Matti Lamb & Associates, Author at Matti Lamb & Associates

Beyond the Basic Will: When You Need a More Complex Estate Plan

A Will is one of the most important documents you will ever sign. For many Australians, a simple Will, leaving everything outright to a spouse or dividing it equally among the children does the job adequately. It provides clarity and avoids the uncertainty of dying intestate (without a Will).

However, life is rarely simple. As your family structure, assets, and circumstances become more complex, your basic Will may no longer be sufficient. Relying on a standard document in these situations can create legal and financial challenges down the track, especially for your family.

This article outlines some common scenarios where you might consider looking beyond a basic Will to a more detailed, robust estate plan. The information is general only and does not constitute legal advice. For guidance specific to your personal circumstances, please consult a qualified legal professional.

What a Basic Will Usually Covers (and What It Doesn’t)

A standard or basic Will generally covers:

Executors: Naming the person or people responsible for administering your estate and carrying out your wishes.
Guardians: Naming who will care for any minor children.
Beneficiaries: Stating who receives your assets.

While this may be sufficient for many Australians, a basic Will can sometimes create problems. Complex family structures and evolving financial and other circumstances can mean that a one‑size‑fits‑all approach may not fully support your intentions or protect your beneficiaries.

A Will that does not address potential complications can lead to family disputes, delays in estate administration, and unintended asset distributions.

Key Situations Where a Simple Will May Not Be Enough

1. You Have a Blended Family

Blended families, where one or both partners have children from a previous relationship, can significantly complicate estate planning.

The risk: Leaving everything to your current spouse in the hope they will later “do the right thing” by your children provides no legal protection. Your partner can legally change their own Will after your death and exclude your children entirely.

The solution: A lawyer can integrate strategies such as:

Life interests: Allowing your partner to live in your home or access estate income for life, with assets later passing to your children.
Testamentary trusts: Providing longer-term control, asset protection, and flexibility in distributing inheritances, especially in blended families.

These structures help balance fairness between a surviving partner and children from previous relationships.

2. You Want to Protect Assets from Creditors or Divorce

If you leave assets outright to a beneficiary, the assets become that person’s property. This means their inheritance can be exposed if they face bankruptcy or family law proceedings.

The risk: If your child receives a lump sum inheritance and then faces bankruptcy or a divorce settlement, that money may be included in the assets available to be split with creditors or a former partner.
The solution: A testamentary trust can hold assets on behalf of the beneficiary, helping to protect them from financial risks due to bankruptcy or relationship breakdowns.

3. Your Beneficiaries Have Special Needs or Lack Financial Maturity

An outright gift is not always in the best interests of the recipient.

Risks for minors or young adults: A large inheritance can be quickly depleted without experience or guidance.

Risks for beneficiaries with disabilities: Direct inheritance may affect their eligibility for government benefits.

The solution: Your Will can include a trust to manage funds over time or establish a Special Disability Trust to support a person with a severe disability.

4. You Own a Business or Have Complex Investments

If your assets include a business, partnership interest, or complex investment structure, a basic Will may not provide sufficient direction.

The risk: Without a clear succession plan, transferring the ownership or control of a business interest can cause delays, financial loss, or tax issues.

The solution: Your estate plan should be complemented with a separate business succession plan (potentially incorporating a buy/sell agreement) prepared by your lawyer and accountant. This ensures the smooth ownership transition and protects the business’s value.

The Power of the Testamentary Trust

A testamentary trust is created under your Will and takes effect only after your death. The trust, rather than the individual beneficiary, holds the assets. This structure can offer several benefits:

Asset protection: Trusts can help shield inheritances from financial claims, bankruptcy, and relationship breakdowns.

Tax flexibility: Trusts can allow income to be distributed among beneficiaries in a tax-effective way – these matters should be discussed with your accountant.

Control: Trusts enable you to appoint a trustee to manage funds responsibly and in accordance with your wishes.

Key Takeaways

Drafting a Will is a vital step in protecting your family and assets. However, for many people, a basic Will is just the beginning.

You may need a more detailed estate plan if:

You have children from a previous relationship.
You have minor or vulnerable beneficiaries.
You are concerned about your beneficiaries’ financial exposure due to divorce or debt.
You own a business or hold complex investments.

If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

The Relevance of a De Facto Relationship in Australia

Australian society has long recognised the existence of non-traditional domestic partnerships. This has been reflected across various laws, with de facto relationships holding significant weight from a legal perspective. This can be a confusing area, especially when it comes to understanding what a de facto relationship actually is and why it matters from a legal stance.

So, why is this important, and what does it mean for you?

This article breaks down what constitutes a de facto relationship in Australia, how the law determines if one exists, and why this status is so relevant, particularly in areas like family law and financial matters. The information is general only and is not intended to be legal advice. If you need guidance, we recommend consulting an experienced lawyer.

What is a De Facto Relationship?

The Latin term “de facto” simply means “in fact” or “in reality”. In a legal sense, it means a couple is living together on a genuine domestic basis, even though they aren’t married.

The definition of a de facto relationship is found in section 4AA of the Family Law Act 1975 (Cth). The Act is a federal law, and its principles are applied across Australia, although some states have their own specific laws that also deal with de facto relationships, particularly in areas outside of family law.

According to the Family Law Act, a person is in a de facto relationship with another person if:

They are not legally married to each other.
They are not related by family.
They live together on a genuine domestic basis.

The third point is the one that often requires the most thought, and the law looks beyond simply sharing a house. To determine if a genuine domestic basis exists, a court will consider various factors. No single factor is more important than another, and a court will look at all of them to get a complete picture of the relationship.

These factors include:

The duration of the relationship: How long have you been together? Generally, a de facto relationship needs to have lasted for at least two years. However, this is not a strict rule, and there are exceptions.

The nature and extent of your common residence: Do you live together? Do you have shared responsibilities for the home?

Whether a sexual relationship exists: This is one of the factors, but it is not a defining one. A couple can be in a de facto relationship even if they no longer have a sexual relationship.

The degree of financial dependence or interdependence, and any arrangements for financial support: Do you share bank accounts, split bills?

The ownership, use, and acquisition of property: Do you own assets together, like a car or a house?

The degree of mutual commitment to a shared life: Do you consider yourselves a couple and present as such to the world?

Whether the relationship is registered under a prescribed law of a state or territory: In some states, you can register a relationship, which provides formal legal recognition.

The care and support of children: Do you have children together, or do you care for each other’s children?

The reputation and public aspects of the relationship: Do friends, family, and the community see you as a couple?

The law looks at the combination of these factors to decide whether a de facto relationship exists.

Why a De Facto Relationship is Relevant in Australia

The legal recognition of de facto relationships is a big deal because it grants de facto couples many of the same rights and responsibilities as married couples. This is most obvious in two key areas: family law and financial matters.

Family Law

For many years, couples who were not married had limited legal recourse if their relationship ended. That changed with reforms to the Family Law Act that came into effect in 2009. These changes gave de facto couples the right to ask a court to make orders about property settlement and spousal maintenance after a relationship breakdown, just like a married couple.

The principles for dividing assets in a de facto relationship are largely the same as for a married couple. A court will consider:

The assets and debts of the relationship.

The financial contributions each person made, such as income, savings, and assets brought into the relationship.

The non-financial contributions. These can include caring for children, looking after the home, or supporting the other person’s career.

The future needs of each person, such as their age, health, income, and who has care of the children.
The effect of any family violence to which one party of the relationship has subjected or exposed the other, on the ability of a party to make financial and non-financial contributions; and the economic effect of family violence on a party’s current and future circumstances.

This legal recognition means that if you are in a de facto relationship and it ends, you are protected by the same legal framework as a married couple when it comes to property division.

Financial Matters

Beyond family law, being in a de facto relationship can impact a range of other financial and legal areas:

Superannuation: Many superannuation funds recognise de facto partners as beneficiaries for death benefits.

Wills and inheritance: In some cases, a de facto partner can make a claim on a deceased partner’s estate, even if they were not included in the will. The law in each state and territory varies on this point.

Social security and government benefits: Your de facto status can affect your eligibility for benefits from Centrelink, as they assess your combined income and assets.

Key Takeaways

The concept of a de facto relationship acknowledges that many people choose not to marry but still want the same legal protections and recognition as married couples.

If you are in a relationship that you think might be a de facto relationship, it is important to understand your rights and obligations, especially if you are considering buying property together or if the relationship ends. The law’s purpose is to ensure that both partners are treated fairly and that any children of the relationship are properly cared for.

The detailed and comprehensive definition of de facto in the Family Law Act ensures that the unique circumstances of each couple are taken into account, providing a flexible framework for addressing a wide range of situations.

If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

Due Diligence when Buying an Existing Business

If you are thinking about a new venture, expanding an existing business or entering a new market, one option you might consider is to buy an established business. There are advantages and disadvantages when buying an existing business compared with starting your own. Considering the pros and cons of each, and carrying out any due diligence beforehand to assess the value, risks, and potential of a target business will help you make an informed decision. An experienced lawyer can help you navigate the legal complexities.

Advantages and Disadvantages

Buying an established small business offers several advantages. First and foremost, you will usually inherit an existing customer base, which can provide immediate cash flow and revenue. This can save you the time and effort required to build a customer base from scratch. Additionally, an established business often has existing relationships with suppliers, distributors, and other stakeholders, providing you with a head start in identifying key resources and entering the market. Brand recognition and goodwill associated with an existing business can also help you establish credibility in the industry.

On the other hand, starting your own business allows for greater control and customisation. You can shape the business according to your vision and preferences without inheriting any existing issues or limitations. Starting from scratch also enables you to choose the location, design the infrastructure, and hire the team that aligns with your strategic objectives. However, building a new business requires substantial time and resources, and success is not guaranteed in the early stages.

Due Diligence when Buying a Small Business

For an existing business, due diligence typically refers to the comprehensive investigation and analysis of the target business to assess its value, risks, and potential for growth. It encompasses investigating the financial, legal, operational, and human resources of the proposed business.

Financial and Legal Due Diligence

Financial due diligence involves scrutinising the proposed business’s financial statements, tax records, cash flow, and debt obligations. This helps you evaluate the accuracy and reliability of the financial information provided by the seller, assess the business’s profitability and financial health, and identify any potential financial risks or liabilities.

Legal due diligence focuses on examining the legal documents, contracts, licences, permits, and regulatory compliance. It ensures that the business has clear title to its assets, that there are no legal disputes or pending litigation that may affect its operations, and that it complies with applicable laws and regulations.

Taking over existing agreements forms another aspect of the due diligence process. You will need to review contracts with customers, suppliers, landlords, and other key stakeholders to assess their terms, obligations, and potential risks or liabilities. This ensures that you are fully aware of the existing contractual relationships and can effectively manage them after the acquisition.

A lawyer can assist with various legal aspects of due diligence, for example, assessing the business’s intellectual property rights, reviewing contract terms and conditions, and investigating obligations under existing agreements that will be assigned to the new owner. Accountants can help with financial due diligence by analysing and assessing the accuracy of financial information and identifying potential financial risks or liabilities.

Operational Due Diligence

Operational due diligence involves assessing the business’s operational processes, systems, and infrastructure. You may need to evaluate its supply chain, production capabilities, technology, and any intellectual property rights. This helps you understand the efficiency and effectiveness of operations and identify any operational risks or inefficiencies.

Operational due diligence may also involve an evaluation of the business’s human resources. This might encompass reviewing employment contracts, assessing employee benefits and compensation packages, and understanding any potential labour issues or legal obligations. This helps assess the quality and suitability of the existing workforce and plan for any necessary changes or restructuring. A lawyer can provide guidance on employment matters, ensuring compliance with employment laws, and assist with the transfer of employees or restructuring, if necessary.

Conclusion

Regardless of whether you choose to buy an established business or start your own, due diligence is a crucial step in the process. Obtaining competent legal and financial advice can help entrepreneurs minimise risk and enable them to make informed decisions about their proposed venture.

This is general information only and you should obtain professional advice relevant to your circumstances. If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

Penalty Clauses in Contracts – Are They Enforceable?

A penalty clause is a term in a contract that imposes a penalty on a party that breaches a contractual obligation. It is important to know that penalty clauses are generally unenforceable under Australian law. However, it can sometimes be difficult to distinguish penalty clauses from other similar clauses that are enforceable.

What is a Penalty Clause?

A contract term that states that one party has to pay an amount upon a breach of contract may be a penalty clause. Penalty clauses are designed to deter breaches of contract, regardless of the actual harm suffered by the non-breaching party. As such, penalty clauses are unenforceable because they are considered to be a form of punishment that imposes disproportionately high financial penalty on the breaching party. However, there are very similar clauses used in contracts, called “liquidated damages” clauses, which are enforceable.

A liquidated damages clause is an agreement that a party in breach will pay the other party an amount which is a reasonable estimate of what the breach will cost the non-breaching party. For a liquidated damages clause to be enforceable, it must be a “genuine pre-estimate”. This means that the amount cannot be random, even if it is agreed between the parties. There must be a genuine effort applied to calculating how much a certain breach would cost the non-breaching party.

Identifying Penalty Clauses

Unfortunately, it can be quite difficult to distinguish between a penalty clause and a liquidated damages clause. For instance, if a contract imposes a fee for late payment of an invoice, this clause could be an unenforceable penalty clause or, it could also reflect a genuine pre-estimate of damages. It is reasonable for a late fee to be set at the cost incurred to re-issue the invoice, as it is not intended to be a penalty.

Termination fees are another example worth considering. If a termination fee is set at an unreasonably high amount, then it is not a genuine pre-estimate of the non-breaching party’s actual losses resulting from the early termination. In that case it will be considered a penalty clause and will be unenforceable. On the other hand, if the termination fee represents a reasonable estimate of the non-breaching party’s actual losses (such as the costs of finding a replacement for the terminated contract), then it may be enforceable as a valid liquidated damages provision.

To determine whether a particular term is a penalty clause, the court will consider the nature of the breach, the amount of the penalty, and the relationship between the parties. It is important to note that whether a particular contractual provision is a penalty clause or not will depend on the specific circumstances of the case. As such, parties should carefully consider the potential risks and consequences of including such provisions in their contracts.

Considerations when Drafting Contracts

When drafting a contract in Australia, it is important to ensure that the purpose of a clause is not to punish or to deter a breach by imposing an artificially high fee. In addition, consideration should be given to whether it is necessary to impose a fee for a breach, when other alternatives (such as negotiation) might achieve the desired outcome. However, these concerns should not prevent a drafter from including proportionate and necessary liquidated damages clauses in a contract, as these clauses can be vital to protect businesses against genuine losses.

When drafting a liquidated damages clause, it is wise to document the consideration that was given to calculating the amount of damages that would flow from different types of breaches. Including this documentation in the contract (or associated documentation) means that the contracting parties have all had an opportunity to consider whether the amounts imposed would constitute a reasonable pre-estimate. This will make it more likely that the clause will be enforceable.

Conclusion

Penalty clauses are generally unenforceable as they are considered to be a form of penalty on the breaching party rather than a genuine pre-estimate of loss suffered by the non-breaching party. This, however, should not prevent the inclusion of proportionate liquidated damages clauses in contracts. In such cases, it is important that the clause seeking liquidated damages to deter a breach should not impose an artificially high fee or penalty.

The information in this article is general in nature and does not constitute professional advice. If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

Making a Will if capacity is in question

It is well known that a Will is a legal document which sets out how a person wants their assets to be distributed once they die.

If you are over the age of 18 you can make a Will – provided you have capacity.

In general terms, a person making a Will (a testator) has the necessary capacity if they:

know what a Will is;
know of the amount and type of property they are disposing of;
understand the moral claims to which they should give effect when deciding to whom to leave their property; and
are not delusional or suffering from a mental illness at the time they sign their Will.

Who decides on capacity?

It is not the role of a lawyer to be an expert in assessing the capacity of their client.

However, a lawyer can be involved in carrying out a “legal” assessment of the testator’s capacity.

If there is a question about someone’s mental capacity to make a Will, then an opinion, preferably in writing, should be obtained from that person’s treating doctor. The opinion should state that the person has the required testamentary capacity to make a Will.

When should the Will be signed?

It would be ideal if the doctor could be present when the testator signs the Will, and even better if the doctor is one of the two witnesses to the Will. In all likelihood, this will not usually be possible.

Where there is the likelihood of the Will being challenged on the testator’s death on the basis of a lack of capacity, it is important to obtain contemporaneous medical evidence from the testator’s treating doctor or in some cases a geriatrician confirming the testator has capacity. It is prudent for the doctor to conduct a medical examination to determine this and then provide a written report confirming their opinion.

We feel that the testator should on the same day provide instructions to the lawyer and sign the Will.

Having a medical report stating that, in the doctor’s opinion, the testator had capacity and then on the same day the person provided instructions and signed their Will, places the testator in a strong position so far as capacity is concerned.

Could the Will be challenged?

It is important to address the issue of capacity in some circumstances because a Will can be challenged on the grounds that the testator did not have sufficient capacity when signing the Will. This arises most frequently where the testator is ill, for example, in hospital, on medication or elderly and suffering from dementia.

It is difficult to set aside a Will on grounds that the testator lacked testamentary capacity if the Will is prepared by a competent lawyer who took appropriate instructions from the testator and was satisfied that he or she had the requisite testamentary capacity to make a Will.

How your lawyer can help

If you are worried because you know someone who wants to make a Will and may not have capacity or may be in the early stages of dementia, then it is prudent to encourage them to consult a lawyer who is experienced in preparing Wills, and to do this as soon as possible.

It is also prudent to ensure the lawyer is made aware of this potential difficulty because it may be necessary for the testator to first attend their doctor’s surgery for an appointment with the doctor being able to provide a satisfactory written report so it can be taken to the lawyer’s office ahead of the testator’s appointment but on the same day.

It is then a matter for the lawyer to be in a position to actually prepare the Will on the spot for checking and signing. Then the testator will have a Will that is dated the same day as a medical report saying they had capacity to understand the Will they signed.

As you can see there is a degree of planning that is needed, so speak to your lawyer to ensure that all the plans are worked out first.

If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

What is an ‘Interest’ in Property?

When discussing property law, the concept of an ‘interest’ is significant. An interest in property refers to a legal stake or other right that an individual or entity holds in a particular piece of real estate.

This article explores the definition of property interests, common types, and the profound impact they can have on property owners and prospective buyers. Additionally, we distinguish between legal and equitable interests, shedding light on their distinctive characteristics. The information is general only, and we recommend seeking professional advice relevant to your circumstances.

Definition of an Interest in Property

At its core, an interest in property refers to a legally recognised claim or right associated with a specific piece of real estate. These interests can take various forms, each conferring a set of rights and obligations upon the party holding them. Understanding these nuances is crucial for both property owners and potential purchasers, as they directly influence the utilisation, transfer, and enjoyment of the property.

Common Types of Interests

The most common types of interest in property are freehold, leasehold, easements, covenants, and mortgages.

Freehold Interest

This is the most comprehensive and absolute form of property ownership. A freehold interest grants the holder full ownership rights, allowing them to use, sell, or lease the property without constraints (subject to planning, environmental and other relevant laws). The property can be passed on to heirs, providing perpetual ownership.

Leasehold Interest

In contrast to freehold, a leasehold interest grants the holder the right to use the property for a specified period, in exchange for complying with terms and conditions and payment to the property owner, often through a lease agreement. While those with a leasehold possess certain rights during the lease term, ultimate ownership reverts to the landlord after its expiration.

Easements

Easements confer specific rights to a third party, allowing them access or use of another person’s property or part of it. Common examples include utility easements, granting access for maintenance or installation of utility lines. Easements typically run with the land and can affect the land’s value, use and future development. They should be fully investigated during a property transaction.

Covenants

Property covenants are legally binding restrictions or agreements that dictate how a property may be used. They are often imposed by developers to maintain certain standards within a community and to protect the land’s value.

Mortgages

A mortgage is a financial interest in a property held by a lender until a loan is fully repaid. A mortgage document and/or associated loan agreement will set out the rights of each party to the mortgage. The property serves as collateral for the loan, and failure to repay the loan may result in foreclosure where the property is repossessed and sold to repay the mortgage.

Impact on Property Owners and Prospective Purchasers

Understanding the nature of property interests is paramount for both existing property owners and those contemplating a purchase.

For property owners, recognising existing interests is crucial to avoid disputes and ensure the lawful enjoyment of their property. Leasehold arrangements, easements, or covenants may impact how an owner uses and maintains their property.

Identifying property interests is perhaps more critical for those who are acquiring a property. Before buying a property, it is essential to conduct thorough due diligence to identify existing interests. This involves reviewing title deeds, survey reports, and any pertinent legal documents. Failing to do so may lead to unexpected limitations or disputes after the purchase.

Legal Interests vs. Equitable Interests

A critical distinction in the realm of property interests lies in their classification as either legal or equitable.

Legal interests are formally recognised and enforceable by law. They are typically registered with the relevant government authority, providing a clear and public record of the interest. Examples include freehold ownership and registered mortgages.

Equitable interests, while still legally valid, may not be immediately apparent from public records. These interests arise from agreements, trusts, or other equitable doctrines. An example is a beneficial interest in a property held by someone other than the legal owner.

It is crucial to understand the distinction between legal and equitable interests when assessing the true scope of property rights. While legal interests are readily identifiable through official records, equitable interests may require a more in-depth examination of the property’s history and associated agreements. Unfortunately, a buyer may acquire a property without discovering an equitable interest and may then need to go to court to try and protect their right to the property. However, this risk can be mitigated by engaging proper legal support and performing due diligence prior to a property purchase.

Conclusion

The various types of property interests, ranging from freehold ownership to easements and covenants, each carry distinct implications for the use and enjoyment of a property. Recognising the impact of these interests, conducting thorough due diligence, and distinguishing between legal and equitable interests are essential steps in navigating the complexities of property ownership and transactions. Seeking legal advice is often necessary to confirm property interests at each stage of real estate ownership.

If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

Can I Stop Somebody from Contacting or Seeing my Child?

In the complex landscape of family law, few issues are as emotionally charged as the care of children. It is common for parents to question what they are legally obliged to do and their decision-making rights about their children. For instance, parents often struggle with knowing whether they can stop someone from contacting or seeing their child. Sometimes this is about contact with the other parent, but at other times the contact is with another significant person, such as a grandparent. Unfortunately, in neither case does the law provide clear-cut guidance, although there are principles that can help to determine these issues.

Contact with the Other Parent

In Australia, the law concerning the care of children is generally governed by the Family Law Act 1975 and exercised by the Federal Circuit and Family Court of Australia (or, in Western Australia, the Family Court of Western Australia). Family law prioritises the best interests of the child above all else.

Historically, when the care of a child has become a decision for the Court, it has favoured arrangements that allow for ongoing contact with both parents, even in cases of parental conflict or estrangement. This is not because parents have ‘rights’ regarding their children, but rather because there was a presumption that both parents had ‘equal shared parental responsibilities’ towards their children. Therefore, if both parents have equal decision-making power about their child, it was presumed by the Court that neither parent should prevent contact between the child and the other parent.

However, this presumption was always rebuttable. There were circumstances in which the Court would limit or restrict contact between a parent and their child to ensure the child’s safety and well-being. These circumstances typically involved abuse, neglect, substance abuse, domestic violence, or other factors that posed a risk to the child’s physical or emotional health. Accordingly, outside of the courtroom parents were empowered to limit or restrict contact with the other parent if it endangered their child’s safety or well-being.

If the other parent believed that this power was being used inappropriately or punitively, they could seek legal intervention to establish contact. In such cases, the Court would carefully consider the evidence presented and make a decision based on the best interests of the child.

More recently, the Court is being guided by legislative changes to acknowledge, from the outset, that a child may not benefit from spending significant time with a parent and the presumption of shared parental responsibility has been removed. The Court will now consider an amended set of factors when making decisions about parental contact.

These factors include what arrangements promote the safety of the child and each person who has care of the child, the views expressed by the child, the developmental, psychological, emotional and cultural needs of the child, and the capacity of each parent to meet those needs. In addition, the Court will consider the benefits to the child of having a relationship with their parents and other people who are significant to them and anything else that is relevant to the particular circumstances of the child.

Despite this changed emphasis and provided the best interests of the child are at the forefront, it is likely to remain uncommon for the Court to order that a child has no contact with one of their parents. There is a significant body of research that shows that in most circumstances it is in the best interests of children to have a relationship with both parents. As such, parents outside the courtroom should consider withholding a child’s contact with the other parent to be a course of last resort and only taken when it is necessary in the interests of the child. Parents should also be mindful that withholding a child from contact with another parent without valid justification can have serious consequences. The Court takes a dim view of parents who engage in ‘parental alienation’, which involves manipulating or coercing a child to reject the other parent.

Other Significant People

Ultimately, the goal of Australian family law is to promote the well-being of children. Within this broader mission, the Court not only considers contact between the child and their parents but also contact with other people who are significant to the child. For instance, if a child has developed a relationship with a grandparent, perhaps through regular visits, it may not be in their interests to have this relationship severed. Again, this is not because of any concept of ‘grandparent’s rights’, which is not a recognised legal principle in Australia. Rather, it is because the Court recognises that when someone is important to a child, it can be harmful for them to lose this person and that this should only happen if it is unavoidable. For instance, if a grandparent is abusive or alienating, then it would be reasonable to prevent them from having contact with the child, even if this goes against the child’s expressed wishes. However, it would not be sufficient for a parent to withhold access to their child simply because they wish to do so, or to punish the grandparent, in circumstances where the child has a positive and longstanding relationship with their grandparent.

Conclusion

At all times a parent must consider the best interests of their child when determining who can and cannot have contact with their child. As long as it is the child’s interests that are being prioritised, the parent may decide to prevent contact. If the other person has the necessary standing, they may challenge this decision before the Court, at which time consideration will be given to what is in the overall best interests of the child. This consideration will include the impact on the child if their parent is forced into contact which is not healthy, such as with a parent with whom they have a negative relationship.

This is general information, and you should obtain professional advice relevant to your circumstances. If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

An Overview of Guarantees and Indemnities

It is important that anyone who is asked to provide a guarantee or indemnity understands precisely what their liabilities are under the arrangements.

In this article, we identify the distinguishing features of both guarantees and indemnities and consider the significant differences between the 2 kinds of arrangements.

Features of a guarantee

A guarantee is a contract by which the promisor (called the surety or guarantor) undertakes to be responsible to the promisee (creditor) for a debt default or miscarriage of a third party (debtor).

A guarantee contract includes three parties, namely the –

creditor who is granting the loan;
debtor who is utilising the amount of loan; and
guarantor who is giving the guarantee.

The debtor’s obligation is owed to the creditor under a principal contract. The guarantor or surety is liable to the creditor under a contract of guarantee.

The most common example of a contract of guarantee is where one person (guarantor) undertakes to be responsible to a bank (creditor) for the debts of a friend, relative, business colleague or company (debtor) who is borrowing money from the bank.

The liability of a guarantor is a secondary obligation which is only enforceable (contingent) on the debtor failing to perform the obligations which have been guaranteed. If the primary obligation of the debtor is discharged or becomes void, the guarantee falls away.

Features of an indemnity

An indemnity is a contract by one party to keep the other harmless against loss. Indemnities are also described as an obligation imposed by contract on one person to make good the loss suffered by another.

A contract of indemnity is a primary liability and may arise from an express or implied contract, or in equity.

This means that if you provide an indemnity for the performance of the obligations of someone else you may be called upon to perform those obligations yourself.

There are different types of indemnities which include:

Bare indemnity: “A” indemnifies “B” against a loss or liability incurred in connection with specified circumstances, without setting any specific limitations.
Proportionate indemnity: “A” indemnifies “B” against losses except those incurred as a result of any act or omission of “B”.
Third party indemnity: “A” indemnifies “B” against liabilities to or claims of “C”.
Party/Party indemnity: each party to a contract indemnifies the other for loss occasioned as a result of the indemnifier’s breach of contract.
Reverse/reflexive indemnity: “A” indemnifies “B” against loss or liability incurred as a result of party “B”’s own acts or omissions.
Compensatory and “prevent loss” indemnities: A compensatory indemnity is expressed as an obligation to pay or compensate for loss suffered. A prevent loss indemnity is a “hold harmless” indemnity.

Differences between guarantees and indemnities

The key differences between guarantees and indemnities include:

a guarantee imposes a secondary liability, which means that there will be another person who is primarily liable for the same obligation, whereas an indemnity imposes a primary liability.
in most States, guarantees must be in writing or evidenced in writing, whereas indemnities do not have to be in writing and may be implied by the Courts.
a guarantor’s liability is limited by the extent of the debtor’s liability. In contrast, an indemnifier’s liability is determined by the terms of the indemnity.
a guarantor is discharged from liability if the principal contract is void or unenforceable, whereas an indemnifier generally remains liable if another associated transaction is unenforceable or void.

Function of guarantees and indemnities

A guarantee contract is usually used to provide protection to a person, typically a bank or finance company, against loss suffered through entering into a transaction if the obligations of the other party to that transaction are not performed. It reduces the credit risk faced by a bank by giving the bank an entitlement to demand payment from the guarantor in the event of the debtor’s default.

In contrast, indemnities are designed to allocate risk between various parties to a contract, to eliminate the need to show causation as an element of a claim and to avoid the need to mitigate loss.

Indemnity clauses can be found in many different types of commercial contracts, for example, leases, sale of goods, construction contracts, manufacturing contracts and service agreements.

Conclusion

Both guarantees and indemnities can impose complex obligations. As such, they should not be agreed to lightly and should only be considered upon legal advice as to the effect of the specific terms created by the arrangements.

If you know someone who may need assistance or advice on how to proceed please contact us on (08) 8155 5322 or email [email protected].

First steps after separation – some practical considerations

The breakdown of a relationship, whether by choice or circumstance, can be complex and challenging. In Australia, the Family Law Act 1975 sets out the legal framework for divorce, the division of property and parenting arrangements after a relationship breaks down. An experienced family lawyer can provide valuable legal advice and guidance when it comes to navigating these laws.

Family law matters are not just legal problems, in addition to navigating the law and the emotional aftermath, addressing the practical side of separation can be equally important to transition into your new phase of life. There are a host of considerations, many of which will need immediate attention. Following are some typical practical matters that may need to be dealt with.

Living Arrangements

Accommodation and housing will naturally be a concern. You’ll need to decide who stays and who leaves the family home which might be influenced by employment needs, children’s schooling, and nearby family support.

If you are renting, decide who will stay in the current home, notify your landlord and have the rental agreement updated. If you have a mortgage, inform your bank of your separation and any decisions made regarding mortgage responsibilities.

If you are moving out, you will need to explore housing options that fit your budget and lifestyle, which can be particularly difficult in the current market. Ask friends and family for referrals and support.

If you are relocating, make sure you change your address with various organisations, and for added security, you may want to consider renting a post office box.

Children and Schooling

For families with children, their well-being and continuity in learning and development are paramount. Keep your children’s best interests in mind – try to put differences aside to work out arrangements that will cause them the least disruption and, where possible, foster a meaningful relationship with both parents.

If you can, establish a temporary agreement as a starting point, which can lead to a more formal arrangement later. Maintaining consistency is likely desirable in most cases. If possible, stick to your children’s current schooling and childcare arrangements to maintain stability in their lives.

Meet with school and childcare administrators to inform them about the separation and keep them notified of any changes so they are aware of the situation and can help. Schools often offer support and resources to help children cope with the change.

Coordinate with your ex-partner to work out a plan for childcare/school pickups, extracurricular activities, and parent-teacher meetings. Consistency and cooperation in these areas can significantly reduce stress for children.

Banking and Accounts

Contact your bank to discuss your mortgage, joint loans, savings accounts, credit cards, and every other aspect of your banking. You will likely want to open a separate savings account and close or put a hold on credit card facilities, lines of credit, etc. Major banks generally have online resources and checklists to help those who have separated to work through their banking needs.

Protect and help safeguard your privacy by updating passwords and login details for online banking accounts, email, social media platforms, etc.

Property and Record Keeping

Secure your personal documents and items. Ensure you have all necessary identification, financial records, and personal valuables in a safe place. Obtain originals or copies of important documents like passports, marriage certificates, birth certificates and insurance policies.

Ensure that your property (your home, other real estate, motor vehicles, boats, etc.) remains insured. Failing to retain insurance, should the unforeseen happen, can have devastating financial effects. Work out with your ex-partner who is paying for what and keep accurate records.

Prepare a list of assets and liabilities (and account balances as of the date of separation). Property, shares, investments, bank accounts, superannuation, mortgages, loans, and credit card accounts will all be relevant when it comes to finalising your property.

Document your agreed date of separation and keep a journal to record other significant events and timelines. This is important information when it comes to applying for a divorce and determining deadlines for filing court proceedings, if this becomes necessary later.

Support and Assistance

Contact the Department of Human Services to learn about child support and whether you are entitled to financial assistance.
Create a trusted support network and enlist help from friends and family as well as professional counselling or therapy, if needed. Family Relationships online – https://www.familyrelationships.gov.au/ provides various resources and information to help families and relationships.

Lean on your support network. Friends, family, support groups, and professional counselling can provide the emotional support needed during this challenging time. Remember, it’s okay to ask for help, and reaching out for professional guidance is a prudent way to navigate the complexities of separation.

Moving Forward

Don’t put off getting quality legal and financial advice from qualified professionals.

Consider making or updating your Will and other documents such as a power of attorney. You should also review your superannuation and life insurance policy, as relevant, as you may wish to make changes to the beneficiaries. Your lawyer can provide guidance and advice in these important estate planning areas.

Separation demands both emotional and practical resilience and working out some of the preliminary steps to take after a relationship breaks down can be difficult when you are emotionally charged. Fortunately, there are resources available to help you navigate these difficult times. We understand the sensitivity and intricacies inherent in family law matters – the legal and the practical issues – and our goal is to provide comprehensive support and guidance to all our clients.

This is general information only and you should obtain professional advice relevant to your circumstances. If you know someone who may need assistance or advice on how to proceed please contact us on (08) 8155 5322 or email [email protected].

Making a total and permanent disability claim – understanding the process

Facing a total and permanent disability is life-altering, bringing about significant physical, emotional, and financial challenges. In such trying times, having total and permanent disability insurance and understanding your rights and entitlement to claim benefits can provide much-needed financial security for you and your family.

This article provides general information only and you should obtain professional advice relevant to your circumstances. If you are considering making a total and permanent disability claim, we recommend seeking legal advice. A lawyer can help assess your eligibility, assist in gathering the necessary evidence, correctly file your claim, and negotiate with the insurer on your behalf.

What is Total & Permanent Disability?

Total and permanent disability (TPD) generally refers to a condition that prevents someone from returning to work or engaging in any gainful employment for which they are reasonably qualified by education, training, or experience. A TPD can arise from various illnesses and injuries, for example, serious medical conditions such as cancer, heart disease, or mental health disorders; and severe accidents resulting in permanent impairment, such as spinal cord injuries or traumatic brain injuries.

In Australia, TPD insurance is generally obtained through:

Superannuation: many superannuation funds include a TPD insurance component as part of their default cover.
Private insurance: individuals can purchase standalone TPD insurance policies from private insurers.

TPD insurance provides a lump sum payment if you can no longer work in your usual occupation or other type of employment, based on your qualifications, experience, and training. It is important to carefully review the policy documents to understand the specific eligibility requirements and any exclusions that may apply. Note also, that TPD cover through your superannuation fund can potentially end if you change funds, stop making contributions to your superannuation, or reach a certain age.

Eligibility for TPD Benefits

The eligibility criteria for TPD benefits can vary depending on the specific insurance policy or superannuation fund. However, some general requirements typically apply:

Definition of TPD: the policy document will define what constitutes TPD, often including conditions like being unable to work in your occupation or any occupation for which you are reasonably suited.
Waiting period: most policies have a waiting period (for example, six months) during which you must be continuously disabled before you can make a claim.
Medical evidence: you will need to provide comprehensive medical evidence from your treating doctors to support your claim.

The TPD Claim Process

Navigating a TPD claim can be complex and time-consuming. The general process is as follows:

Notify your insurer or superannuation fund: inform them of your intention to make a TPD claim as soon as possible.
Gather supporting documentation: this includes medical reports, employment history, and any other relevant evidence.
Complete the claim form: fill out the claim form accurately and comprehensively, providing all the requested information.
Assessment of your claim: the insurer or superannuation fund will assess your claim, which may result in requests for further medical examinations or interviews.
Decision: you will receive a decision on your claim, which can either be approved, denied, or require further information.

Tips for a Successful TPD Claim

While the TPD claim process can be daunting, following these tips can increase your chances of a successful outcome:

Seek professional advice: a compensation lawyer specialising in TPD claims can help guide you through the process, ensure you meet the procedural requirements, and advocate on your behalf.
Be organised: keep all your documents and correspondence related to your claim in one place for easy access – you might consider asking a trusted family member or friend to assist with this.
Be thorough: provide as much detail and evidence as possible to support your claim.
Be patient: the assessment process can take time, so be patient and persistent.
Don’t give up: if your claim is denied, you may have the right to appeal the decision. If you haven’t already, seek professional advice to explore your options.

How a Compensation Lawyer Can Help

A compensation lawyer with expertise in TPD claims can be invaluable throughout the process of making your TPD claim. Your lawyer can:

Assess eligibility: review your policy and medical evidence to determine your eligibility for TPD benefits.

Gather evidence: assist in collecting and organising all necessary documentation to support your claim. Lawyers generally have a network of medical and other professionals who can be retained to assist with preparing evidence.
Liaise with the insurer: this can be particularly helpful given the insured person will often be facing a traumatic and difficult period. Your lawyer can communicate with the insurer or superannuation fund on your behalf, ensuring your rights are protected and that the correct documents are lodged within any specific timeframes.
Negotiate a fair settlement: if your claim is approved, your lawyer can assess it to ensure it reflects the full extent of your disability and its impact on your future earning capacity.
Represent you at the Australian Financial Complaints Authority (AFCA): The AFCA helps resolve disputes between consumers, insurers and superannuation funds about products such as TPD insurance. Your lawyer can help lodge complaints about delays in processing claims, the calculation of entitlements under a policy, and an insurer’s denial to pay a claim.
Represent you in court, if necessary.

Conclusion

Claiming total and permanent disability benefits can be a complex and emotionally challenging process. Understanding your rights, eligibility criteria, and the steps involved is crucial to securing your financial future. Seeking professional advice from a personal injury lawyer can strengthen your chances of a successful claim.

You don’t have to navigate this journey alone – support and guidance are available to help you through this difficult time. If you know someone who may need assistance or advice on how to proceed please contact us on (08) 8155 5322 or email [email protected].