WILLS, ESTATES, SUCCESSION PLANNING & ESTATE LITIGATION Should you pay a lawyer to apply for a grant of probate?

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1 MATTERS FEBRUARY 2017 WILLS, ESTATES, SUCCESSION PLANNING & ESTATE LITIGATION Shoud you pay a awyer to appy for a grant of probate? For many peope their first experience of being an executor occurs after the death of a famiy member or friend. Aside from the grief and confusion, you now find yoursef in uncharted territory. So, where do you start and what shoud you do? Increasingy, many first-time executors are turning to the Internet for advice. With a preponderance of cheap onine DIY Estate Administration kits avaiabe, some executors fee that they no onger need to pay for a awyer to obtain a grant of probate and decide to do it themseves. After seeing a growing number of executors get into ega difficuties, we expain the reasons for obtaining expert ega advice from the outset. What is a grant of probate? A grant of probate is the process by which the Wi is vaidated by the Supreme Court of Victoria. Once probate has been granted, the executor can then dea with the assets and iabiities of the estate. What does the executor need to do? An executor is responsibe for the foowing: Determining what debts and iabiities have to be paid by the estate. Locating and securing physica assets owned by the deceased both individuay, jointy and through a company or trust. Locating assets hed by banks, share registries, insurance and superannuation companies. Working out the vaue of a assets and the requirements for deaing with them. Ensuring that there are no other issues, such as ongoing ega proceedings, which coud impact the estate. Sometimes this process can be quite simpe. But if the estate is compex, or if the deceased was a poor recordkeeper, obtaining this information can be quite onerous and time consuming. Once the information is assembed, the executor needs to assess whether a Grant of Probate is needed to dea with the assets, and if so, start the appication process. Why use a awyer? Our Probate Team can assist you by: Obtaining the reevant information about the deceased s assets and iabiities....continued on page 2 Expert advice. Practica soutions. Persona service.

2 2 PROPERTY & OWNERS CORPORATIONS...continued from page 1 Liaising with financia institutions, share registries, brokers, accountants and other third parties on your behaf. Preparing the Probate appication. This incudes affidavits and exhibits, financia institution forms to cose accounts and dea with shares, authorities and statutory decarations, as required. Providing advice about the interpretation of the Wi, unusua procedura issues which may need to be addressed (such as different speing of names, cause of death, formaity of Wi etc.), debts of the deceased unknown to the executor and potentia caims against the estate. Finay, the distribution of assets to beneficiaries in accordance with the Wi. We strive to make the process of appying for Probate and administering the estate as efficient and stress-free as possibe. This ensures that executors fufi their ega obigations whist minimising the risk of persona iabiity, which may arise if mistakes are made. Ines Kaweit, Partner Accredited Speciaist in Wis & Estates ines.kaweit@mckeanpark.com.au Airbnb issues for owners & tenants The Airbnb phenomenon has hit Mebourne. A quick search of the Airbnb website wi show how many peope are converting rooms in their homes and outfitting investment properties in your oca area. However, before you jump on the bandwagon and ist your property, there are a range of ega issues that you shoud consider. Airbnb ega considerations 1 Panning aws Do oca panning aws aow your premises to be used for Airbnb accommodation? A quick ca to your counci wi answer this for you. 2 Buiding aw Does your buiding compy with buiding aw enabing the use of the premises for Airbnb accommodation? Different construction requirements appy to buidings depending on their cassification (i.e. residentia homes and mote/hotes are cassified differenty). Occupancy permits are issued on the basis of a buiding s cassification and a person is prohibited from occupying a buiding in breach of the occupancy permit. 3 Mortgagee consent Most mortgages prohibit borrowers from parting with possession or occupation of the property without first obtaining the written consent of the ender. Therefore, the ender s written consent may be required before you ist on Airbnb. 4 Insurance occupation issues Under most insurance poicies you shoud be abe to identify who is in occupation of your premises at a times. What steps wi you take to verify the identity of the person who is occupying your Airbnb premises? 5 Insurance property damage, persona injury and contents cover Wi your insurance on the property incuding property damage, pubic iabiity and contents be affected? Contact your insurer to check your property is protected to cover the potentia iabiities arising from Airbnb occupancy. 6 Tax Impications Any money-making enterprise wi have tax impications. Money paid by an occupant/guest wi be assessabe renta income. Expenses can ony be caimed in the area of the premises subject to the Airbnb arrangement. If the property is your principa pace of residence it woud be exempt from capita gains tax. However, under an Airbnb arrangement there may be a oss of the whoe or part of the capita gains tax exemption. Aso, if you conduct an Airbnb business and income derived from it is above $75,000 per annum, you may need to register for GST. 7 Residentia Tenancy Agreements If you are a tenant under a Residentia Tenancy Agreement, you shoud obtain your andord s written consent before entering into Airbnb. If you are a andord and wish to prevent your tenant from using the property as Airbnb, you shoud incude an appropriate cause in your Residentia Tenancy Agreement. 8 Body Corporates/Owners Corporations issues Owners Corporations sometimes pass rues restricting ot owner s rights as to the use of their apartment or unit. A recent Supreme Court ruing has indicated that an owners corporation rue prohibiting the use of an apartment or unit from etting as short stay accommodation wi probaby be invaid.

3 ROTARY 3 Cubs protect your members by incorporating! For many Austraians, eisure time invoves membership of a cub. Sporting groups such as cricket, tennis and footba cubs and community service organisations such as Rotary, form the fabric of our society. Other cubs are based around a hobby or interest or a shared ethnicity or cutura background. The importance of incorporation Ensuring that your cub has a sound ega structure is vita. As a weestabished means of ega protection many cubs incorporate. In the eyes of the aw, once incorporated the cub becomes a person, separate from the human persons who are its members. Therefore, as an artificia person the cub becomes soey responsibe for cub debts. Owners Corporations Amendment (Short Stay Accommodation) Bi 2016 Approximatey 45,000 peope ive in centra Mebourne, Southbank and Dockands - most in apartment buidings. The peacefu enjoyment of these occupiers has been affected by other apartments being used for weekend parties such as bucks parties, footy trips and schooies week. At the time of writing, the Owners Corporations Amendment (Short Stay Accommodation) Bi 2016 is going through the process of being approved by Pariament. It is anticipated it wi be passed eary this year and come into force on 1 Juy The Bi is aimed at reguating accommodation arrangements and curbing inappropriate short-stays. An important feature of this Bi is that both the Airbnb provider and the short-stay occupant may be iabe to pay oss of amenity compensation. Airbnb what to do? Airbnb has ega pitfas for the unwary. Before signing up, we suggest you access our services. We can assist with an individua anaysis of your property ega risk scenario. Robyn Crozier Consutant Lawyer Accredited Speciaist in Property Law robyn.crozier@mckeanpark.com.au Don t make your members iabe! Without incorporation, members are individuay iabe for cub debts. Even worse, the person to whom the debt is owed can sue seected members of the cub, and they in turn, must sue other members to recover their shares of the debt and costs. What types of debts are invoved? Debts can be everyday costs resuting from purchases, services or trading. They can incude damages for injuries, oss or wrongs suffered by a cub member. Damages incurred by a third party as a resut of something done by the cub wi aso constitute a cub debt. How do you incorporate? Firsty, your cub must compy with the incorporation aws of its State or Territory. Secondy, your cub Rues must conform to these aws and be registered as a pubic document. Thirdy, the name of your cub must contain something which indicates that it is incorporated such as the word Incorporated or its

4 4 abbreviation Inc. With our assistance, your cub can be quicky registered for incorporation anywhere in Austraia. Rotary Cubs specific issues Incorporation protection for Austraian Rotary Cubs is more compicated. As part of an internationa organisation, Rotary cubs must use the Standard Rotary Cub Constitution (SRCC) and, subject to variations, the Recommended Rotary Cub Byaws (RRCB). These documents are not drafted to compy with the incorporation aws of any particuar country or state or the fact that many countries do not have incorporation aws. They are designed for use by unincorporated cubs and must be rejected when used to appy for incorporation in Austraia. Rotary Cubs the probem of using Mode Rues To overcome this probem, many Rotary cubs mistakeny turn to the State s Mode Rues. Athough appearing to be an easy way to incorporate they potentiay create many probems and, in fact, sove none. Once incorporated, Rotary cubs have no option but to sideine the Mode Rues or dummy rues and conduct their business under the provisions of the SRCC and RRCB. Potentia dangers, especiay in reation to insurance and management can resut. Shoud a dispute arise, a Court woud regard the Mode Rues as the ega rues of the cub. If this resuts in the cub being wound up, its funds must be distributed in accordance with its Mode Rues and not in accordance with its Rotary documentation. This incudes the funds of both the Cub s service projects and cub operations accounts. It is so simpe for anyone suing your cub, to discover it is operating on Rues other than those it is supposed to. Armed with that knowedge earned counse wi have a fied day cross examining your cub officers and witnesses, perhaps even you! What shoud Rotary cubs do? None of these probems need occur. The answer ies in the creation of Rues that compy with the requirements of the State or Territory under which the cub is incorporated, as we as those of Rotary Internationa. McKean Park has drafted, and reguary updates such rues. These can be provided eectronicay to your cub upon request. Ross Bair, Specia Counse ross.bair@mckeanpark.com.au Expert advice. Practica soutions. Persona service.

5 COMMERCIAL & TAXATION 5 Unfair terms in sma business contracts From 12 November 2016, amendments made to Austraian Consumer Law have extended the appication of consumer-focused unfair contract term protections to sma business. What is the aim of the egisation? The aim of the egisation is to protect sma businesses from unfair contract terms in standard form contracts. This wi appy to any contract where either party is a sma business. What is a sma business? A sma business is defined as being a business with ess than twenty (20) empoyees. This is assessed on a headcount basis at the time the contract is either entered into, varied or renewed. The headcount aso incudes casua empoyees who are empoyed on either a reguar or systematic basis. What is a standard form contract? A standard form contract is not defined by the egisation. However, it ought to be interpreted as a contract that is provided by one party to another on a take it or eave it basis. Does the amount of the contract matter? The vaue of the contract is reevant. As such, the upfront price required by the contract must: not exceed $300,000.00, if the contract is for tweve (12) months or ess; or not exceed $1,000,000.00, if the contract is for a duration of more than tweve (12) months What woud deem a contract term to be unfair? A term in a sma business contract wi be unfair if it: causes a significant imbaance in the parties rights and obigations under the contract, Expert advice. Practica soutions. Persona service.

6 NEWS 6...continued from page 5 is not reasonaby necessary to protect the egitimate interests of the party who woud be advantaged by the term, woud cause detriment (whether financia or otherwise) to a party if it were to be appied or reied on. Where does the burden of proof ie? The burden of proof wi be imposed on the party seeking to rey on the term or condition. As such, they must prove that the term is reasonaby necessary to protect their egitimate interests. In determining whether a term is unfair, a Court must take into account the foowing: the extent to which the term is transparent, and the context of the term in the contract as a whoe. A term wi be transparent, if it is expressed in reasonaby pain anguage, is egibe, ceary presented and readiy avaiabe to a party affected by the term. What if the term is proven to be unfair? If a term is hed to be unfair it wi be void and unenforceabe. However, the contract itsef wi continue to bind the parties if the contract can operate without the unfair term. What types of contracts are invoved? The unfair terms egisation appies to many different types of contracts. This incudes eases, suppy contracts, website terms and conditions, contractor agreements and many other commercia agreements. What action shoud be taken? As a resut of these changes, a terms and conditions used in standard form contracts shoud be reviewed. This is important, as they may be subject to the amendment introduced into the Austraian Consumer Law. If your business reies on standard form contracts and reguary contracts with individuas or sma businesses, you shoud seek our advice. We wi assist you to ensure compiance with the new unfair contract terms regime. Mark Fynn, Partner Accredited Speciaist in Commercia Tenancy Law & Business Law mark.fynn@mckeanpark.com.au Wecome to Phoebe Bank It was with peasure that we wecomed Workpace Reations awyer, Phoebe Bank, to McKean Park in Juy Phoebe was admitted as a awyer in 2013, having attained a Bacheor of Laws and Bacheor of Commerce at Deakin University. Since graduating, Phoebe has practiced principay in the fied of workpace reations. She enjoys assisting cients with practica soutions to bring about a resoution to their workpace reations issues. To further her studies, Phoebe is aso competing a Masters of Empoyment Law at The University of Mebourne. Outside of work, Phoebe enjoys ong distance running. She is currenty training to compete in the Great Wa of China Marathon in May this year. Wecome to the team Phoebe! Our expertise Aged Care & Retirement Living Buiding & Construction Commercia & Taxation Commercia Litigation Famiy Law Insovency Leasing Property & Owners Corporations Rotary Wis, Estates, Succession Panning & Estate Litigation Workpace Reations. If you woud prefer to have this newsetter emaied, require more information, permission to reprint or do not wish to receive any marketing materia from McKean Park, pease emai Catherine Nguyen on catherine.nguyen@mckeanpark.com.au. Discaimer You shoud not act on the basis of materia in this newsetter as the contents are of a genera nature ony and may be iabe to misinterpretation in particuar circumstances. Changes to the aw occur quicky. Do not act on the contents of this newsetter without first obtaining advice from McKean Park Lawyers. McKean Park Lawyers Leve 11, 575 Bourke Street Mebourne Vic 3000 T F E info@mckeanpark.com.au Expert advice. Practica soutions. Persona service.