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  • Succession Planning – more than just having a Will

    The legal landscape is littered with stories of fortunes lost and/or families torn apart – particularly where a farm or a family business is involved – as a direct result of inadequate succession planning. But even for those of us who live in more humble circumstances, good succession planning is really important. A classic example involves the family home. Typically, when Mum and Dad pass on, the house is sold and the money is split between the kids. Quite often, one of the children wants to purchase the house from the estate, but doesn’t have enough money to do so (even if they use their share of the residuary estate). Tensions can begin to rise between the children – tensions which can become especially acute if the child in question does not yet have a home of their own (an increasingly common situation). But there are potential solutions – especially if advice is sought while Mum and Dad are still alive. Succession planning isn’t about money – it’s about the family legacy that you leave behind.

  • Residential Care Subsidies – Part 1

    The need for residential care for the elderly is growing. This care has to be paid for, and so many elderly New Zealanders (or more usually, their children) are applying to the Ministry of Social Development for residential care subsidies. Wading through the extensive application form and searching for the required records can be a very stressful experience. Then there’s the correspondence that follows: 1. Letters from the Ministry; 2. Requests for additional information and banking records and legal records; 3. More letters from the Ministry, none of which sound particularly encouraging. Your first instinct (and perhaps your second and third instincts…) will probably be to give up. Don’t give up. There is no denying that it is not getting any easier to qualify for a residential care subsidy. However, it is often worth questioning the initial response. And while no victory is ever guaranteed, we have been able to help a number of clients ask the right questions and see their application through to success. If you would like to discuss a residential care subsidy application give us a call (03) 477 8080

  • Succession Planning – getting down to business

    The more financially successful you are, the more there is to manage, even when you are no longer here to manage it. And while a nest egg – however vast – can be readily divided as per your wishes, succession planning with respect to a working business or farm is a different issue entirely. How do you pass the family business on to one of your children (and in a commercially viable form) while at the same time treating your remaining children fairly? The answer is with conversations, sound advice and thoughtful planning. Succession planning is ultimately about the nature and the quality of the family legacy that you leave behind. The best legacies do not arise fortuitously from the pages of a last-minute Will. The best legacies are built very deliberately, in some cases over many years. So the sooner you begin building, the better.

  • Succession Planning – buying the farm

    Successfully passing the family farm on to the next generation in a way that it remains commercially viable and remains in the family, is fraught with challenges. Even if the kids all get on really well, over time their own families will grow and/or change – as will the needs and ambitions of the individual family members. But what if it’s even more complicated than that? What if the eldest child wants the farm, while three siblings just want a/their share of its cash value? How do you treat them fairly without selling or crippling the farm? What if all of the kids want a piece of the farming action, but they don’t get on with each other or the farm isn’t big enough to simply split into separate operations? Every farming family faces its own unique set of circumstances and challenges. These kinds of dilemmas rarely have easy solutions, and even the mere act of thinking about them can be really stressful. But with honest conversation, thoughtful consideration and careful planning, a solution can usually be found.

  • What to expect when finalising an estate

    When a loved one passes away grief is experienced differently by each family, and members within each family, and administering an estate can be difficult during this time. Our role is to assist the executors in a sensitive and caring way, and to provide you with excellent legal advice. Your first meeting with Lucas & Lucas After a loved one passes, the first step is to meet with the family. Usually this will be at a time shortly after the funeral. During this meeting, we discuss the will and help the executor(s) to consider if Probate is required. Probate is the term used when someone dies leaving a will. The person(s) named in the will as the executor(s) apply to the High Court to have the will declared valid and to administer the estate. Probate gives the person(s) the authority to manage the estate. Probate is required if there is, with any one bank or investment institution, more than $15,000 or if land is in their sole name or as tenants in common. If in the unlikely event there is no will, we discuss the options available and whether Letters of Administration may be required. Probate To obtain probate, we prepare for completion by the executor(s) an affidavit for grant of Probate (with the original will as an exhibit). The affidavit can be completed at our first meeting. We then arrange for the affidavit together with an Application and the draft Probate (court order) to be file in the High Court of New Zealand at Wellington. The filing fee is $200. This is filed with the High Court by courier. The court will consider the application and this takes usually between two to six weeks for the probate to be granted after this is filed. Confirm assets and liabilities of the estate We can assist with confirming the assets and liabilities of the estate. If the person owns jointly (joint tenants) a home, this asset would NOT form part of the estate, but we assist with the legal paper work for this to be transferred to the surviving owner (known as transmission by survivorship). If the person has joint bank accounts and/or investments then again these accounts would NOT form part of the estate and we can assist with the legal paper work to advise the bank or financial institution to have these transferred by survivorship. The remaining assets in the sole name of the person would then form the estate assets. These can include any car, bank accounts, term deposits, KiwiSaver, shares, investments, real estate and other valuable items, such as collectables. As required, we can assist the executor(s) to contact the organisations, close the bank accounts and investments, sell or transfer property and other assets and assist with the legal paper work. in advising the banks and financial institutions that the person has died. This then freezes the accounts/investments until probate is granted. to understand and comply with the IRD tax requirements for the estate. The tax rate for estate income is 33%. Each estate is required to apply for an estate IRD tax number and file tax returns. The IRD estate link is How long will it take? The time required to administer an estate varies depending on the circumstances of each estate. We estimate that simple and mid-sized estates usually take between twelve (12) to eighteen (18) months to complete, from the date of the grant of Probate. The length of time for estate administering varies depending on the number of assets of the estate and the number of beneficiaries. Some more complex estates can take significantly longer. We like to set realistic time frames. Where a will is challenged by a family member or there are complex assets, such as overseas property, administration may take longer. We have excellent relationships with solicitors in Australia, the United Kingdom and Canada to assist with any the administering any assets in these countries. Customer Due Diligence Please do not be offended when we request verification of identification and address. In practical terms we require proof of identification to verify full names, dates of birth and confirmation of residential address. This applies both to the executor(s) and to all the beneficiaries of the estate. All banks, financial institutions, stock brokers, lawyers and accountants are required to verify this information. The Anti-Money Laundering and Countering Financing of Terrorisms Act 2009 has placed increased emphasis on customer due diligence. We are experienced in collecting this information to streamline the administration process for the estates which we assist with the administration. For further information contact us or call (03) 477 8080

  • Estate Administration - Executors Roles & Responsibilities

    When you are appointed as an executor (and trustee) of a will it is important to understand the role. It is an honour to be asked, however the role comes with responsibilities and is time consuming and an unpaid role. As a named executor, you can either accept the position or decline the position. If you decide that you are not willing to perform the role and you have not had any dealings with the will-maker’s property after death, then you may renounce probate. This is done by signing a Renunciation of Probate document. This document is then filed with the High Court. The renunciation of Probate document is also referred to in the affidavit as the remaining executor(s) to explain why all the named executors are not applying for the grant of probate. If you are willing to perform the role as an executor it is important before you agree that you understand what you are agreeing to. ROLE OF THE EXECUTOR IS TO: Locate the original will, contacting their solicitor is usually the best option and conducting a search of their important papers. In the unlikely event that no will is located a solicitor can assist with advertising for a will with the New Zealand Law Society Will Search notices. Contact the Funeral Director for funeral arrangements in accordance with any instructions in the will. The decisions relating to the funeral are up to the executor, however a preference may be put in their will. The executors are guided by those wishes in the will together with the wishes of family. The payment of the funeral expenses has priority and is paid first from the estate. Notify banks, credit card companies and government agencies (e.g. Inland Revenue). We recommend that their bank is advised that the person has died as soon as possible. Although the bank account is frozen pending the grant of Probate the funeral expenses can be requested to be paid directly by the bank to the Funeral Director if the bank is provided with a copy of the funeral invoice and the death certificate (usually certified copies) and the executors approve the invoice for payment. My Trove is a website which allows for executors to notify some banks and government and some insurers that a person has died Apply for probate, if this is required. You will usually seek legal advice about whether an application for the grant of Probate is required. This is the application to the High Court of New Zealand. See Estate Guide. The executors and trustees take a neutral position and owe a duty to treat the beneficiaries even-handedly. This duty extends to potential claimants against an estate, where an executor is aware that they may wish to make a claim The executors and trustees need to keep a record of the inventory of the estate assets and liabilities. An account of the estate (estate statements) needs to be recorded that is accurate and states the dates and details of all receipts and disbursements and details relating to the capital and revenue account (for taxation). Once probate is granted, call in the assets and pay all the debts and the funeral and testamentary expenses. Maintain any property until it can be distributed or sold. Have prepared and file the required personal and estate income tax returns and pay any tax owing. Distribute the estate in accordance with the terms of the will. IMPORTANT POINTS Both Powers of Attorney and Enduring Powers of Attorney (Property and Personal Care and Welfare) CEASE ON DEATH. If personal chattels have not been mentioned separately in the will, then those items form part of the residuary estate. If Probate is required, then once Probate is granted, the will which is attached to the Probate document becomes a public document and anyone can request a copy from the High Court of New Zealand, Wellington upon payment of a fee. An executor may receive a request for a copy of a will before Probate is granted or applied for, by a potential beneficiary. We recommend that it would be prudent for the executor to provide a copy of the will in case there is to be a challenge to the will. If the person had a joint bank account(s), the account is not frozen and the bank will be able to transfer the account into the sole name of the surviving account holder once the death certificate is available. If the person had a house, then make sure that the property is insured and if the house is unoccupied that the unoccupied status has been notified to the insurer and this is confirmed in writing to the executor. The insurer will have a number of requirements for unoccupied homes which will need to be complied with. Also, the local council and regional council should be advised of the death and you should check that the rates payments are up to date. If the executor does not apply for Probate within three (3) months of the death then one of the beneficiaries can apply to the High Court to be appointed as Administrator. This is not usual and is a complex process. Executors need to be aware of the “Executors Year”. The time required to administer an estate can vary depending on the circumstances of each estate. We estimate that simple and mid-sized estates usually take between twelve (12) to eighteen (18) months to complete, from the date of the grant of Probate. However, estate administering can take longer depending on the number of assets of the estate and the number of beneficiaries. An executor can be appointed as an executor and also be a beneficiary of the will. If you do not accept the role of executor, this does not affect receiving any inheritance in the will. It is important that executors take legal and accounting advice where necessary. Once Probate is granted, if the estate is modest, the executor(s) and trustee(s) of the estate may prefer to carry out the terms of the will, without the assistance of solicitors, to keep the legal costs to a minimum, seeking legal advice when necessary.

  • Updating your will - Testamentary Guardians

    We recommend when you are considering updating you will, that if you have a child or children, you consider who you would like to be involved in the decision making for you children. You do this in your will by appointing a guardian to take over some responsibilities for your children, if you die. Guardians appointed under a will are called testamentary guardians. It is important that you know that just because you appoint a testamentary guardian does not necessarily mean they will provide the day-to-day care for a child(ren), but they are responsible for making the key decisions concerning the upbringing of the child and it helps everyone to know who needs to be involved in the big decisions. While you are not required to appoint a testamentary guardian for your children, we do recommend that it is a good idea to include one in your will. Both parents of a child may appoint a person or persons in their will to be the guardian of the child following their death. This is especially important should both parents die together or one parent dies, especially if that parent is separated or divorced. The court will always focus on the best interests of the child. As parents, we encourage you to focus on who will be able to assist the court know your child’s best interests. If you need advice, give us a call 03 477 8080.

  • Updating your will – Your executor

    Who will be your executor? When choosing executors and trustees for your will, we encourage our clients to take time to think who will be best suited for the role and also who would be good substitute executors and trustees should your first choice have predeceased you, or be living at the time of your death but are unwilling or unable to act. Why is it important to consider where your executor and trustee lives? It is increasingly common to have family members living permanently overseas, returning only occasional to see family. We encourage our will-makers to consider where your executor lives. If possible, we recommend that you consider choosing executors who live in New Zealand. However, we know that most parents usually like to treat all their children equally and often wish for all of their children to be appointed as executors and trustees in their will, so they are all the decision-makers. We do encourage will-makers to think how best to ensure their wishes in their will are carried out. The responsibility of dealing with different financial institutions is increasingly onerous, because of the increased compliance required by banks etc. Whilst we are skilled at assisting executors and trustees carry out their role, cutting through the red-tape, often our New Zealand based executors are able to navigate the processes more quickly whilst still keeping all the family informed throughout. Careful thought should be given when choosing executors and trustees who live overseas, especially if there will be a testamentary trust in the will, for example a share held for a child to the age of 25 years. This is because there will be a trust for the longer term and this potentially may have some tax implications if 25% or more of the trustees live overseas. Is it time for a review? We also encourage all our clients to regularly review their will, especially at different life stages. Importantly, when you get married then your pre-marriage will becomes void (unless made in contemplation of marriage) and you should have a new will. Also, if you separate or divorce you should review your will as soon as possible. If you need advice, and would like to review your will please give us a call 03 477 8080.

  • Your Legal Affairs - What to consider if circumstances change

    YOUR WILL It is easy to put off one of the most important documents that you will make in your lifetime – your Will. You may already have a Will in place but when was the last time you reviewed it? Do you know where it is held? Does it still benefit the correct people in your life, or have your wishes or financial position simply changed over time? This may be the time to revisit your existing Will and think about any changes that may be required. You don't have a Will the law will determine how your estate is divided, and this could be very different to what you want to happen. Your Will stipulates what you want to happen to your property and possessions after you’re gone. Having a Will ensures that the people and things that matter most to you are taken care of later on. ENDURING POWER OF ATTORNEY Do you need Enduring Powers of Attorney? For most people the answer will be a simple “YES”. They are called “enduring” powers of attorney because they continue to have effect even after a person loses mental capacity. This is the very time when people need care. Enduring Powers of Attorney allows other people to make decisions on your behalf. It is always good to have your affairs in order and to have proper arrangements for the future. Enduring Powers of Attorney give you control over who will look after you and how your affairs could be managed. It’s all about peace of mind. MANAGING YOUR AFFAIRS Are your assets (your family home, bank accounts investments etc) jointly owned and in both your names? If your spouse or partner dies (before you do), any assets that were not jointly owned by yourself and your spouse/partner – i.e. your name was not on the applicable ownership documents – will immediately form part of the deceased’s estate. Paying Bills Is your name on your utility accounts? Do you know how to pay for your utility bills? And do you have authority to speak to your utility providers? RESIDENTIAL CARE SUBSIDY To qualify for the Residential Care Subsidy the value of your assets must be equal to or below the application threshold. If you meet the asset threshold, the Ministry of Social Development will also complete an income assessment. When assessing your application, the Ministry is required to make calculations that are accurate and precise. We can help you to make sure that it does. If you need advice, give us a call 03 477 8080.

  • Purchasing Estate Assets

    Deceased estates are not without their challenges. Perhaps one of the more common challenges arises where one (or more) of the beneficiaries of the estate wants to purchase an estate asset – e.g. the family home or perhaps a vehicle. The executors of an estate have a legal obligation to protect the interests of the residuary beneficiaries. That means all of the residuary beneficiaries – not just the ones they like. In practical terms, this means that the executors are obligated to realise the maximum value of the estate – i.e. sell the estate’s assets for something approximating market value. Consequently, an executor who decides to cut one (or more) of the beneficiaries a sweetheart deal on the family home without the approval of the other beneficiaries, is playing with fire. Aside from potentially laying a foundation for family conflict, they are putting themselves in harm’s way from a legal point of view. There are many different roles within this scenario: the executor of the estate, the beneficiary wishing to buy an estate asset, or another residuary beneficiary. Whichever applies to you, and you require advice, give is a call 03 477 8080.

  • Problems & Solutions

    It can be tempting to approach your relationship with your lawyer in much the same way as you approach your relationship with St John – you only call them when things start going awry. And this is understandable: most of us don’t want to get a bill from our lawyer any more than we want to take a ride in an ambulance. Of course, some problems hit us like a well-laid ambush – unforeseen and entirely not of our making. But there are plenty of snags and landmines that we can lay for ourselves – despite our best intentions. What is more, not every problem has a readily available solution; not every injustice has an immediately apparent remedy. At Lucas and Lucas we will always do our best to help you solve (or at least mitigate) the challenges that confront you from time to time. But where we have the best opportunity to add the most value to your life and your affairs, is working with you at the beginning. Helping you to develop the plans that will lay the groundwork for the future that you are trying to build. Let us help you prepare for the worst, so that you can genuinely hope for the best. If you need advice, give us a call 03 477 8080.

  • The Ins and Outs of an Enduring Power of Attorney (EPOA)

    Attorney The Attorney is obliged to act in the best interests of the Donor. They also have a duty to consult the Donor whenever possible, and to encourage the Donor to act for themselves. In the case of a husband and wife, it may be appropriate for them to appoint each other in the first instance as their attorney and to appoint an adult child as their successor attorney. There are two kinds of Enduring Power of Attorney: in respect of Care & Welfare, and in respect of Property. If different Attorneys are appointed for Care & Welfare and Property, then they have an obligation to consider each other when making decisions. The Property Attorney needs to provide funding for the Welfare decisions, and the Welfare Attorney should consider the financial impact of their decisions. The Deed of EPOA can stipulate that certain people are to be consulted in any decisions regarding the Donor’s Property or Welfare. This is particularly useful if one child has been appointed as Attorney and the remaining children need to be kept advised of any decision making. Attorney Rights and Obligations The rights and obligations of an Attorney are governed by the Protection of Personal and Property Rights Act 1988 (“PPPR”), the PPPR Amendment Act 2007 and the Deeds of Enduring Power of Attorney themselves. An Attorney is required to: Act in the best interests of the Donor, while encouraging the Donor to develop the Donor’s competence to manage the Donor’s own affairs in property and personal care and welfare decision making. The Court can revoke the appointment as Attorney for failure to act in the best interests of the Donor; Encourage the Donor to understand the nature and foresee the consequences of decisions, and to communicate such decisions; Facilitate integration into the Community; Keep records of financial transactions as the property Attorney. Failure to do so is punishable by a fine not exceeding $1,000 for each separate offence; and Must not act for the benefit of themselves or others unless authorised by the Court or the Enduring Power of Attorney document. An Attorney is able to make investments, loans, advances under the Trustee Act 1956, and claim out of pocket expenses. Once a Donor has become mentally incapable the Family Court has the power to review an Attorney’s decisions. There are a number of people who can request the Court to review an Attorney’s decisions, these people are: Donor Relative or another Attorney of the Donor Social worker/Medical practitioner Trustee Corporation Manager of the hospital or rest home in which the Donor resides Donor’s Welfare guardian Elder abuse and neglect prevention service representative Any other person with the Court’s permission Suitability of Attorney The Legal requirements are that an Attorney must be: At least 20 years; Not bankrupt Not subject to a personal or property order under PPPR Act 1988. For an EPOA in relation to Property, the Donor can appoint a Trustee Company, but for an EPOA in relation to Welfare, the Donor cannot appoint Trustee Company – i.e. they have to appoint a person. Presumption of Competence Under the Act all Donor’s are presumed competent until proven otherwise. There is no longer any provision for partial lack of capacity; a Donor must wholly lack capacity before the Attorney can exercise their powers. Mental Incapacity – Proof Proof of mental incapacity is provided by medical certificate (prescribed) completed by a relevant health practitioner whose scope of practice includes assessment of a person’s mental capacity. The NZ Medical Council has confirmed GP’s and Psychiatrists qualify and has reserved its position, subject to legal opinion, as to what other health practitioners qualify. For an Enduring Power of Attorney in Relation to Property – a medical certificate is required before the Attorney can begin exercising any powers, unless the Donor has chosen to put the Property EPOA in effect immediately in which case mental incapacity is not relevant. For an Enduring Power of Attorney in Relation to Personal Care & Welfare – a medical certificate is required prior to making decisions on significant care & welfare matters; on other non-significant matters, mental incapacity is assessed by the Attorney based on reasonable grounds i.e. an evidence based assessment. The Donor’s mental capacity must be determined afresh, and for each of the significant matters, medically certified. If there are any doubts regarding the Donor’s mental capacity, obtain the medical opinion. The Attorney pays for the medical assessment and recovers the costs from the Donor. Suspend or Revoke Should the Donor lose but then subsequently regain mental capacity, they can suspend authority of the Attorney by written notice. The suspension does not terminate the Enduring Powers of Attorney and it can be re-activated if the Donor subsequently becomes mentally incapable again. The Donor can also revoke the authority by written notice. A revocation terminates the Enduring Powers of Attorney. If you need advice, give us a call 03 477 8080.

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