The recent Insight program which aired on SBS titled ‘Inheritance’ was extremely interesting. It outlined some of the different experiences that people have with inheritances. In some cases, the experiences were positive. In other cases, not so much.
Some of the important take home messages are that there can be significant costs involved in contesting or challenging a will, particularly if the matter proceeds to a Court hearing. Costs are at the discretion of the Court and normally follow the event. This means that the successful party is usually entitled to have their ordinary costs paid by the other party. However, ordinary costs do not mean the entire amount of the party’s costs. Typically, ordinary costs are about 70% of a party’s actual costs.
In addition to financial costs, contesting or challenging a will can take an emotional toll on you. It can be stressful to be involved in Court proceedings. While your legal team will support you, people often prefer to avoid litigation due to the stress and the impact that it may have on a person’s health, work and family life.
Being appointed as an executor is an important responsibility, but the role can be stressful, particularly if another party chooses to contest the will and the executor is named as the defendant in those proceedings. Additionally, if the deceased had debts, the administration of the deceased’s estate can prove burdensome.
You may wish to consider appointing a professional executor to alleviate some of the pressure from your family, or if you do not have a suitable person to name as your executor. However, when choosing an executor, please keep in mind that professional executors will charge for acting as executor, while a family member usually does not charge.
Taking a collaborative approach with respect to your estate planning is key, particularly where you have a family business. In many cases, it would be beneficial to have discussions with your family about your estate planning. Family meetings can help to tease out various issues surrounding inheritance and your family business. They can also provide insight and information to your family members about how your business operates, the various stakeholders, and business assets.
It is also important to keep your documents up to date. The Insight program outlined that often, people make a will and then do not touch the document for 30 years. This means that at the time of their passing, the will may potentially be out of date. For example, property listed in the will may have been sold or disposed of years ago and replacement properties should have been referred to. Additionally, people named in the will may have passed away before the testator. This means that gifts may fail and the testator’s wishes may not be carried out as they initially intended. Therefore, it is essential that you conduct regular reviews of your estate planning documents. We recommend an annual consideration of your estate planning and when events occur that impact it, immediate attention to your estate planning documents will be necessary.
If you have any questions about inheritance, please call one of our lawyers. We have an experienced team who can handle all your estate planning, estate administration and estate litigation enquiries. Further, we are able to advise family businesses and set up family meetings to discuss vital business issues.