*|IF:FNAME|*
Dear *|FNAME|*,
*|ELSE:|*
Hello,
*|END:IF|*
With Cup Week looming, we’re well into the year with Christmas just around the corner.
At this time of year, we’re recommending that clients consider those legal tidy-up jobs before heading off on holiday. That includes updates to wills, Enduring Powers of Attorney, and for those of you with family trusts, getting them updated before the new Trusts Act takes effect on 30 January 2021. You can learn about all of these in this issue.
Also, a reminder to SME clients: the Regional Business Partner Network’s COVID-19 Business Support scheme is still operating. This is a great chance to get funded legal advice for developing and improving your business. There's also the Management Capability Development Fund, which provides 50:50 funding for business planning, capital raising, managing resources, governance and finance.
Register now, or get in touch with us if you need some help through the process.
Key changes that will affect your family trust
The first major trust law reform in 70 years takes effect on 30 January 2021. The Trusts Act 2019 aims to make trust law more accessible to everyone, and will make it easier for beneficiaries to hold trustees to account.
If you have a family trust, here’s a round-up of the changes you need to know about.
Each of these changes could have an impact on your family trust, so for a fuller explanation or advice, please get in touch.
An introduction to Enduring Powers of Attorney for Personal Care and Welfare
An Enduring Power of Attorney (EPA) is a legal document which allows you to give someone you trust the power to make decisions about your health and wellbeing when you’re no longer able to make those kind of decisions. Here’s an example of where they might be used…
Sally’s father was diagnosed with Alzheimer’s five years ago. It was not until recently that she noticed a real decline in his memory and his ability to converse. She began to worry about her father being at home by himself and his ability to make decisions about his health.
Then she remembered that he had signed an EPA some years ago but had no idea how to use it or what powers it gave her.
READ MORE...
Dementia and wills
A will is a vital thing for everyone to have. It’s always best to get them done early and updated often, but they can be completed at many times in life—even when someone has dementia.
This was confirmed in Lord Templeman’s case. He made his final will at the age of 88 after suffering the onset of dementia for two years. His son from his first marriage challenged the will which favoured the daughters of his second marriage.
Interestingly enough, Lord Templeman himself had created the golden rule about this in the case of Kenward v Adams. It was simply that “the making of a will by [an aged testator or one who has suffered a serious illness] … ought to be witnessed or approved by a medical practitioner who satisfies himself of the capacity and understanding of the testator and records and preserves his examination and finding.”
It all comes down to the degree of dementia. In Lord Templeman’s case Fanshaw J held that he had a deficient “episodic memory” (short term memory) but his “working memory’ was good and not sufficiently affected to lack capacity. He was unable to remember some things (but not everything) that had happened to him in the recent past.
In his judgment he said that judges dealing with wills should guard against treating deficiencies with memory as being “the equivalent of incapacity”. In principle “testamentary capacity is not a test of memory”.
Well, that’s it for our news this month. As always, we’re just an email or phone call away for any questions, help or advice. We look forward to chatting next time. And best of luck if you’re going to the races.
At this time of year, we’re recommending that clients consider those legal tidy-up jobs before heading off on holiday. That includes updates to wills, Enduring Powers of Attorney, and for those of you with family trusts, getting them updated before the new Trusts Act takes effect on 30 January 2021. You can learn about all of these in this issue.
Also, a reminder to SME clients: the Regional Business Partner Network’s COVID-19 Business Support scheme is still operating. This is a great chance to get funded legal advice for developing and improving your business. There's also the Management Capability Development Fund, which provides 50:50 funding for business planning, capital raising, managing resources, governance and finance.
Register now, or get in touch with us if you need some help through the process.
Key changes that will affect your family trust
The first major trust law reform in 70 years takes effect on 30 January 2021. The Trusts Act 2019 aims to make trust law more accessible to everyone, and will make it easier for beneficiaries to hold trustees to account.
If you have a family trust, here’s a round-up of the changes you need to know about.
- Mandatory and default trustee duties. Duties are now categorised as “mandatory” (which must be performed by trustees and can’t be contracted out of) or “default” (which can be overridden). Any attempt to exclude a mandatory duty will have no effect. Trying to do so might be taken as evidence there was no real intention to create a trust, thereby invalidating it.
- A presumption requiring trustees to make information available to beneficiaries. That’s basic information to all beneficiaries, and further trust information to beneficiaries who request it. There are exceptions to this, and in some cases, a trustee can withhold information.
- Appointment and removal of trustees. The powers for appointment and removal of trustees have been updated and broadened to minimise the need to involve the court.
- Records retention. Trustees will be required to keep and hold key trust documents. In addition to documents such as the trust deed and deeds varying it, it will include copies of trustee resolutions and minutes, contracts and financial statements, amongst others. This will require a significant change in practice for some trustees, through more involvement and regular trustees meetings and records of the resolutions adopted.
- Exemption and indemnity clauses. The Act makes it clear that trust deeds must not limit a trustee’s liability or provide an indemnity for dishonesty, wilful misconduct or gross negligence. This means trustees can no longer rely on broad indemnity clauses to protect them against gross negligence. They may still obtain protection in relation to ordinary negligence.
- Ability to delegate certain trustee powers or functions to another person. In practice, this could be, for example, an investment adviser for a family trust looking to place money somewhere. It could also be helpful for trusts where a life-interest is involved.
- Special trust advisers. The Act allows special trust advisers to be appointed to advise and assist trustees. They don’t have the powers or duties of a trustee, and there’s no obligation for trustees to follow the advice they receive.
- Abolition of the rules against perpetuities and accumulations. The rule against perpetuities and remoteness of vesting is abolished. Trusts that might otherwise have breached the rule against perpetuities for failing to specify a termination date are deemed to terminate after 125 years.
Each of these changes could have an impact on your family trust, so for a fuller explanation or advice, please get in touch.
An introduction to Enduring Powers of Attorney for Personal Care and Welfare
An Enduring Power of Attorney (EPA) is a legal document which allows you to give someone you trust the power to make decisions about your health and wellbeing when you’re no longer able to make those kind of decisions. Here’s an example of where they might be used…
Sally’s father was diagnosed with Alzheimer’s five years ago. It was not until recently that she noticed a real decline in his memory and his ability to converse. She began to worry about her father being at home by himself and his ability to make decisions about his health.
Then she remembered that he had signed an EPA some years ago but had no idea how to use it or what powers it gave her.
READ MORE...
Dementia and wills
A will is a vital thing for everyone to have. It’s always best to get them done early and updated often, but they can be completed at many times in life—even when someone has dementia.
This was confirmed in Lord Templeman’s case. He made his final will at the age of 88 after suffering the onset of dementia for two years. His son from his first marriage challenged the will which favoured the daughters of his second marriage.
Interestingly enough, Lord Templeman himself had created the golden rule about this in the case of Kenward v Adams. It was simply that “the making of a will by [an aged testator or one who has suffered a serious illness] … ought to be witnessed or approved by a medical practitioner who satisfies himself of the capacity and understanding of the testator and records and preserves his examination and finding.”
It all comes down to the degree of dementia. In Lord Templeman’s case Fanshaw J held that he had a deficient “episodic memory” (short term memory) but his “working memory’ was good and not sufficiently affected to lack capacity. He was unable to remember some things (but not everything) that had happened to him in the recent past.
In his judgment he said that judges dealing with wills should guard against treating deficiencies with memory as being “the equivalent of incapacity”. In principle “testamentary capacity is not a test of memory”.
Well, that’s it for our news this month. As always, we’re just an email or phone call away for any questions, help or advice. We look forward to chatting next time. And best of luck if you’re going to the races.
Regards,
Clive, Grant and the Team at Canterbury Legal
