Article of Interest on Wills & Estates

ADMINISTRATION OF THE ESTATE 

Robyn had gone to great lengths after the death of her husband to establish an estate plan which would benefit her children. The value of Robyn’s estate was $4 million.

Robyn knew that the cost of establishing an effective estate plan was worthwhile as it gave her security and resulted in opportunity for her children.

The estate planning advice received by Robyn was careful, meticulous and tax effective. The gifts given by Robyn to her 4 children were structured through her Will, using trusts, to maximise the benefit the children would receive.

After Robyn’s death, Robyn’s Executors sought assistance from a Lawyer, Mr Cheap, to administer the estate. They did not stay with the Lawyer who drafted the Will as that Lawyer charged “too much”.

Mr Cheap did not completely comprehend the Will and was not able to explain the benefits of the trusts to the Executors. Mr Cheap was complacent, assuming that the children would all get $1 million and it did not matter how.

Well it did matter. One of the children was on the point of bankruptcy; one was having a serious relationship dispute with his partner, and yet another was involved in risky business ventures and about to be sued. Mr Cheap’s failure to recognise the benefits and protections built into the Will was, in essence, a distribution of Robyn’s money to unknown and unintended third parties.

A Lawyer administering an estate must be capable of understanding and identifying the benefits in the structure of a complex Will. Then direct the beneficiaries to professional advisers who can assist them to maximise the opportunities in the Will.

The result was that Mr Cheap was not cheap at all. Taxation benefits were not used, assets were lost to creditors and assets which could have been protected were reduced and exposed to danger.

You may have to pay a little more for good advice when you are called upon as the Executor in an estate. However, the cost will be well and truly outweighed by the benefit of the knowledgeable, experienced estate advice.

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