Welcome to the 2014 Spring Edition of the BFG Report.
Can Anyone Challenge Your Will ?
It’s easy for a disgruntled family member to say “I’m going to challenge the Will”. However, there’s
only a few limited ways in which a Will can be ‘challenged’. The most common way for a challenge to be made is under family provision legislation. This allows certain people to make a claim on your estate. Each State and Territory has its own legislation and there are significant differences between the States and Territories. All States recognise that a spouse (married, de facto or same sex) or a child (of any age) is eligible to make a claim.
Some States have broader definitions than others. For example, the definition is very broad in Victoria where a neighbour was successful in a claim. In NSW there was a case where a son who lived in Victoria was able to make a claim in NSW against the estate of his mother who lived and died in Malta. He was able to make the claim because his mother owned real estate in NSW.
What Assets Are Subject To A Claim ?
Any asset that forms part of your estate is subject to a claim. In NSW, the court has even broader powers in relation to assets which normally don’t form an asset of your estate. These include jointly owned assets as well as superannuation. The court has power to deem such assets as ‘notional estate’ and use them to provide a benefit to a successful eligible person.
If Someone Can Make A Claim, Should You Bother To Make A Will ?
Yes, you should definitely make a Will. The courts respect and uphold the right of a person to make a Will, distributing their assets as they’ve instructed. Just because a person is eligible to make a claim doesn’t mean they will be successful. The courts will generally only favour applicants who can prove they have a genuine need, and that the deceased has failed to provide for them either during the deceased’s lifetime, or through their Will. In some cases, the poor conduct of an applicant may be the reason why the Willmaker wishes to disinherit them.
What Can You Do To Minimise The Chances Of A Claim Being Made Or Being Successful ?
Unfortunately, you can’t stop challenges from being made, however, you can take steps to minimise the likelihood of a claim being made. A professional qualified in the area of Wills and estate planning can help you plan for the possibility of a claim. In some States or Territories this may involve a review of the way in which you have your asset ownership structured. Courts in all States and Territories are able to accept into evidence statements from the deceased.
An estate planning specialist can also assist in preparing a statement (or affidavit) whereby the Willmaker (after their death) can give their evidence to the court. This may include details of the provision which the Willmaker may already have made in favour of the potential claimant, and also details of the conduct or behaviour of the potential claimant which the Willmaker believes is sufficient to justify excluding the potential claimant from inheriting a part of the estate.
Investment Market Review – Quarter Ending 30 June 2014
|Asset||Index||1 year return
|5 year return % pa||Comments|
|Australian shares||S&P/ASX 300 Accumulation index||17.25||10.95||The Federal Budget revealed a path to surplus over coming years, and many households will be impacted by the announced spending cuts and tax increases. As a result consumer confidence fell sharply and a spate of consumer related shares profit downgrades ensued. A rally in bond markets saw REITs and utilities perform strongly. The energy sector benefited from a jump in the oil price on rising tensions in the Middle East, whilst falling iron ore prices impacted a number of resource shares.|
|Listed property trusts||S&P/ASX 300 A-REIT index (property)||11.08||14.26||A-REITS posted impressive gains of 9.20% for the June quarter, significantly outperforming the broader market. The sector was supported by an increase in corporate activity. The RBA kept the official interest rate at 2.5% which continues to be a tail wind for the sector. Westfield’s restructure was finally completed in June after both shareholder and court approval.|
|International shares||MSCI World accumulation index (AUD)||20.30||11.48||International shares produced decent gains, despite international
growth data slightly disappointing against market expectations.
US first quarter GDP contracted by almost 3% on annualised basis, mainly attributed to the weather. Most major markets continued to rise, buoyed by expectations that international monetary policies will remain accommodative for the foreseeable future.
|Fixed interest and cash||UBS Warburg Comp. Bond All Maturities index||6.09||6.89||Fixed interest markets produced a solid performance over the quarter. Mixed economic data in the US prompted the Federal Reserve to revise its growth expectations for 2014 downwards, which pushed bond yields lower. In Europe, the ECB launched several stimulatory measures in an attempt to boost the region’s struggling economies and avoid the potential risk of deflation. Japanese bond yields dropped, aided by the extensive quantitative easing program. Credit markets remain supported with solid international liquidity back stops provided by major central banks.|
|Cash||UBS Bank Bill index (interest rate earned on short term to maturity of approx 45 days)||2.68||3.90||The RBA kept the official interest rate on hold at 2.5% over the quarter. Benign wage pressures should keep inflation in check over the near term, despite recent high core inflation data. The unemployment rate still remains a crucial data point for interest rate settings.|
High Yielding Internet Savings Accounts
Financial Institution Interest Rate
RAMS Saver 4.11% p.a.
St George – Maxi Saver 4.05% p.a.
ING Savings Maximiser 4.00% p.a.
BankWest – Hero Saver 4.00% p.a.
UBank – Usaver 3.81% p.a.
ANZ – Online Saver 3.80% p.a.
Rates sourced from RateCity.com.au and are subject to conditions and change. Rates are correct as at 27/8/2014.