Rod Cunich answers your most-asked end-of-life questions

Estate planning lawyer Rod Cunich answers the questions that are most regularly asked.

Your most-asked end-of-life queries

YourLifeChoices members send estate planning lawyer Rod Cunich dozens of email queries every month. He would love to answer them all – and does manage to get to most – but here are some of the most-asked questions and his responses.

Q1. My father keeps threatening to write me out of his will, even though I have looked after him for several years. I don't think he has his full mental capacity but he won't visit a medical professional to be assessed. Is there anything I can do to protect my rights in his will?

A. First, let’s understand what capacity is required to write a will, as it’s much more basic than is commonly believed. In simple terms, your father only needs to understand what assets he owns, who he wishes to leave them to, and who he is leaving out from those who may have a claim on his estate. If he understands those matters when he signs his will, then the will is likely to be valid. Even people with dementia can execute a valid will in a lucid moment if they meet this test at the time they sign the document. If he doesn’t, it is not valid. One option to head off a new will might be to apply to have a guardian appointed over his personal and financial affairs on the basis that he lacks capacity. Search the internet for ‘Appointment of Financial Guardian’ and you’ll find that your local state authority can assist in this regard. You do not need a solicitor to do this. You’ll have to provide evidence of his conduct to prove incapacity and through the relevant tribunal you can obtain a medical opinion.

But what if he does sign a new will? If he does, you have two possible remedies and both involve challenging the will once he passes away. First, you could assert he didn’t have capacity to make the will. But absent medical evidence means you’ll have had to maintain a diary to record his behaviour and level of cognitive understanding to help prove his mental capacity.

Given the test referred to above, it is very difficult to prove mental incapacity in the absence of medical evidence, but the more evidence you have of impaired cognitive function, the better your chances. Second, as the son, you have a statutory right to challenge the Will on the basis that, in all the circumstances, your father failed to make adequate provision for you.

The court will examine a comprehensive list of issues, including the care you provided, the competing interests of other beneficiaries and their respective financial circumstances, and if satisfied that you should have received an inheritance, they have the power to re-write the Will to make appropriate provision for you.

This type of application is very common and the courts are quite skilled at working out ‘what your father should have done’. You’ll often find competent lawyers who will conduct this type of case on the basis that they only charge if you are successful.

Q2. Is there a certain amount I can bequeath so my will cannot be contested?

A. There is a common misconception that if you leave someone a small amount of money in your will that it will prevent them challenging the will. Whether you leave them nothing or something makes no difference. If they believe they are entitled to more, then they can commence proceedings to challenge your will.

Certain family members, by virtue of statutory right, and others (who can demonstrate to the courts that they have an entitlement to a share of your estate) can challenge your will.

In assessing their claim, the court looks at about 18 different factors. It is a complex exercise that involves as much art as it does science.

If the challenger satisfies the court that they have an entitlement, the court will make orders to ensure they receive their entitlement regardless of the sum left to them in your will.

Q3. Is there a way to avoid my will being contested if I leave more money to one child than to another?

A. You can leave your estate to whoever you wish. That said, if you favour one child over the other, the less favoured may challenge the will on the basis that you made inadequate provision for him. There is no ‘magic’ percentage or recipe to avoid a challenge. The best thing you can do is chat to the one who has done well and tell him what you plan to do and see what the reaction is.

Q4. We are a married couple with one married daughter and two grandchildren. When making a power of attorney document, should I nominate my husband and daughter to act on my behalf? And should my husband name me and my daughter to act on his behalf? Would this document still be legal if either of us was incapacitated and both our names and our daughter’s name were on the document?

A. Commonly, couples first nominate each other as their sole attorney, and then name their child – in this case, your daughter – or children as back-up if the spouse can’t do the job due to illness or death.

For those who do appoint their children, it’s recommended that you appoint them jointly so that they can share the burden and also keep an eye on each other to minimise the chances of abuse of powers.

Joint appointments can cause inconvenience if, for some reason, it’s hard for the attorneys to communicate. Some recommend using a solicitor, accountant or professional friend to minimise the chance of an attorney misusing his/her powers and using your money for unauthorised purposes. The downside of this is that they would charge a fee for the work they do.

Q5. Is it safe to prepay a funeral?

A. All reputable funeral directors place moneys received from prepaid funerals into an interest-bearing trust account so it is always available and safe if the funeral director becomes insolvent. Funeral insurance and similar products are problematic because people often live so long that they pay more in premiums than the funeral costs, and if you stop paying you get nothing in return.

Rod Cunich is a lawyer with more than 30 years’ experience who specialises in estate planning. If you have a question for Rod, simply email it to newsletters@yourlifechoices.com.au

Disclaimer: This information has been provided by Rod Cunich and should be considered general in nature – legal advice should be sought.

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    COMMENTS

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    KSS
    28th Dec 2018
    10:24am
    Can we just get one thing straight: children have no 'right' to expect to inherit anything from their parents. The assets belong to the parent and they can do with them exactly what they wish including leaving it all to a cats home if they want.

    The fact that three of these 5 questions are about the distribution of assets just shows how materialistic, grabbing and punitive society has become. You've got the child who thinks she deserves the inheritance simply because she looks after her Father (well boo hoo! that's what families should do), then there is the Father who wants to either cut out one child altogether (some sort of punishment?) or severely restrict the inheritance of one child in favour of another (a reward for not doing as well as the more successful child and punish the successful child for doing well). What happened to "I love my children the same" apparently not any longer.

    If one thing brings out the best and worst in people it is the death of a relative and the fight over the assets - often before the funeral is held.
    Old Geezer
    28th Dec 2018
    11:07am
    It makes leaving a will useless.
    BAT
    28th Dec 2018
    11:16am
    Totally agree KSS.You have worked hard for years so enjoy .If anything leftover share equally.A lot of people survive without the expectation of inheritance.
    Anonymous
    28th Dec 2018
    11:33am
    I absolutely refute the statement "the courts are quite skilled at working out ‘what your father should have done’.

    From personal experience, most cases don't even get to court because of the appalling process that is followed and the gross injustice of it. Neither executors nor named beneficiaries have any rights at all.

    "You’ll often find competent lawyers who will conduct this type of case on the basis that they only charge if you are successful.'" Yes, you will. And the court will hand you a loaded gun to hold at the executor's head and extort to your heart's content. There will be facility for highlighting lies or abuse of court process. You will be allowed to refuse to participate in the ''compulsory'' settlement conference and instead have your barrister impose costs on the estate in the tens of thousands by running a private bargaining session with the executor's barrister. If the estate is small, nothing other than the claimant's and beneficiaries claimed ''need'' will be assessed. Fairness will be irrelevant. And the estate will be rapidly eaten up in obscene legal costs, which further denies the executor or named beneficiaries any rights at all because they simply can't afford the cost of defending.

    It's a disgraceful system designed to feed greed and unconscionable conduct for the benefit of lawyers and barristers, and with no regard for the moral entitlement of the deceased to choose who should benefit from their lifetime of work.
    Anonymous
    28th Dec 2018
    11:43am
    And further, the court would NOT HAVE A CLUE what a parent ''should have done'', because they have no way of knowing all of the facts of a matter. For example, if one child from a blended family inherited a lot of money from a parent and the other gets nothing, why shouldn't the parent favour the one who got nothing? But the courts won't uphold that logic. Nothing in the NSW Act mentions balancing unfairness in blended families. As long as the favoured child wastes all the money, or has been lazy and indolent while the other worked and earned an equivalent or greater amount, the court will favour the claimant's unfair claim.

    In many cases, one child has received their share early - either by gift, theft, or fraud. The court often ignores that benefit and focuses solely on what each party has now.

    Why shouldn't a parent repay a loved one for dedicating years (and doubtless considerable money to meet incidental expenses and lost earning opportunity) to their care. Yes, family should care for loved ones without expectation of reward - and they DO. But when one does care and others ignore all obligation, why shouldn't the parent favour the one who has toiled to make their last years comfortable? Yet a drug addict or alcoholic who has never worked can walk in and claim ''need'' and be indulged. Disgusting!

    There are countless other situations where the law is patently unfair or is totally disregarded.

    The most appalling feature is that the claimant can gain free representation with no risk, yet the defendant - despite evidencing that a dozen diligent endeavours to achieve resolution without legal costs were rejected outright - suffers hideous cost and the threat of having to pay the claimant's costs if he/she doesn't offer a large enough settlement prior to the court case. How can ANYONE deem that reasonable? Either he/she must make an outrageously high amount that the greedy claimant will accept, or risk the entire estate being wiped out because the judge randomly decides to award $1 more than what may have been a perfectly reasonable - or even generous - offer.

    NO, ROD CUNICH. NOTHING ABOUT THIS DISGUSTING SYSTEM IS IN ANY WAY REASONABLE. PLEASE STOP JUSTIFYING IT. IT'S DISGUSTING.
    Rosret
    28th Dec 2018
    3:24pm
    Of course they have a right to expect to be treated fairly in a Will. I cannot understand anyone who wouldn't gift their descendants no matter how wayward a child turned out to be. Parents raise their children and they are responsible for both the nurture and the nature of the children they bought into the world.
    To treat a child unfairly upon the individual's death is a reflection of the parent not the child.
    Retired Knowall
    28th Dec 2018
    3:27pm
    Absolutely correct OGR, The Law is an ASS.
    I have friends in the legal Profession and they will testify that our system is broken.
    If you want to gift something from your estate, do it before you go.
    Anonymous
    28th Dec 2018
    6:21pm
    Rosret, it's not for any third party to determine what is fair. It may well be fair and proper for a child to be excluded from a parent's will, or left less, due to particular circumstances that have nothing at all to do with behaviour or relationship. The examples I quoted of a blended family, or of a parent gifting extensively to one child before death are specific instances where fairness dictates leaving less - yet often a child is too greedy to acknowledge their past benefit and grasps the opportunity to claim more.

    I loaned money to a needy elderly relative without any formal debt agreement because the person had a paranoid fear of owing money and would not have accepted badly needed help if a formal agreement were attached. The presumption of both parties was that the debt would be repaid from the estate, but even with documentary proof of my payments I could not claim repayment because a greedy, self-serving liar who had caused the deceased's needy status by dishonest dealing claimed ''need'' and was indulged very unfairly.

    As for your claim that the parent is responsible for the child - rubbish! Sorry! But some children turn out selfish, greedy, dishonest monsters with no respect for parents despite the parents doing everything conceivably possible to nurture, love and guide. And the fact that families often have one or two ''black sheep'' and several golden children is often proof. In blended families, inheritance or influence of one parent might define the character of their children while children of a different parent turn out the opposite. Experiences in early adulthood that can't be anticipated by parents and may not even be known about can turn children who were respectful and decent into horrible haters, abusers, or addicts.

    And finally, who is the judge of what is ''unfair''. Claimants in will disputes often claim very unfairly against very fair wills. The system indulges the most dishonest and patently selfish and wrongful claims. I think it would be quite rare, in fact, for a will contest to have any real substance. Most decent people recognize the rights of the deceased and don't expect to inherit. I think it takes a rather unethical and unconscionable individual to launch a will dispute, particularly given the way the legal system operates to deny executors and named beneficiaries any fair defence.

    Retired Knowall, gifting before you go is obviously sensible, but again our broken system often prevents it. For example, pensioners lose their income if they gift. With no certainty of when they will die or what expenses they will incur before death, many can't afford to gift pre-death. It's often a Catch22 situation. Struggling elderly may need financial support from someone they anticipate should be repaid from the estate, but they are prevented from favouring their beneficiary unless a formal debt agreement exists, and the debt agreement can compromise both borrower and lender under our wrongful pension system.
    sunnyOz
    28th Dec 2018
    12:14pm
    Very poor article - this belief that children are 'entitled' is obscene. I was a single parent and fought bloody hard to bring up my daughter with a good upbringing and education. Unfortunately, she chose her own path and unless I was being her bank, did not want to know me. Also thought it was better to be unemployed, drinking and drugs, and bumming around the country. I had my home and car robbed too many times, so moved interstate. Meant me giving up my much loved job, friends and hobby. But I had a life. So my parents disinherited me, leaving my share to my child. Was only small amount and I couldn't have cared less.
    But already my daughter is bragging to friends and family about 'her inheritance'. I have fought hard to buy my own home, good car, now retired on pension. Why shouldn't I be able to leave my miserly assets and possessions to whom I want?
    What on earth is a damn will for? Why waste your money having one written up?
    Anonymous
    28th Dec 2018
    6:41pm
    So sorry for you, SunnyOz. I can imagine how painful it is to have invested so much in your daughter only to have her choose her own path and reject you. I recently defended a will against a claimant like your daughter. She had robbed and defrauded her mother, and benefited from a large inheritance from her father. A half-sibling had forfeited her entire entire inheritance from her father to benefit her younger half-sister in a time of need, then supported the deceased through her old age after her younger child abandoned her. Yet the younger child successfully challenged the will on the grounds of ''need'' - having hidden assets in a foreign bank and lied to claim disability that didn't exist.

    The estate was simply too small to allow a court hearing with the high cost of witnesses and exposing evidence. In the end, neither child got much but the lawyers made a motza. The will was fair, though it would have taken expert knowledge of past history to understand why and no judge was ever going to have that knowledge because the estate was too small to cover the cost of presenting it.

    Rosret's assumptions are simplistic and invalid, based on assumptions that are totally uninformed and irrelevant. If only life was always as he assumes it should be!
    TREBOR
    28th Dec 2018
    12:21pm
    Indeed - appoint your kids joint power of attorney - seen that one, with the eldest being the POA, in action and the fallout is still going on.

    Whenever there is money insight there will be strife.
    TREBOR
    28th Dec 2018
    12:24pm
    Oh - and because of the way the ex's kids are treating her, I've suggested to her that she leave it all to her grand-kids - her youngest son agrees and said so independently. All three have had a kick from their grandmother (their father was an only child), and are not in any real need... the ex sees that the grand-kids could do with a start for education and life...
    Anonymous
    28th Dec 2018
    6:43pm
    Leaving to grandchildren can be problematical. In some states, children are presumed to have entitlement. Grandchildren do not unless they resided with and were financially dependent on the grandparent. If just one child is selfish, the will can be challenged and overturned, no matter what the views of the others.
    MD
    28th Dec 2018
    12:57pm
    "Where the body lies, there the vultures gather."
    adbob
    28th Dec 2018
    12:59pm
    What has not been mentioned is statutory time limitation.

    The laws concerned reside with the states - they are mainly similar but differences might be critical in any one particular case.

    People often feel it would be rude to fight over money so soon after a loved one has died

    But 6 months after the grant of probate is often the limit - and you might not have a way of knowing when probate is granted.

    As with many areas in which seniors might get ripped off - there are laws to prevent it - but nobody policing it.

    Re enduring powers of attorney. Lawyers generally advise you to have one - "and for a small fee we'll draft it for you". They are incredibly powerful documents - and you hand over all your property rights to the "donees".

    "Someone you can trust" - that needs to be implicitly - and if you trust them today will you trust them tomorrow - or in 5 years time - when you've forgotten you ever wrote one.

    In most states when someone loses their marbles suitably well-meaning people can apply anyway to the appropriate authority - in SA it used to be called the Guardianship Board - now it's called SACAT, and get the necessary powers, and at least then they'll have to make out their case according to the circumstances prevailing at that time.

    They say: Be nice to your children - they will be choosing your care home. Cerainly. But don't be too nice. There's an inherent conflict of interest for donees of a Power of Attoreny if they also expect to inherit the residue of the estate.
    KB
    28th Dec 2018
    2:51pm
    Is money the be la and end all of everything? I have heard of parents who passed money onto their from one parent children before they died. One sibling received nothing even though thee was no issue with the relationship. I have heard of people losing their inheritance due losing contested Simple solution. Spend all the money or give to charity. There are some millionaires like Bill Gates who do not intend leaving inheritances for their children.
    Rosret
    28th Dec 2018
    3:31pm
    I am sure Bill Gates' children will be well cared for well.
    So many people here have written such horrible things in regards to equality of the division of inheritance. I can only imagine they have never had to live with the affirmation of denial of love from their parents. Fortunately my parents were kind, loving and sharing. It would have broken my heart if they thought I was unworthy even if they only had $1 to share.
    Anonymous
    28th Dec 2018
    6:27pm
    Bill Gates will ensure his children are well provided for by other means than his will, KB.

    Rosret, only a greedy person interprets fair treatment in a will as an affirmation of denial of parental love. Money is NOT a measure of affection. And perhaps those who interpret it that way should analyse their own conduct and the hurt they may have caused a parent who loved them dearly and suffered endlessly because of their refusal to offer love and respect in return? Love is a two-way street!

    28th Dec 2018
    6:50pm
    My suggestion to the person who asked the first question would be - as mercenary and distasteful as it may be - keep a meticulous diary of everything done for your father and all costs incurred, together with acknowledgment of any gifts/benefits received. When he dies, present that diary as evidence of entitlement. It may not be of much real help given the disgustingly unfair system, but it might be of some use. If the opportunity exists, claim payment for your services as they are offered. It cost me a lot to care for a loved one who offered over and over again to pay me, but I foolishly refused - thinking it wrong to take her money prior to death and confident of inheritance. In hindsight, I should have taken whatever she offered.
    Pardelope
    29th Dec 2018
    5:04am
    My late father said that (in his eyes) receiving an inheritance was a bonus - not a right. He also said that a loan did not miraculously become a gift. In his will he gave equal shares to his children - minus any listed loans they had not repaid to him (proved by documentation). He said, if this was not done, it would be unfair to the debt-free children as they would receive less than the share they should receive.

    Sometimes, people make claims against an estate simply to delay and reduce the amount received by the beneficiaries - by way of legal costs.

    If you die intestate e.g. everyone named as a beneficiary in your will died before you - or your will cannot be found - the law will find all your close and distant relatives, and distribute the estate according to the rules in the relevant state. This might include people you don't even know existed - or whom you would not wish to have benefit. It will exclude close friends or organisations you would wish to leave to. Having no living individuals left when you die and being intestate, can be avoided if you order that their share be put back into the pot when they die - and have a final order that if there are no survivors, the estate goes to some sort of charity or other organisation.

    Enduring Power of Attorney is dangerous as it gives the nominated person complete control before you are dead. It can be reversed, and It becomes defunct when you die. The will then takes over. The person who has the POA may be subjected to accusations of bad management. They may also become incapable of handling everything. Think carefully before giving - or taking on POA.

    Sometimes, one person cares for or shows interest and concern for a person over many years - whilst another one may only visit when death is imminent. The dying person may be so delighted to see the long lost prodigal, that they change their will in their favour - leaving out the loyal, caring, and reliable person.

    My advice is to keep quiet about your finances - and the contents of your will. Have the will stored (free of charge) in the Public Trustee "Will Bank". You could also leave explanatory letters along with details of your assets or liabilities - and your reasons for doing certain things. If you use Will bank, they do not have to be your executor. Check what happens in your state as they do differ.
    Anonymous
    29th Dec 2018
    8:01am
    All very well, Pardelope, but the problem is that it only takes one greedy, unconscionable person to undo all the diligence and fairness of the deceased, wipe out everything they wanted to achieve with their will and line the pockets of lawyers. And NOTHING can be done to prevent this other than distribute equally - which may be the most unfair and patently wrongful manner to distribute. The law MUST be changed. It's disgusting. It's unjust and unfair in the extreme. It demolishes family relationships. It causes emotional stress and misery. It allows vicious people to deliberately deprive others without any fair cause and without any risk of cost or suffering to the vicious party. It makes a total mockery of everything the courts pretend to stand for and every stated objective of laws and legal processes. It is an utter disgrace and everyone who has ever endorsed it or benefited from it should hang their heads in deep and abiding shame for the cruelty they inflict and the misery they cause.
    Anonymous
    30th Dec 2018
    3:28pm
    never give an Enduring Power to Attorney to just one person.
    Anonymous
    30th Dec 2018
    3:31pm
    I have mentioned this before on this site.

    Please look at taking out an Insurance Bond where you can name the person you want to get the money on your demise. This does not become part of your Will...it is entirely separate and on your death it will be paid immediately to the beneficiary.

    You could make out as many as you like to whomever you like ...I think it is a great idea myself as it bypasses the Will and no one can make a claim.

    I know what I am talking about as my father gave me one and it came to me within weeks of his death and in fact it came to me before any inheritance through the Will.
    Pardelope
    30th Dec 2018
    8:02pm
    OGR I absolutely agree with you. Any amount of money will bring out "the green eyed monster" in certain individuals.

    It often is more about deep-seated family tensions than the actual money or objects e.g. I was not loved as much, they owe me for all I did, I have greater need, I am more deserving, I was busy and couldn't help, I didn't want another sibling, they were more successful than me etc. I have seen problems between siblings which go back to early childhood. I have also seen a dispute over an old black and white TV, and a demand for a Chamois cleaning cloth.

    There is no perfect solution - other than to dispose of it all before you die.
    KSS
    29th Dec 2018
    4:03pm
    A will is not about being 'fair', it's about how the owner of the assets wants them distributed and that might mean all, some or none of their offspring may benefit. So be it. It's not the offspring's property or money to claim.

    The law already provides for the spouse and dependant children (eg a disabled adult child) and so it should. All others should not be able to contest anything, the deceased owner's stated gifts should stand.
    Anonymous
    29th Dec 2018
    5:40pm
    Agreed, KS, but sadly the greedy lawyers insist the system must be designed to line their wallets, so they make it a free-for-all and in the end the genuinely entitled get the least.

    30th Dec 2018
    3:27pm
    I am agnostic BUT most religions say we will come back again. I am having a bob each way....if that is the case I want to leave everything in my will to MYSELF...so that when I do return I will not have to work ever again.

    Therefore my question is: Can I live my inheritance to myself?
    Anonymous
    30th Dec 2018
    7:50pm
    Noodles, you reminded me of a joke. Scrooge wanted to take his money with him to heaven. Everyone said it was impossible, but he was determined to find a way. He trusted nobody, so he solicited three helpers -figuring even if two let him down he'd still get to take 1/3rd of his wealth, and hopefully the three would keep each other honest. He gave 1/3rd of his wealth to each of his doctor, lawyer and priest, with instructions that they should place it in his coffin.
    At the wake, the doctor was asked if he put the money in the coffin as instructed. 'Of course,' he replied. I thought it ridiculous, but I took an oath and I could never cheat a patient. He looked at the lawyer. "I also took an oath,'' said the lawyer, "and I am an honest man. I would never cheat a client."
    They both looked at the priest who said "I am a man of God. I could never do anything dishonest, much less harmful to one of His flock. I put the money in the bank and wrote a cheque."