Wightons Lawyers news

9 June 2016 - Special Disability Trusts

  • By Website Team Technicians
  • 23 Jun, 2017

Special Disability Trusts - By Alette Rennie

For many families of children with severe disabilities the future can represent a time of uncertainty and angst. As parents age, questions as to the ongoing care and accommodation needs of their adult child can loom large.

In 2006, the Federal Government amended the   Social Security Act 1991    (Cth) (‘the Act’) to allow for the creation of what is known as a ‘Special Disability Trust’. The purpose of a Special Disability Trust is to enable families to provide for the future needs of a person with a severe disability or medical condition. This can be done by way of contributing, for example, a home and money to a Special Disability Trust, established for the benefit of a specific person, known as the beneficiary. A beneficiary is only entitled to have one Special Disability Trust established for their benefit.

In broad terms, a Special Disability Trust can provide for reasonable accommodation needs (which may include the payment of rent or the purchase of a primary residence), reasonable care needs (such as mobility aids, modified vehicles, communication devices etc), medical and dental expenses (including health insurance) and limited discretionary expenditure of up to $11,000 per year. The discretionary expenditure can be used to meet additional costs relating to the health, wellbeing, recreation, independence and social inclusion of the beneficiary.

A beneficiary may have up to $636,750 in trust assets (as at 1 July 2015 and indexed annually to the CPI) before their Disability Support Pension, or other social security payments, are affected. In addition, a home can be contributed to a Special Disability Trust, and provided it is the beneficiary’s primary residence, it will be exempt from asset test assessments. By way of example, parents could contribute a house for their adult child to live in as their primary residence, along with $500,000 for their care. In such a scenario, the house would be exempt from assessment and the $500,000 is under the current concessional limit, therefore there would be no effect to the beneficiary’s receipt of a Disability Support Pension.

In order to qualify for a Special Disability Trust, a beneficiary must meet eligibility criteria and the definition of severe disability as provided for by s 1209M of the Act. An impairment which qualifies the beneficiary for receipt of a Disability Support Pension is an example of eligibility, however there are a number of specific criteria which must be met, and which are assessed by Centrelink.  

Not any trust can be classified as a Special Disability Trust. A Special Disability Trust must be established by trust deed which complies with clauses as set out in the Model Trust Deed provisions under the Act. Such a trust can be established whilst family members are still alive or alternatively as a testamentary trust established through a Will, in which case the Special Disability Trust will not come into effect until such time as the person making the Will is deceased.  Establishment of a trust whilst family members are still alive can provide substantial taxation and social security benefits by way of generous gifting concessions of up to a combined sum of $500,000 for eligible immediate family members of the beneficiary.      

A Special Disability Trust terminates on the death of the principal beneficiary and the assets of the trust will then vest in the residual beneficiaries named in the trust deed. A trust can also end at an earlier point in time if all the assets are fully expended.

Special Disability Trusts must comply with strict rules, reporting and auditing requirements and do not suit the needs of all families. However, if you believe a Special Disability Trust has the potential to be of assistance to you and your family, and provide peace of mind then please contact us to discuss this further.

By Website Team Technicians 22 Sep, 2017

Deborah Anderson has joined Wightons Lawyers. Deb is an accredited specialist in Wills and Estates and brings a wealth of experience to our busy Wills and Estates department. 


We are thrilled to have her join our team. Please view her full profile on our PEOPLE page.

By Website Team Technicians 22 Sep, 2017

Family violence continues to cause distress, harm and concern to the victims, families and the community. Family violence comprises not only acts of physical harm but also verbal abuse, intimidation, denigration, controlling behaviour and sexual abuse. It also includes financial or economic abuse where one party seeks to control another through withholding or a threat to withhold necessary financial support. Protection is provided to the victims through the Family Violence Protection Act 2008.

 

Family violence is not limited to family members. A person, who is subjected to stalking or harassing behaviour or receives threats or sustains property damage, may be able to seek an Intervention Order through Personal Safety Intervention Orders 2008 legislation. Any person in fear for their wellbeing should seek assistance from the police or attend at the Magistrates’ Court and make an application for an Order.

 

An Intervention Order is an order generally made by the Magistrates’ Court. The Magistrate must be satisfied that an act constituting family violence has occurred and that it is likely to occur again. If an Order is made, there is no “criminal” record as the proceedings are essentially civil in nature. However if there is subsequent conduct which breaches the Court Order, this conduct may constitutes a criminal offence and could result in the perpetrator receiving a police record (including a conviction or non-conviction). The penalties for breach of an Intervention Order can be significant including a term of imprisonment.

 

Many people are concerned that the existence of an Intervention Order may prevent them from seeing their children. The Court is aware of the importance of supporting a child’s relationship with his or her parent but this must occur in a manner which ensures the child’s safety and promotes their best interests. It is not unusual for an Intervention Order to allow a person to still spend time with their child in accordance with any Family Law Order, Child Protection Order or written agreement but only if they do not commit any act of family violence during that time.

 

Victims of family violence should seek the support of Victoria Police or one of the several support agencies in the Geelong region. Assistance is available to the perpetrator of family violence to address their behaviour, identify the impact on their family members and learn the necessary skills to avoid future behaviour which causes family violence.

 

If required, victims of family violence can access urgent crisis accommodation and may be eligible for assistance through the Victims of Crime Assistance Tribunal. Enquiries can be made through Victoria Police initially.

 

Should you or a family member seek further advice, please contact one of our family law team members for assistance.

By Website Team Technicians 24 Aug, 2017
Wightons Lawyers welcomes Tamara Kotowicz and Briony Robertson who have both joined our busy family law department. Briony brings years of experience from a Melbourne firm while Tamara came from Victoria Legal Aid (VLA). Please view their full profiles on our PEOPLE page.
By Website Team Technicians 24 Aug, 2017
Buying into the family business can have some traps.
David and his three younger brothers started a business 30 years ago and it’s grown from a small business into a successful regional company. Tom, David’s son, has been the General Manager for the past 5 years; both David and his wife and his brothers and their wives are shareholders. David intends to retire and together with his wife agree they to sell their shares in the company to their son. Tom however can’t afford to buy the shares without getting finance. The company agrees to assist Tom financially with the acquisition of the shares.
Does this sound familiar? It sounds like a pretty simple arrangement but it does have its legal complexities and there could be some adverse financial cosequences.

“Whitewash” is the name given to a compliance procedure under the Corporations Act 2001.
Section 260A of the Corporations Act 2001 permits a company to provide financial assistance to a person to acquire shares in that company, but only if the giving of the financial assistance does not materially prejudice:
• The interests of the company or its shareholders; or
• The company’s ability to pay its creditors; or
• The assistance is approved by shareholders under section 260B (which also requires advance notice to ASIC); or
• The assistance is exempt under section 260C.

Most commonly, the whitewash will be carried out by following the procedure in dot point 3. This is an involved procedure and should only be carried out by an experienced commercial lawyer in this area of the law.
If the financial assistance is not whitewashed the validity of the transaction is not affected and the company is not guilty of an offence but any person involved in the company’s contravention of section 260A will be liable to have a civil monetary imposed on them. If the contravention happens to be dishonest then the consequences are even more severe.
Once the financial assistance provided by the company to the person acquiring some of its shares has been whitewashed, then the Corporation Act 2001 has been complied with an everyone (including the company’s bank which maybe providing the money to purchase the shares and the company’s accountant who may have provided some financial advice) will not suffer any potential financial detriment.
By Website Team Technicians 24 Aug, 2017

Running a business can be hard enough without having to deal with debtors who owe you outstanding sums of money. Try as you may, sometimes it can be very difficult to recoup these debts yourself.

Engaging a lawyer to act on your behalf can allow you to turn your mind back to the running of your business.

Debt collection via legal action begins initially with a letter of demand which is often all that is required for the debtor to pay the amount owing to you. A letter of demand sent from a lawyer is generally more effective than one sent personally. Should the debtor fail to respond or pay the amount owing to you your lawyer would then seek your instructions to commence legal proceedings against the debtor personally or against their company depending on the situation.

Filing an initial complaint and statement of claim with the appropriate court depending on the amount claimed will allow you to identify what is owed to you, claim interest on the outstanding amount and claim for legal costs on scale. The complaint will then be served on the debtor, after which they will have 21 days to file a defence. Should they fail to file a defence your lawyer will make an application for a default judgment which is an order in your favour for the amount sought. This judgement will be registered against the debtors name personally, or if they are a company, against the company name. There are initial fees for filing and serving the complaint but these can also be claimed back form the debtor.

The registered judgment will remain on their credit report for 5 years and will likely affect any applications they make regarding finance. The judgement remains enforceable for 15 years.

If the debtor does not pay following the default judgement being entered against them enforcement proceedings will be commenced in which a Summons for Oral Examination is served, resulting in the debtor being summoned to attend court to answer a range of questions under oath. These questions enable your lawyer to ascertain which enforcement method will be most effective for you. Should the debtor fail to attend court to answer the summons a warrant may be issued for their arrest and they will be forced to attend court.

There are a number of different enforcement proceedings but some of the more common methods are: Attachment of Earnings Order, Attachment of Debt, Instalment Order and Warrant to Seize Property. There are filing fees for each of the enforcement methods but all fees can be claimed back from the debtor.

Should you require assistance with recovering money owed to you or your business please feel free to contact Ben McLean on 03 5226 4138 to discuss your matter.


By Website Team Technicians 23 Jun, 2017

The Powers of Attorney Amendment Act 2016 and the Power of Attorney Amendment Regulations 2017 have come into effect as and from 1 May 2017.

The updates provide the long awaited ability to appoint multiple ‘alternative’ attorneys.

This is particularly useful where clients wish to appoint their spouse as their attorney in the first instance, and only on the death or incapacity of that spouse, then an appointment of two or more of their children. Although this was previously possible by executing multiple enduring powers of attorney documents with special conditions, it is now possible to simplify this arrangement in a single document.

The updates also provide minor alterations to the forms, including the removal of the revocation clause in most instances. Unless specifically stated in the document, the execution of a new enduring power of attorney will revoke all previous appointments regardless of whether those appointments were made under the Instruments Act or the Guardianship and Administration Act or the Powers of Attorney Act.

Enduring powers of attorney remain an essential part of all estate plans. Should you wish to discuss any of the new changes please contact Jesse Rankine on 03 5226 4106 or by email at jesser@wightons.com.au.

By Website Team Technicians 23 Jun, 2017
We wish to announce that we have acquired the legal practice of the late Randell Bell. Mr. Bell’s assistant Beryl Smith has also made the transition to our office. If Mr. Bell’s clients have any queries we encourage them to contact us at our Geelong office.
By Website Team Technicians 23 Jun, 2017
Separated parents are often unsure or unable to communicate with the other parent when deciding what time the children will spend with each parent. The first step for separated parents is to attend for Family Dispute Resolution (“FDR”) through organisations such as CatholicCare or the Family Relationship Centre. This is similar to mediation.

Family Dispute Resolution allows the parents to negotiate care arrangements for children, including spending time with each parent weekly as well as special occasions such as Christmas, birthdays and school holidays. If determined to not be in the children’s best interest to spend equal time with each parent then the children should live with one parent and spend substantial and significant time with the other parent, which includes weekend and other short blocks of weekday time during a fortnight. Further, the issue of equal shared parental responsibility or sole parental responsibility which identifies who will make major issues relating to the children’s health, schooling and any other long term decisions will also need to be decided by the parents. If an agreement is reached then the FDR convener will draft a written parenting plan which both parents can sign.

A parenting plan is not binding and cannot be enforced by the Family Court or Federal Circuit Court of Australia if one parent does not comply with it. If either parent decides to make an Application to the Family Court or Federal Circuit Court then a signed parenting plan would be persuasive evidence for the Court to consider when making any Orders relating to any future care of the children.  

A parenting plan can be drafted into Consent Orders which may be filed in the Geelong Magistrates’ Court. Both parents must sign the Consent Orders. They are not required to obtain independent legal advice but this is recommended.

Alternatively, if parents have already reached an agreement for the children’s arrangements to spend time with each parent including special occasions then Consent Orders can be made without attending mediation. It should be stated that Court Orders are not mandatory.  

The parents must comply with the Court Orders. If either parent does not comply with the Orders then a Contravention Application will need to be filed with the Court.

If FDR is unsuccessful or one parent is unwilling to attend FDR, then the convener will issue a Section 60I Certificate which allows either parent to file an Application to the Family Court or Federal Circuit Court. The Court does not accept Applications in relation to children’s matters without the Section 60I Certificate unless there is an exemption, such as child abuse, family violence or is an urgent matter, such as a recovery of a child from the other parent.

All decisions relating to children are based on the best interests of the child. Our family law team would be happy to discuss with you any concerns you may have and work towards an outcome which promotes your child’s best interests.  
By Website Team Technicians 23 Jun, 2017
We have great pleasure in announcing that we have opened a new satellite office in Ocean Grove. This office will operate every Thursday and will be run from the offices of Roche Accounting, Shop 2, 65 Madeley Street, Ocean Grove. For further information please refer to the   contact   section of our website.
By Website Team Technicians 23 Jun, 2017

If a person dies without signing a valid will they die ‘intestate’. This means that the distribution of their estate will be made in accordance with the rules of intestacy.

These rules can be simple or complex depending on your family situation.

Two common misconceptions are that, if you die without executing a will, then:

1. Your estate will pass to the government; or

2. Your surviving spouse will inherit 100% of the estate.

Although both scenarios are possible, both are relatively rare. One requires the person to have died leaving no next of kin and the other requires the person to have died leaving a spouse but no children.

It is more common for a person to die leaving both a spouse and children. The current intestacy rule for this situation is as follows:

  • The spouse receives the first $100,000 plus 1/3rd of the balance; and
  • The children share the remaining 2/3rds of the balance.
For example, if a person dies with a spouse, two children and a $500,000 estate:
  • Spouse = first $100,000 + $133,333 (being 1/3rd of the balance) = $233,333
  • Child 1 = $266,666 (remaining 2/3rds of the balance) / 2 children = $133,333
  • Child 2 = also $133,333

The inequality of the current formula is better illustrated where there is a spouse, a single child and a $1,000,000 estate:

  • Spouse = $100,000 + $300,000 (being 1/3rd of the balance) = $400,000
  • Only child = $600,000 (being the remaining 2/3rds of the balance)

In the above example, the child obtains significantly more than the spouse. Most people would want the opposite.

Perhaps this is the reason why the new Administration and Probate and Other Acts (Succession and Related Matters) Bill 2016 now proposes to change the rules of intestacy. Under the new rules if a person dies leaving both a spouse and children the division will be as follows:

  • Spouse = first $451,909 plus ½ of the balance
  • Children = remaining ½ of the balance
  • NOTE: Only children that are not the children of the spouse are entitled to the remaining ½ balance, otherwise the Spouse will receive all of the estate.

This means that, typically, 100% of the intestate’s estate will pass to the surviving spouse unless there are children from other relationships.

The introduction of the above Bill illustrates the importance of having your own will as opposed to leaving the distribution of your estate to the default rules of intestacy. Because the rules are updated from time to time, it is impossible to know what the rules will be at the time of your passing. It would be naive to assume that the rules will not change again at some point. The only way to be completely confident of how your estate will be dealt with is to have your will prepared and executed with a suitably experienced solicitor.

Should you wish to know more on these issues, please contact Jesse Rankine on 03 5226 4106 or by email at   jesser@wightons.com.au .

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