Brisbane’s Legal Lowdown: Survivorship, Succession, and Wills

Sofie: And it’s time for this week’s legal lowdown with Attwood Marshall Lawyers. We’re unpacking legal issues that impact all of us, and today’s topic brings to mind, you know, that interesting tradition that we hear about usually when it comes to very wealthy families I guess, like the British royal family or, you know, maybe very, very wealthy families where they’ll make sure direct heirs don’t necessarily travel together, and it’s not about superstition. It’s about practicality. Because they say if something unexpected were to happen, there’s a clear line of succession.

And it’s not something that most of us would consider, but it’s an important question to raise. What happens if multiple family members are involved in an accident or pass away at the same time? And there can be some surprising legal hurdles in these thankfully rare scenarios, but ones that should still be considered.

For example, how does the law resolver jointly owned asset if wills give two different sets of instruction. And does the order of death matter when it decide comes to deciding who would inherit what? So, to unpack this rather sensitive subject, but again, one that we can’t avoid, joining us as he does regularly, Attwood Marshall Lawyer, Estate Litigation Senior Associate Duncan MacDougall. Good afternoon.

Duncan: Thanks for having me again.

Sofie: You were looking at me with a smile on your face as I was asking the question about what your parents have taught you. Anything you’d like to share?

Duncan: Well, I’m no seamstress, so I don’t know if I could thread a needle either, but I can try my best.

Sofie: Anything in particular that comes to mind?

Duncan: I’m thinking back to the time, even gardening where I grew up on a farm so like plants just came necessary. I could probably keep a plant alive.

Sofie: That’s good. That’s good news.

To the matters at hand today, and like I, it’s true that this is something people don’t necessarily want to think about, but we’ve certainly had this conversation in my own family. If Scott and I are travelling together and the kids are being left at home, you have to kind of consider what would happen if there’s something that involved an accident where one or both of us don’t come home.

Duncan: Yeah, exactly. And there’s certain rules in place to deal with that succession of assets and to deal with either simultaneous deaths, where you pass away together and survivorship rules. So, making sure that a certain person has survived a certain period of time, so, there’s no double up of administration from one estate to the other.

Sofie: What does happen in the case of the wills? Which one if they’re not entirely the same or one’s been updated before the other, do you go by?

Duncan: Well, I’ll give you an example. Let’s say we got Jack and Jill. Jack is say 65. Jill is age 60. She’s younger than Jack. Say they’re in a car accident. That example you gave in that case say they do have some jointly owned assets; they got assets separately in their own names. But in this case, the law deems the younger surviving the older if they were to pass away together and they can’t decide who passed away first.

So, in this case Jill is to be presumed to survive Jack.

In the case of a blended family, say they went and got their wills done at different times. In this case, that jointly owned property will naturally flow to Jill because she’s presumed to have survived Jack. In that case, her children from her side of the family were to benefit, leaving Jack’s side of the family out of the picture.

Sofie: Jack’s side of the family not happy.

Duncan: Not happy at all. Again, and in this case, there’s also a 30-day survivorship rule. So, all beneficiaries have to survive a deceased by a period of 30 days to receive an inheritance.

Sofie: Right.

Duncan: So given that same example, Jack and Jill are in an accident and Jill passes 10 days later. Again, it’s not going to fall into her estate because she technically did not survive him by that set legislative time frame. It then passes to those alternate beneficiaries who were outlined in her will, so it’s all going to come down to who you’ve got there as alternates and even further alternates. So maybe they’re travelling as a family. Their three kids are in the back seat.

Sofie: I know I don’t even like to think.

Duncan: You don’t want to put your mind to it, but these are the conversations that estate planning lawyers will have with their clients and to determine, okay, in these sort of situations, this is naturally what’s going to happen. Is there some restructuring that that we have to do to your properties or otherwise to make sure that we understand who’s going to benefit.

And then taking into mind those claims people who are entitled to bring applications for provision. So, if it ends up in in somebody’s hands when it wasn’t intended to, and that person can show need for further provision, then claims for provision come into play as well.

Sofie: You’re really outlining that this is something that needs to be considered. I think when you hear the word succession, you automatically assume that this is only for people who have a lot of stuff and a lot of money. You know, we’re seeing succession play out in real time with one of the most high-profile media companies and wealthiest families in the world that we go, well we don’t have enough for this to really matter. But clearly it does.

Duncan: And clearly it does, because you just never know in that case the succession of those assets. There may be one breadwinner in the family and they’re wanting somebody to benefit from their assets, but it’s going to naturally flow from estate to estate, depending on what the will says. So you may not think you have a lot, but you may be unknowingly be in an inheritance of some money or there may be some more assets there that you’re not aware of and to take into consideration like your superannuation, etcetera. So, things that are not normally considered part of your estate but also have to be factored in the estate planning process.

Sofie: Question that’s come through. Can you explain what survivorship clause is?

Duncan: Yeah. So that’s that 30-day rule. Now that’s separate to a vesting age for a beneficiary. So in that case then the will will direct this person has to obtain a minimum 18 to receive entitlement but maybe they think well that person’s not of age to decide what they do with their inheritance so that they increase that age to 21, 25, in which case it’s just going to be the executor or trustee of your estate who’s going to hold those assets on trust.

Sofie: So, what should people then be asking of their estate planner when it comes to writing their will or making sure that there’s a provision that their wishes are clear?

Duncan: Yeah. In the estate litigation space, unfortunately I deal with a lot of issues where it’s not clear because people have taken the step to do it themselves. They’ve taken the step to do a DIY Will kit.

Sofie: And there’s not a box that says what happens for succession?

Duncan: Exactly. So, when they’re having these conversations with their solicitor, it’s a bit of a checklist that we do to make sure they’re fully across all these different scenarios and what’s to happen and given all their assets, what’s to fall into their estate, what doesn’t.

So, it’s all these things that will come into play when they seek that advice. When in doubt, get that advice because you’re going to save a lot of money and costs and time and delays if you get it right in the first instance.

Sofie: So, have you really seen situations where these kind of events play out as rare as they might be, and there are two different wills and one family completely misses out because of this?

Like you, you wouldn’t think that you had to plan for it. Because the odds of it happening are so slim, but clearly they’re not zero.

Duncan: Yeah, and it’s not just because they didn’t get their wills done, maybe because it’s not just the one will you’re dealing with, maybe one person hasn’t gotten their will done at all. So, then it’s dealt with if it naturally flows to that person’s estate.

And that is dealt with under legislation under intestacy rules. So, then you’re dealing with a whole other different ball game, and I see this through multiple matters I’ve gotten on my desk right now.

Sofie: One of the things I think maybe I wish that I had learned a little more, you know we talk about those things you learned by osmosis, is being a bit more prepared for these sorts of things. And I’m hoping that our conversations every week prompt some conversations for my listeners with their families, with their estate lawyers, to just make sure that they ask those questions and make sure that they’re prepared for all of the things that may or may not ever eventuate.

Duncan: Exactly and have those conversations, especially with spouses and your children because a lot of times people want to keep their affairs separate. Some people take that mindset. But sometimes in people’s best interest to come together, have an idea what’s going to happen if either one of us pass away before the before the other, or if we’re passed away simultaneously, what’s actually going to happen with our estate?

Sofie: Thank you, as always, a pleasure to have you on to the show. If not for any other reason, Duncan then just to put a bit of a bomb under me to get this happening, Attwood Marshall Lawyers, Estate Litigation Senior Associate Duncan MacDougall, who joins us from the team at Attwood Marshall. You can always send through to us, they come along every week, so if there’s something in particular you’d like us to ask, you can send them through to us Afternoons at 4bc.com.au and always go ahead and reach out to them if you need their advice directly attwoodmarshall.com.au. Thanks Duncan.

Duncan: Thanks, Sofie.