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Often accountants will order trust documents (superannuation deeds or discretionary/family trusts) from various providers, and the clients will sign these or adopt them without taking legal advice. These widely used documents are not always correct, and the issues with them tend to be legal issues so they are not appreciated by the accountants. A common problem with documents that we see include referenced to “legal personal representatives” in discretionary trusts when that term is appropriate to superannuation law. As a result, a discretionary trust deed saying that if the appointor or principal is made bankrupt, then their “legal personal representative” becomes the appointor in their place (and many trust deeds do have this provision), one interpretation is that the trustee in bankruptcy takes the role. That would essentially be the last person that you would want to become the appointor, as they would then have the power to appoint a new trustee. Another problem that we recently saw came from the incorrect use of capitalised terms in a Superannuation trust deed, which created uncertainty with the operation of the death benefit provisions. Essentially the clause had a different meaning to what was intended. This was a trust deed that was automatically updated by the provider, and put into effect by the various accountants who would not have any idea about the potential issues. A third issue that we have seen is where the binding nomination forms attached to the deed do not strictly follow the superannuation deed itself. The fund deed has to be followed strictly for the nomination to be binding, but where there is a conflict in its terms this can be impossible. The lesson – if there is one – is that trust deeds and fund deeds are legal documents, not financial ones. Accountants generally will not be giving any advice in relation to them, and will often be assuming that they are correct, but this is not always the case. They should still be checked by a lawyer. For advice on trusts and binding nominations contact our commercial Team of Peter Muller, Jessica Murray, and Megan Hanneman – peterm@qbmlaw.com.au

It seems as though this blog page could be entirely populated by recent decisions on home made wills.  Certainly, home made wills are fertile ground for litigation with the resulting benefit flowing to lawyers acting in that litigation.  In this case, the Queensland Supreme Court in Bain v Demarchi [2023] QSC 199 has considered a home made will in which there was no named beneficiary in the event that the named beneficiary died.  Briefly, the facts were that Paulo Demarchi used a will kit to make a will in 2009.  He appointed his mother Rhonda Bain to be his executor and sole beneficiary.  He had no wife or children himself. Paulo died on 21 December 2022, and his mother Rhonda died on 3 January 2023, leaving her husband (Paulo’s stepfather) Desmond surviving her.  This triggered the application of section 33B Succession Act which provides that (absent a contrary intention), if a gift is made in a will to a person who dies within 30 days of the will maker dying, then the will takes effect as though the beneficiary had died immediately before the will maker.  In this case, if there was no beneficiary, then Paulo’s brother would receive the estate under the intestacy rules.  If the gift to Rhonda was valid, then Rhonda’s husband Desmond (ie Paulo’s stepfather) would be entitled to the estate as the beneficiary of Rhonda’s will.  The court found that there was no contrary intention to the operation of section 33B Succession Act, and that as a consequence, the estate would be dealt with according to the rules of intestacy.  This had the result that Paulo’s brother would be entitled to the estate, rather than Paulo’s stepfather.  Of course, reserve beneficiaries are something that lawyers will generally include in their wills when preparing them for a client.  Had Paulo seen a lawyer, then for a relatively modest cost, his estate would have done without the angst and cost of a Supreme Court application which has no doubt left his stepfather and his brother quite unhappy (although his brother would be likely to be quite a bit happier than his stepfather).  It is unlikely that the costs of the exercise would have been less than $50,000. This recent decision is yet another demonstration of the risks associated with people using will kits.  For advice in relation to wills, contact our lawyers Peter Muller at peterm@qbmlaw.com.au or Jessica Murray at jessicam@qbmlaw.com.au

Often when drawing wills, lawyers are faced with instructions where the will maker does not want to give a direct gift to their child for various reasons.  In some cases, it might be that they are estranged from the child, or that they have had a very bad history with the child, or that the child is under the influence of a particular religion, or that they are bad with money, or have a drug habit, or that the will maker is concerned that there will be a marital issue and that the spouse will take half of the gift.  In some of these situations, the will maker might decide that they would like to leave the gift to their grandchildren instead of the child, thinking that this is a way in which the child’s family will benefit from the making of the gift.  But the will maker should give consideration to estate claims which arise. A will maker generally has a moral obligation to consider the needs of their children when determining the distribution of their estate.  They have no such obligation in the case of their grandchildren, unless the grandchildren are dependant on them.  So when it comes to people who might make a claim against the estate for further provision (see here https://qbmlawyers.demo2.website/estate-lawyers-gold-coast/challenging-a-will/), the grandchildren do not have a right unless they are dependent, whereas the child will always have that right. The effect of this is that if a child then makes a claim for further provision from the estate, having received nothing, then the estate can have an obligation to pay the child as a result of a successful family provision claim, in addition to the obligation under the Will to pay the grandchildren – ie the beneficiary sought to be excluded will potentially recover twice through a court ordered gifted to them, and the benefit that they have through their children being provided money under the estate as well.  For this reason, will makers should appreciate the risks of excluding their children from gifts, even if they leave a gift to their grandchildren to substitute for it.  While in some cases, a court might vary the will to deprive the grandchildren of the benefit of a gift so as to allocate it to the applicant child, this would not be a certain outcome, and furthermore, by the time that a court came to make determinations of this nature, it is likely that the estate will have suffered costs burdens well exceeding $100,000. Also there is the disastrous emotional impact of it all, essentially pitting family members against each other. For advice in relation to estate planning and claims against estates, contact our lawyers Peter Muller at peterm@qbmlaw.com.au and Jessica Murray at jessicam@qbmlaw.com.au

Pay secrecy clauses in employment contracts (ie clauses that forbid an employee from sharing information about their pay or terms, or asking any other employee about their pay or terms) are unlawful in any new written employment agreement as and from 7 June 2023.  If the employment contract was made between 7 December 2022 and 6 June 2023, the pay secrecy terms cannot be enforced. For employment contracts made before 7 December 2022, the pay secrecy terms will continue until the agreement is changed. These rights and obligations arise under section 333B, C and D of the Fair Work Act and are intended to prevent the restriction on employees discussing the terms of their employment, so as to promote fairness in the workplace. Of course, there is no obligation on an employee to respond to enquiries from other employees about those terms. For questions in relation to employment, please contact Peter Muller at peterm@qbmlaw.com.au or Megan Hanneman at meganh@qbmlaw.com.au