. The parties to consent orders do not need to attend Court for the orders to be finalised.

Financial agreements or consent orders may provide for a range of matters concerning the division of assets and liabilities, including:

  • the transfer of property from one party to the other;
  • the payment of funds in exchange for the transfer of property;
  • the sale of real estate or other property including terms regarding the appointment of an agent, method of valuation and distribution of surplus funds;
  • the splitting of superannuation;
  • requirements for paying out loans, credit cards and closing bank accounts;
  • financial support (maintenance) of one spouse by the other; and
  • any incidental issues.

Conclusion

Generally, family lawyers will support a reasonable agreement reached between a separating couple. In doing so however, they will ensure their clients are fully aware of the implications of a proposed property settlement, flag potential taxation issues and address future matters that may not have been contemplated between the parties. The negotiations can then be recorded in a legally binding agreement that meets the requirements for stamp duty concessions and, where relevant, tax relief.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Can I secretly record my spouse?

We’ve all had times when we can’t recall a conversation someone else swears we had. Often, one person in a relationship is more adamant about their memory than the other person. Usually, those mini-disputes are minor blips in an intact relationship. But what if it’s no longer an intact relationship? What if the “he said/ she said” dispute becomes part of family law proceedings?

One party might be tempted to secretly record their conversations with their ex-spouse or partner. But, is that lawful, and even if it is, is it a good idea?

Is it lawful to intercept a phone conversation?

The short answer is no. It is a federal offence to intercept (or tap) a phone conversation or other form of telecommunication. There are, of course, exceptions for ASIO, the police and similar organisations, but those exceptions wouldn’t apply in a family law situation.

Similarly, Australian law generally prohibits the recording of a private conversation between other people, to which the person doing the recording was not a party.

But what if you’re a party to the conversation?

Whether or not it’s lawful to secretly record a conversation (phone or otherwise) to which the person doing the recording is a party depends on the State or Territory in which the recording takes place. That is, such secret recording are permissible in Victoria, Queensland and the Northern Territory. However, it is prohibited in the other States and Territories – the ACT, New South Wales, Tasmania, South Australia and Western Australia.

The penalties for breaching the laws about intercepting or secretly recording a conversation vary, but can include paying damages to the other person and a term of imprisonment.

Can a secret recording be used as evidence in the Family Court?

Again, that will depend on where the recording took place and whether it was lawful in that State or Territory. In other words, if the secret recording took place in Victoria, Queensland or the NT and was, therefore, lawful, that recording could be used as evidence in family law proceedings.

However, if the recording was made in one of the States or Territories in which it is prohibited (ACT, NSW, Tasmania, SA and WA), the Court would have discretion whether or not to admit the recording into evidence. The Court would weigh up the benefit to the determination of the case in admitting the recording evidence, compared to the detriment to the parties and the justice of the case in allowing one of them to rely on illegally obtained evidence. Further, just because the illegal secret recording is admitted into evidence, the person who made the recording may still be liable to prosecution or damages for their offence.

Even if it’s lawful, should you do it?

The answer to this question will, of course, depend on the particular circumstances of the individual case. In a case where there are serious, regular disagreements about who said what and when, perhaps because drug or alcohol abuse or significant mental illness are involved, secretly recording conversations might be justified, in those jurisdictions where it is legal to do so.

However, even in cases where the secret recording of conversations might be tempting or may even seem warranted, before embarking on that course of action, the person wishing to do the recording should consider the future impact of considerable breakdown of trust in their relationship with the other person. It would be difficult, if not impossible, to continue to trust someone if you find out they have been recording their conversations with you without your knowledge. Ongoing trust between a separating couple is particularly important where children are involved and the couple need to share a parenting relationship into the future.

A middle ground option to secretly recording conversations with an ex-partner, regardless of whether or not it is lawful to do so in the particular jurisdiction, would be to make detailed notes of the conversations, as soon as possible after the conversations have ended. Such notes would be of significant benefit in preparing evidence for any family law proceedings, without jeopardising trust by secretly recording the conversations.

Conclusion

Whether or not it is lawful to secretly record a conversation, phone or otherwise, with an ex-partner depends on the State or Territory in which the recording is made. If the recording is unlawful, not only is there a risk that it will not be admitted into evidence in family law proceedings, the person making the recording could be liable to both civil damages and criminal prosecution. Even if it is lawful to secretly record a conversation with an ex, it isn’t necessarily a good idea to do so. A safer course of action might be to make notes of, rather than secretly record, the conversation.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Risks of purchasing property after separation and before financial settlement

If you have recently separated and wish to move on with your financial matters, it is important to close off on your previous property affairs with your ex-partner first.

Whilst it might be tempting to purchase real estate or other assets, particularly if you find a ‘great buy’, there can be issues if you do so before finalising property matters with your ex.

What are the issues?

The Family Law Act 1975 (Cth) requires parties to make genuine efforts to resolve disputes and to follow pre-action procedures before commencing Court proceedings.

Part of this process includes a duty of disclosure – parties must exchange information and documents (whether or not these are known to both parties) that are relevant to an issue in the case.

The disclosure obligations exist from the beginning of the matter and continue until the case is resolved. This means that a party must disclose new information when certain circumstances change or further documents that come to a person’s attention.

Disclosure is important so that an understanding of the parties’ asset pool can be ascertained and the parties properly advised of their legal rights and entitlements.

The acquisition of a new property will certainly fall within the disclosure requirements whether or not you consider your ex-partner should be privy to the details. Consequently, if you purchase property, either alone or with a new partner, this fact will need to be disclosed and the property will become part of the asset pool.

Disclosure will mean providing the address, purchase price and details of any loan or mortgage over the property, and of course details of any third party who is registered on the title. This is unlikely to be ideal however failure to disclose the new acquisition will be considered non-compliance with your obligations and may attract serious penalties.

Whilst the Court has a discretionary role in family law matters and will take into consideration the circumstances and financial contributions towards the new asset, it is safer to be certain that the acquisition of new property does not adversely affect your property settlement rights. Consequently, it is advisable to wait for a clean break before jumping into the market again.

Settling your financial affairs out of Court

Even if you and your ex-partner agree on how your property should be divided it is important to formalise your negotiations through a financial agreement or by filing consent orders in the Court.

A financial agreement (often referred to as a binding financial agreement) formalises how property is to be divided. The agreement may include the transfer or sale of real estate or other assets, the distribution of proceeds from the sale, the paying out and closing of credit cards or other loan accounts, the transfer of liabilities between the parties and the ongoing payment towards certain expenses.

When negotiating the agreement, parties must be honest in their dealings and give proper disclosure of their assets and financial resources.

Each party must obtain independent legal advice and, if prepared in accordance with the statutory requirements, financial agreements can be a less formal and cost-effective solution to dividing property. The agreement will be binding on the parties with the same force as any other contract.

Alternatively, separating couples may be advised to have their agreement endorsed by the Court through consent orders. This is a more formal process because the Court will need to approve the proposed orders.

An application for consent orders must include full financial disclosure by both parties and the Court will only approve the orders if, on the information provided, it is just and equitable to do so.

Because of the Court’s involvement in consenting to the orders, in certain circumstances, they can provide greater finality than a financial agreement.

Time limits

Separating parties should be aware of the time limits applicable in commencing proceedings under the Family Law Act 1975 (Cth) for a financial property settlement.

The grant of a divorce triggers a 12-month limitation period within which to commence proceedings for property settlement or spousal maintenance.

For de facto partners, proceedings must be commenced within 2 years of separation.

Whilst the Court may grant leave to apply out of the statutory time limits for extenuating circumstances, parties should endeavour to resolve their financial affairs without delay.

Conclusion

Full financial disclosure is essential to enable a lawyer to properly advise a party on his or her rights or a Court to ascertain the property pool if proceedings are commenced.

Disclosure obligations must be followed even if the parties settle their financial affairs without going to Court, and the parties have an ongoing obligation to disclose matters until their property settlement is finalised.

The decision to resist purchasing a significant asset before you have finalised your property settlement is likely a wise choice.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.