Wills & Estates

Including Cryptocurrency in Your Will or Estate Plan

Cryptocurrency has emerged as a disruptive force in the financial world, offering a new frontier for investment and wealth accumulation. As both businesses and private interests increasingly diversify their portfolios with digital assets, it becomes crucial to consider the incorporation of cryptocurrency into estate planning. This article explores the complexities and considerations surrounding this innovative asset class, addressing what cryptocurrency is, the challenges in estate planning, storage and accessibility, as well as tax implications.

What is Cryptocurrency?

Cryptocurrency is a digital (or virtual) form of currency. It relies on cryptographic techniques to secure transactions and control the creation of new units. The most well-known cryptocurrency is Bitcoin, but there are thousands of other digital currencies with distinct features and purposes.

Unlike traditional currencies issued by governments and central banks, cryptocurrencies are decentralised, operating on blockchain technology. This means that no single entity, like a central bank, controls the currency, making it both a revolutionary investment opportunity and a unique challenge for estate planning.

Cryptocurrency – Challenges in Estate Planning

While once a novelty, in recent years it has become more common for deceased estates to include some form of cryptocurrency. Despite this increasing popularity, incorporating this asset class into an estate plan still requires careful consideration and proactive measures due to the number of inherent challenges.

Managing a deceased estate that includes cryptocurrency is more complex than administering an estate with only traditional assets. One of the challenges is that it is more difficult to prove ownership of cryptocurrency than it is traditional asset classes such as cash, shares, and real estate. In fact, identifying the existence and ownership of a cryptocurrency asset is often the greatest challenge for executors of estates involving cryptocurrency.

To help address this challenge, owners of cryptocurrency need to maintain detailed records of their holdings, wallet addresses, and private keys. Of course, this must be done in such a way that the information is kept secure during a person’s lifetime but can be easily accessed after their death. Ideally, legal documentation, such as a will or trust, should explicitly describe the nature of all cryptocurrency holdings to ensure that these invisible assets are not overlooked during the management of the deceased estate.

As part of your estate planning, you should also explain any process you have put in place for backup and recovery of cryptocurrency accounts. If something happens to you, your executor should be able to retrieve the assets without obstacle.

To help reduce complexity, your estate plan can also include information about how valuation of the cryptocurrency asset will be carried out to ensure equitable distribution among beneficiaries.

Cryptocurrency Storage

Estate planning with cryptocurrency necessitates the establishment of secure storage solutions and clear instructions for executors. Many cryptocurrency investors use offline hardware wallets to store their assets securely. If you choose this approach, you should ensure that your executor knows the location of your hardware wallet, its PIN, and recovery seed.

Other investors prefer offline paper wallets for added security – old school paper based records containing details of cryptocurrency storage and transactions. If that is your preference, you should instruct your executor on how to access and use these paper wallets.

For online wallets or exchange accounts, your estate documents should include clear guidance on how to access these assets, including login credentials, two-factor authentication details, and any other necessary information.

Tax Implications

Cryptocurrency’s tax implications are complex and can significantly impact your estate plan. Given the evolving nature of cryptocurrency regulations, we recommend consulting with tax experts and legal professionals who specialise in cryptocurrency to ensure compliance with tax laws.

Broadly speaking, in Australia cryptocurrency transactions are subject to capital gains tax, and beneficiaries who inherit cryptocurrency may incur tax liabilities when they eventually dispose of the assets. To help minimise these liabilities, adequate guidance on tax planning should be sought as part of the estate planning process.

Conclusion

If you own cryptocurrency, it is important to think about how to incorporate this asset into your estate planning. Cryptocurrency’s decentralised nature and its potential for growth make it a valuable asset class, but it also introduces unique challenges in estate planning.

To address these challenges effectively, it is imperative to educate your chosen executor on cryptocurrency, establish secure storage and accessibility procedures, and understand the tax implications associated with digital assets. Seeking guidance from experts in the field, including financial advisors, cryptocurrency tax specialists, and legal professionals, is key to creating a robust estate plan that accommodates this revolutionary asset class.

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].

How to Locate an Original Will

Losing a loved one is often an emotionally overwhelming experience, and amidst the grief, managing legal matters can add another layer of complexity. Yet it most often falls to those closest to the deceased to manage the administrative burden created by death. A crucial document in such circumstances is the Last Will and Testament of the deceased. A Will outlines the deceased person’s wishes regarding the distribution of their assets but may also express their intentions in relation to the care of children and pets, and other critical instructions. Unfortunately, the location of this critical document is often not obvious, and locating the Will is frequently a considerable source of frustration for those administering the estate.

What Makes a Will Valid?

The formal requirements for a Will to be considered valid in Australia usually include it being in writing, signed by the testator (the person making the Will), and witnessed by at least two competent witnesses who also sign the document. Each state and territory in Australia sets out the legal requirements for a formal Will in that jurisdiction.

When a document intended as a Will does not satisfy these requirements, it is known as an “Informal Will”. For example, if a Will has not been properly signed or witnessed, it will fail to meet the requirement of a Will as set out in the legislation, even if it is correct in every other aspect. In some circumstances, an Informal Will may be admitted to probate by the Supreme Court even if it does not meet the strict legal requirements.

How Do You Locate a Will?

The initial step to locating a Will is to start by searching the deceased’s home for a physical copy of the Will. You should look in secure places like safes and filing cabinets, or other places where the deceased tended to keep important papers. For instance, the Will might be held in safe custody with a bank or a storage facility. You can reach out to these institutions to inquire if the deceased had a safe deposit box or storage unit.

You can also contact the deceased’s lawyer who may have drafted the Will. Lawyers often retain the original of the Will for safekeeping, or they might have information about the location of the original document. You can also check with the relevant state or territory’s Supreme Court registry. They maintain records of Wills that have been registered, although it is important to know that most people do not register their Will.

Finally, you can conduct a Probate Search at the relevant Supreme Court to discover any lodged or granted probate of the deceased’s Will, which may help if another family member or friend already located the Will and began the administration of the deceased’s estate.

Legal Assistance

When a Will cannot be located using these initial strategies, you may need to seek guidance from a qualified legal professional or lawyer experienced in estate planning and probate matters. They can offer tailored advice, clarify legal obligations, and assist in addressing any concerns regarding administering the estate without a valid, original Will. Ultimately, proper documentation and legal guidance can significantly contribute to honouring the deceased’s wishes and minimising potential conflicts during the probate proceedings.

Do You Need the Original Document?

When a Will is made in Australia, especially when it is drafted by a lawyer, it is often copied. In such cases, the testator will usually take a copy for their records and the original is stored in a safe location. Understandably, it is often this copy that is found by the deceased’s family, but it is the original that is considered the primary document. This original document holds significant legal weight and is typically required for the probate process to validate its authenticity.

However, circumstances might arise where the original Will cannot be located after a person’s passing. In such cases, there are procedures in place that may accept a copy of the Will under specific conditions. These conditions often involve proving the authenticity of the copy through various means, such as presenting witness statements, providing evidence that the original was not destroyed with the intent to revoke it, or demonstrating that the copy reflects the true intentions of the deceased.

While a copy of the Will might be accepted under certain circumstances, it can complicate the probate process and potentially lead to delays or disputes among beneficiaries or interested parties. Therefore, it is strongly advisable to keep original Wills in a safe and easily accessible location, such as with a trusted legal advisor, the executor, or in a secure place like a safety deposit box.

Conclusion

The process of locating an original Will can demand patience, diligence, and often legal assistance. Understanding the avenues available and systematically exploring each option increases the likelihood of finding the document. While it may seem daunting, the efforts put into locating the original Will are invaluable in honouring the wishes of the departed and navigating the legalities of estate distribution.

This information is general 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].

Saving your rights to see your grandchildren

If you are a grandparent facing the challenging circumstances of a break-up in your family group, you may be worried about your right to continue seeing much-loved grandchildren. Unfortunately, after separation or family conflict, some grandparents may only see their grandchildren at crowded school events or from the sideline at sporting occasions, if at all. Fortunately, in Australia, grandparents may approach a court for orders that they are allowed to spend time with their grandchildren or to express concerns about their grandchildren’s welfare.

What rights exist for grandparents and are they automatic?

While grandparents do not have automatic rights to see their grandchildren, they do have legal options available. The Family Law Act allows a grandparent (or other person concerned for the child’s care, welfare, or development) to apply for a parenting order. When determining children’s matters in Australia, the child’s best interests will always be the paramount consideration. In determining what orders to make, the court will consider:

• the arrangements necessary to promote the safety of the child and all individuals responsible for the child’s care
• any views expressed by the child
• the child’s needs, encompassing developmental, psychological, emotional, and cultural aspects
• the capacity of each person with parental responsibility, whether current or proposed, to meet the child’s developmental, psychological, emotional, and cultural needs
• the benefits to the child in having a meaningful relationship with their parents, and people significant to the child
• any other factors that the court deems relevant to the specific circumstances of the child

The courts have previously emphasised the importance of children having contact with as much of their wider family as possible and of growing up feeling part of an extended and supportive family group. In addition to parents and guardians, others with a close ongoing relationship who are significant to the child, such as grandparents, and can show they are involved in the children’s welfare can also apply for parenting orders.

Applying for orders

Parents who are separating often make plans for the future care of their children informally and will agree on where their children will live. Some may draw up a written parenting plan setting out their arrangements for caring for the children. If you are concerned about your future contact with your grandchildren, you can ask to be included in such plans. The parents can make these plans formal by registering them with the courts in consent orders. Orders made about children are called parenting orders and each person affected by the parenting orders must follow them.

If you cannot agree with separating parents about your future contact with your grandchildren, you can apply to the court for orders yourself. The court will decide what caring arrangements are in the best interests of the child and may make orders for a child to live, spend time, and communicate with a grandparent.

In most cases, the law requires that families first attend family dispute resolution or mediation before going to court. An independent person trained in helping families discuss their differences will try to help everyone come to an agreement. You will need a certificate from an accredited dispute resolution practitioner to show you’ve attempted mediation before you can take court action.

If mediation fails, you should obtain legal advice before going to court. You need to find out how strong your case is, what forms and documents you will need to lodge with the court to support your case (these are called affidavits), what orders you should ask for, which court to start your case in, and the costs of taking legal action. Even if you decide to represent yourself in court, it is recommended to get legal advice about how to prepare your case. You must remember that the child’s best interests are always the priority. You will also need to consider the practicalities of being able to implement any arrangements you wish to make.

Grandparents can sometimes get involved and can apply to the Children’s Court to have the children placed in their care. You can apply to court for your grandchildren to live or spend time with you whether their parents are together or separated. You will not need a certificate of dispute resolution if there is a fear of violence or if the matter is urgent, or a party cannot take part in mediation because of a disability.

In cases where there is strong parental opposition to court orders sought by grandparents, a court-appointed family consultant may be required to prepare a family report for submission to the court, to assist the court in deciding whether to grant a parenting order for the grandparent.

Conclusion

Family law and children’s matters are complex and challenging. When a partnership breaks down between parents, there is often a significant and heart-felt impact on all family members, including grandparents who have until the separation, played an important role in the lives of their grandchildren.

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].

How do I Protect my Estate from a Family Provision Claim?

Estate disputes are surprisingly common in Australia. Laws across different jurisdictions allow eligible individuals to challenge a deceased’s Will if they believe they have not been adequately provided for. In such cases, a successful claim might result in the terms of your Will being adjusted in favour of the claimant. However, there are steps you can take to help protect your estate from a family provision claim so that your final wishes are respected.

What is a Family Provision Claim and Who Can Make One?

A family provision claim (or testator’s family maintenance claim) is a legal application made by an eligible person seeking a share, or larger share, of a deceased person’s estate. Essentially, the claimant argues that the deceased failed to make adequate provision in the Will for their proper maintenance and support.

The eligibility criteria to make a family provision claim varies across Australia, so it is important to consider the legislation relevant to your jurisdiction. Generally, those eligible to make a claim are close family members such as a spouse, de facto partner and biological or adopted children. Other individuals such as stepchildren, former spouses, and certain family members who were financially dependent on the deceased (in specified circumstances), may also be eligible to claim in some jurisdictions.

Reasons Estate Disputes Arise

To minimise potential claims against your estate, it is helpful to consider why some disputes arise in the first place.

Family dynamics play out in different ways, particularly when a loved one dies, and the emotional burden of the loss can complicate already difficult relationships. Conflict between family members, especially in blended families or when there is an estranged relationship, can lead to challenges and disputes over the deceased’s intentions.

Family provision claims can arise when individuals believe that the distribution of assets is fundamentally unfair. For example, a child may have provided significant care during a parent’s final years while other siblings conducted their lives with little interruption. The ‘carer’ may have incurred personal and financial expenses or missed opportunities due to these commitments, and the Will may not take account of this.

Some Wills are out of date and do not reflect changes in the deceased’s circumstances, such as marriage, divorce, or new family members. This can create confusion and disputes regarding the deceased’s wishes. Similarly, vague or ambiguous terms in a Will can cause disagreement or uncertainty among beneficiaries.

Steps to Help Minimise Family Provision Claims

Prepare an Effective Will

Possibly the most important safeguard against a family provision claim is to prepare an effective Will. A Will that clearly outlines your intentions for the distribution of your assets leaves little room for misinterpretation of your testamentary wishes. Your Will should be carefully drafted, taking account of your financial and personal circumstances, family dynamics and any potential sources of conflict.

Consider Potential Claimants

While you are technically free to distribute your assets as you wish, it is wise to acknowledge the potential claims of eligible individuals. Providing some level of provision, even if it is less than they might expect, could demonstrate that you considered their needs and could potentially deter them from making a claim.

Review your Will Regularly

As your life circumstances change, it is important to review and update your Will to reflect this. When you experience significant life events such as marriage, divorce, the birth of a child, or the acquisition of substantial assets, it is a good time to review your Will.

Check your Superannuation

Benefits held in your superannuation fund generally do not form part of your estate for distribution under your Will. Rather, the trustee of your super fund decides how to direct the funds, unless you have a current binding death benefit nomination in place. You should regularly check your superannuation details to ensure you have nominated your desired beneficiaries and completed a binding death benefit nomination. Getting financial advice on the tax implications for your proposed beneficiaries is also a good idea.

Check Property Ownership

How co-owners hold their respective interests in property is an important consideration in asset protection and estate planning. Holding property as joint tenants means the interests are held as a whole and cannot be separately apportioned. Joint tenancy is subject to the rules of survivorship, meaning that if a co-owner dies, the surviving co-owner/s is automatically entitled to the deceased’s share in the property. Conversely, property held as tenants in common can specify the individual shares held between each owner which need not be equal. Unlike a joint tenant, a tenant in common may transfer, sell or leave their share in the property to a beneficiary in a Will.

Trusts

A trust is a separate legal structure that holds your assets. There are different types of trusts used to achieve different outcomes and trusts can offer benefits such as preserving/protecting assets, providing for minor children or vulnerable individuals and tax planning. Because of the complicated legal, financial and tax implications of trusts, it is important to seek professional advice when setting one up.

Communicate with your Family

Open and honest communication with your family about your estate plan, where appropriate, can help manage expectations and potentially reduce the likelihood of future disputes. Explaining your decisions and reasoning can help your loved ones understand and accept your wishes.

Conclusion

Failing to address a potential family provision claim can leave your estate vulnerable to costly and time-consuming legal disputes. It may be impossible to guarantee that a family provision claim will not be made against your estate, but there are proactive steps you can take to minimise potential claims. Seeking professional advice tailored to your circumstances can help safeguard your legacy and ensure your final wishes are honoured.

This information is general only and we strongly recommend seeking assistance from a qualified professional when preparing your Will and planning your estate. 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].

Do you need a lawyer to make a Will?

While it is possible to create a Will without a lawyer by using online resources or DIY kits, it is important to consider the potential drawbacks of this approach. A Will is a critical legal document, and errors or omissions can have significant consequences for your loved ones.

Why you need a valid Will

A valid Will ensures your assets are distributed according to your wishes and appoints a trusted executor to manage your affairs when you die. Without a Will, your family may face delays, increased costs, and emotional distress.

With a valid Will your executor can apply for probate (if required) and administer your estate according to the provisions contained in your Will.

Without a valid Will, the distribution of your assets and finalisation of your affairs will likely be delayed. Your family may need to apply to the court for letters of administration and face increased legal and court costs. Your estate will be administered according to a statutory formula which may not take into account your real wishes.

The benefits of using a lawyer to prepare your Will

Family dynamics and personal and financial circumstances are all important considerations when preparing a Will. There is no one-size-fits-all approach, so a generic form or template may not be appropriate for all situations. Before going down the DIY Will path, here’s why seeking legal advice is advisable:

Ensuring your Will is effective and valid

For a Will to be valid, certain legal formalities must be met. If the Will is not correctly signed or witnessed, there is a risk that it may be invalid or contested after you die.

Writing on your Will after it is made, stapling documents to it, or making any changes are all things that can raise issues or invalidate the Will and render it partially or completely ineffective. Lawyers are well aware of this.

A Will that does not effectively deal with all your assets or has ambiguous language can open the doorway to all sorts of uncertainties and disputes.

Certified copies and safe storage

Most lawyers will store your original Will securely, free of charge, and provide certified copies, safeguarding against loss or damage.

Even if you decide to keep your original Will, your lawyer will keep records and copies of the Will which can be useful if you subsequently lose the original or your family cannot find it after you die. In such cases, your family may be able to request the court to look at the copy of the Will and allow the wishes in that Will to stand.

Considering your unique circumstances

Family dynamics and financial situations can evolve so addressing your present and future needs within your family is essential. A lawyer can consider your personal circumstances, family structure and financial position to prepare a Will that effectively sets out your testamentary wishes.

Blended families often have unique estate planning needs. When creating your Will, you may need to consider how you wish to provide for children from previous relationships, and how your current partner may want to provide for their children.

If you have minor children or vulnerable beneficiaries, they might need special consideration. By openly discussing your wishes and objectives with your lawyer, they can help you craft a Will that reflects your intentions and minimises potential conflicts. This includes exploring options like staggered inheritances and testamentary trusts.

Dealing with business interests

Owning a business adds complexity to making a Will and planning your estate. You will need to ensure that your business interests are adequately dealt with, whether you wish to hand the business down after you die or want it sold or dissolved. An experienced estate planning lawyer can help with a business succession plan that meets your needs.

Conclusion

To recap, the key benefits of engaging a lawyer to help with your Will include:

• Ensuring your Will is valid: Lawyers are trained to write valid Wills that meet all the legal formalities, minimising the risk of it being contested.
• Addressing complexities: A lawyer can help navigate complex issues such as blended families, vulnerable beneficiaries and business ownership. They can advise on testamentary trusts and business succession planning.
• Minimising disputes: By considering your unique circumstances and family dynamics, a lawyer can help prepare a Will that clearly outlines your wishes, reducing the potential for disputes among beneficiaries.
• Expert advice: Lawyers can provide comprehensive tailored advice that also considers other estate planning issues like trusts, powers of attorney and enduring guardianship.

A well-drafted Will ensures your assets are distributed fairly and according to your wishes, bringing peace of mind for you and your loved ones.

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].

Deceased Estates – What Happens When Executors Don’t Agree

When someone dies, their assets are usually distributed according to their will. The person responsible for managing and distributing these assets is the “executor” of the deceased estate. In some cases, a will appoints more than one person to act as executor, and these individuals normally need to work cooperatively to execute the duties of the role.

The importance of estate planning before capacity becomes an issue

We should all plan for our future. Certainly, we should all have a current will, especially those of us who need to make special arrangements for the care of children or pets. Many of us would also benefit from making a formal arrangement to account for a time when we could find ourselves unable to make our own decisions. These arrangements have different names according to where you live in Australia, but they are alike in that they give authority to someone we trust to make decisions – whether financial or personal – in our best interests.