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1300 COMLAW (266 529)

02 4704 9991

Suite 11, 354-360 High Street, Penrith NSW 2750
PO Box 1835 PENRITH NSW 2751

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Acting as a Guarantor

You have probably heard of the term “Going Guarantor” before. This usually occurs when somebody requires assistance to obtain a home loan or some form of finance and the bank wants another person who holds assets to guarantee the performance of the borrower’s obligations under the Loan Contract.

The most common scenario is where a guarantor relationship arises are:

  1. When someone is buying a home and require their parents to provide their own property as collateral to secure the loan.
  2. A purchase of the property through a self-managed superannuation fund. In this scenario usually the trustee of the super fund is the borrower, however if this is a corporate trustee (a company) then the members of the fund or Directors of the trustee company are usually required to provide a guarantee.
  3. In the context of a company loan whereby a lender lends money to a company for example for business purposes, the directors of that company are usually required to provide personal guarantees.

The most important considerations for someone considering acting as a guarantor are:

  1. You are promising that the borrower will meet their obligations under the loan agreement and if they do not you may be asked by the lender to pay the amount outstanding.
  2. You are putting your personal assets at risk as if the bank cannot obtain the funds they need from the borrower they come after you and in turn your assets.
  3. You need to seek independent legal advice before deciding to act as guarantor for any person or entity.
  4. It is important that you carefully examine the financial situation of the borrower to make sure that, in your opinion, they can afford to make loan repayments.

Before entering into any contract to guarantee someone else’s debt, make sure you have received legal advice and if necessary advice from a financial planner and/or accountant.

Our solicitors can provide you with independent legal advice for all types of guarantee documents.

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5 Things You Need to Know About Moving into a Retirement Village

If you are considering moving into a retirement or aged care facility, here are five things you need to know:

  1. In most cases you will be required to pay what is known as a refundable accommodation deposit. This is also known as an ‘accommodation bond’ or an ‘ingoing contribution’. All facilities in New South Wales are required to publish their required deposit amounts on a Government website and you should look at this before considering each facility.
  2. In addition to your initial deposit, it is likely you will have to pay ongoing fees. This will cover things like your use of the services in the facility such as buses and community centres. In addition to this you will usually have to pay for the water, electricity and other utilities you use on a user-pays basis.
  3. The amount you will have to pay is based on your income and assets. Most people think you need to sell the family home to fund an ingoing contribution into a care facility. This is not correct and in some cases you may be able to keep your home. You should always take the advice from a financial advisor who is skilled in this area and has a thorough knowledge of any implications a move will have on your aged care pension, if you are receiving one.
  4. In some facilities there may be a ‘departure fee’ payable if you leave the facility within a specified time after you move in. This means you have to be sure you want to make the move before you dive in.
  5. You may need to be assessed by an Aged Care Assessment Team before you are able to move into your facility. This will involve a number of tests, but you shouldn’t be nervous. The process is designed to make sure you have all of the facilities you need in your new home.

Making the decision to move from a family home into a retirement or aged care facility is a big one. It is absolutely critical you take the advice of a lawyer to discuss the contract/accommodation terms and a financial planner who can talk to you about how you can structure your assets so they work best for you while you make the transition.

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Superannuation Unravelled

We often say to our clients that when getting advice about things like estate planning the advice should be three-fold – that is they should see their lawyer, accountant and financial planner.

One of the most commonly misunderstood assets a person has is superannuation.

Superannuation is essentially money held by someone else on trust for you. This means that you do not have direct control over your superannuation and cannot access it at a whim. It is designed to provide you with money to live off in your retirement.

There are 3 main trigger points that will enable access to superannuation:
  1. Retirement (note there are specific age requirements in this regard);
  2. Total or permanent disability including terminal diseases in some cases;
  3. Death.

In relation to the third point it is important to remember that your Will does not dictate what happens to any superannuation you have when you die. This must be controlled outside your Will by making a “nomination” directly with your superannuation fund. Your lawyer or financial planner should be able to assist you with this.

Your superannuation is typically made up of two components:
  1. The money you and your employer have contributed and accrued over your working life;
  2. Any insurance component that might be included in your fund.

What you also may not know is that you may be able to obtain income protection, total or permanent disability insurance and life insurance within your superannuation fund. This means that you do not need to pay for it out of your own pocket from the income on which you live but rather it can be paid from within your super fund.

Here are three tips we recommend to make sure that your superannuation is working for you:
  1. Consult your lawyer about how you can make sure your superannuation ends up with the right people when you die and include this in your estate planning process;
  2. Consult your financial planner about how you can combine multiple superannuation funds into one and potentially fund insurance from within the fund.
  3. Talk to your accountant about the taxation treatment of superannuation to make sure that you are maximising your returns.

Superannuation is a tricky beast. Most of us know that it is a fund for our future but few of us know the intricate details about how it all works. Doing some planning early means that you will avoid some potential traps such as paying too much tax, being inadequately insured or having your superannuation end up in the wrong hands down the track.

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Transferring Property Following the Breakdown of a Relationship

Are you married or in a de facto relationship that has broken down resulting in the need to transfer real estate from one party to another?

Unfortunately marriages and de facto relationships break down all the time. If following such a relationship breakdown a house that is jointly owned needs to be transferred from one party to another as a result of a property settlement, it is important that you have proper legal advice. Under Section 68 of the Duties Act 1997, a property transfer is exempt from stamp duty if the transfer is the result of the breakup of a marriage, de facto relationship or domestic relationship.

There are important technical requirements that need to be complied with to make sure there is no stamp duty on the transaction, which will save you thousands of dollars:

  • If you are married you must have a Financial Agreement in place under the Family Law Act 1975 or some other form of written agreement evidencing the fact that the breakdown of your marriage is irretrievable and you have decided to split the matrimonial assets;
  • If you are in a de facto relationship you must have a Financial Agreement in place under the Family Law Act 1975 or Court Orders such as Consent Orders. Only a family lawyer can prepare these for you;
  • If you are in a domestic relationship you must have Court Orders in place dividing the assets of each party or a Termination Agreement in accordance with the Property (Relationships) Act 1984.

Similar rules apply in the context of transfers of property between married and de facto couples whereby you can obtain a stamp duty exemption if as a result of the transfer the property will be held by the couple as joint tenants or tenants in common and equal shares.

The most common context where this arises is where one party to the relationship already owns real estate before the relationship commences and later wishes to transfer share of the property to their partner.

If you need family law advice or property law advice, contact one of our lawyers today on (02) 4704 9991.

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Section 10 Dismissals

The Daily Telegraph this week ran an article about people who have been charged with various drink driving offences who receive Section 10 dismissals, saying “thousands of people are escaping convictions for drink driving every year”, blaming these statistics on a “legal loophole”.

Unfortunately, this article lacks any true understanding of the legal reasoning behind the concept of Section 10 dismissals and why they exist.

A Section 10 dismissal means that the Court acknowledges that the offence was committed, however in the discretion of the Magistrate decides not to record a conviction because that particular case may have had extenuating circumstances attached to it.

The attitude of the Daily Telegraph seems to be that every person who drinks and drives should be convicted and punished. This concept, similar to mandatory sentencing, has been tried and failed as it does not take into the account that every matter that comes before the Court has with it a unique set of factual circumstances.

Take for example, a person who has been driving for 20 years without a single offence on their record, who is a positive contributor to their community, and an otherwise upstanding citizen. Let’s say they consume two drinks at a bar and believe they are under the threshold to drive, but following a breath test are found to be in the low-range category for drink driving. Imagine further that this person works in a job that requires them to hold a license, and should they lose their license, they will also lose their job. Should this person be so severely punished for what was at worst an error in judgement?

People are not perfect and from time-to-time make mistakes that without the option for discretion on the part of the court system could result in a punishment that is severely disproportionate to the offence they committed.

Our legal system is designed to allow people who are convicted with a criminal offence the opportunity to explain their actions to ensure that more serious offenders are dealt with more harshly than less serious offenders. Section 10 of the Crimes (Sentencing Procedure) Act allows the Court to exercise some discretion in circumstances where members of society who make mistakes deserve a second chance. It can hardly be described as a “legal loophole” which has with it connotations of inadequacy or cheating the system.

For the most part, serious offences are dealt with by the courts in a serious manner. Unfortunately, some journalists latch on to statistical anomalies that do not tell the whole story or outliers that are the inevitable by-product of an imperfect system when reporting on legal matters.

If you have been charged with an offence by police, contact Complete Legal to discuss your options.

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Transferring Property Following the Breakdown of a Relationship

Are you married or in a de facto relationship that has broken down resulting in the need to transfer real estate from one party to another?

Unfortunately marriages and de facto relationships break down all the time. If following such a relationship breakdown a house that is jointly owned needs to be transferred from one party to another as a result of a property settlement, it is important that you have proper legal advice. Under Section 68 of the Duties Act 1997, a property transfer is exempt from stamp duty if the transfer is the result of the breakup of a marriage, de facto relationship or domestic relationship.

There are important technical requirements that need to be complied with to make sure there is no stamp duty on the transaction, which will save you thousands of dollars:

  1. If you are married you must have a Financial Agreement in place under the Family Law Act 1975 or some other form of written agreement evidencing the fact that the breakdown of your marriage is irretrievable and you have decided to split the matrimonial assets;
  2. If you are in a de facto relationship you must have a Financial Agreement in place under the Family Law Act 1975 or Court Orders such as Consent Orders. Only a family lawyer can prepare these for you;
  3. If you are in a domestic relationship you must have Court Orders in place dividing the assets of each party or a Termination Agreement in accordance with the Property (Relationships) Act 1984.

Similar rules apply in the context of transfers of property between married and de facto couples whereby you can obtain a stamp duty exemption if as a result of the transfer the property will be held by the couple as joint tenants or tenants in common and equal shares.

The most common context where this arises is where one party to the relationship already owns real estate before the relationship commences and later wishes to transfer share of the property to their partner.

If you need family law advice or property law advice, contact one of our lawyers today on (02) 4704 9991.

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Family Law Tips

We are excited to announce that the head of our family law team, previously based in Melbourne, has moved back to Sydney! This means that we now have a Sydney based family law lawyer operating out of our Head Office in Penrith.

You can contact us to make an appointment with our family law lawyer at any time on (02) 4704 9991, but in the meantime here are some tips to think about if you are going through a divorce or separation:

  1. Start collecting your financial documents as soon as possible, taking into account everything from savings to assets and superannuation so you can adequately inform your lawyer.
  2. Start to think about what arrangements regarding custody of children are to be made. If your relationship with your ex-partner is amicable and you can reach agreement, then this is always best.
  3. If you feel as though your safety or the safety of your children is at risk, get some advice from the police about a temporary Domestic Violence Protection Order.
  4. Conduct a review of things like your Will, Power of Attorney and the beneficiaries of any superannuation death benefit you have. Often it may be the case that your wishes have changed as your relationship has broken down.
  5. Keep a record of any conversations you have with your ex-partner by writing them down in a diary or notebook if you think you might need to refer to them later.

The most important thing for you to do if you are going through a break up is seek family law advice as soon as possible. Most lawyers can offer you a one-off consultation with them for a reasonable fee so that you can get some advice in relation to your position. It may be the case that your separation is amicable and you are in agreement with your ex-partner about most things – this doesn’t mean you shouldn’t get some family law advice so you are at least aware of your rights.

Our family law services include divorces, property settlements following separation, custody of children and general family law advice. If you would like to make an appointment to meet with our family law lawyer, please contact us by telephone or visit our website at www.completelaw.com.au for our email details.

We understand that any marriage breakdown is emotionally draining on everyone involved. We can help you ease that burden with expert legal advice.

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Negotiating the Terms of a Will

We spent a day this week at the Supreme Court of NSW securing an excellent settlement for three clients in relation to the contents of a deceased person’s Will.

For legal reasons we cannot name our clients, but here is the case study:

  • The deceased person died leaving four natural children and a defacto spouse. Three of his children were from his first marriage and were aged between 40 and 50 years. These three children were our clients.
  • The fourth child was the child of the deceased and his defacto spouse.
  • Under his Will, the deceased left his whole Estate to his defacto spouse, completely disinheriting his children.
  • We acted on behalf of three of his children to obtain a share of the Estate for them on the basis that the Will was not a fair distribution of the deceased’s Estate.
  • The fourth child also made a claim against the Estate, as well as two other plaintiffs who were dependent on the deceased during their lives.
  • All up, there were six plaintiffs all seeking a share from the Estate, and the defacto of the deceased person, who was also named as his Executor.
  • We were able to obtain approximately 25% of the Estate for our clients on the basis that the deceased should have left a share of his Estate to the children of his first marriage, not just his second wife.
  • Settlements were also reached in relation to the other three plaintiffs to ensure that legal costs did not get out of control, and that the beneficiaries of the Estate received their share without having to spend it all on lawyers.

If you have been completely left out of a Will, or if you have been included in a Will but do not believe that you have received your fair share, you may be entitled to more. Unfortunately, sometimes when people write their Wills they may be affected by illness, an emotional situation such as a family dispute, or could be influenced by other people which results in an unfair distribution of their estate.

There is no shame in seeking some advice about what you may or may not be entitled to. For an obligation free consultation please contact us today on (02) 4704 9991.

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Royal Commissions

Prime Minister Malcolm Turnbull has announced a Royal Commission into allegations of the abuse of minors held in detention. The announcement follows the broadcast of a program on ABC’s Four Corners depicting teenagers in a youth detention centre in the Northern Territory being mentally and physically abused, shackled to chairs, stripped naked, locked in isolation, and even subjected to tear gas.

As the national reels following these horrifying revelations, it is a disturbingly familiar feeling of shock and surprise. How could this type of thing be happening in a modern age right under our noses?

A similar furore surrounded the recent and ongoing Royal Commission into institutional responses to child sexual abuse, which in a large part focussed on Churches and abusive members of the clergy.

So what is a Royal Commission, and why has the Prime Minister taken this action?

A Royal Commission is similar to a Court case, but takes a form of a Public Inquiry whereby a Commissioner is appointed to thoroughly investigate and report on the issue at hand. For example, the child abuse Royal Commission set up in 2013 was armed with the task of investigating allegations of child sexual abuse in schools, Churches and other institutions, including organisations like the Salvation Army, YMCA NSW, Scouts Australia and other institutions.

A Royal Commission has the power to force a person to appear before the Commission at a hearing to give evidence or to produce documents, and the Commissioner and his or her legal representatives can question and examine such people like what would occur during cross examination in a Court case. The Commission can also issue search warrants via the AFP, and invite members of the public to give evidence of their experiences in relation to the issue in question.

Following the conclusion of the Commission, a report is provided to the government. Whilst the recommendations of the Commission are not necessarily binding, it is quite common that a government will enact most of these recommendations into law.

Such a Commission can also result in criminal charges being brought against parties who are found to have committed crimes such as child sexual abuse, or in the case of this most recent Royal Commission to come, physical and mental abuse of children in detention that may be outside the scope of the discipline allowed in such youth detention centres.

In summary, a Royal Commission is a means by which the government can publically shine the spotlight on every deep dark corner of an organisation, entity or people who may be involved in conduct that is contrary to the public interest.

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Selling Your House

As I mentioned in last week’s article, I have been on the open home circuit searching for a property to buy. Having looked at many properties and many Contracts over the past couple of months, here are five tips that people often forget when taking their property to market:

  1. Illegal/unapproved building work.
    Any solicitor who is acting for a purchaser will ask you about any work that you have completed that was not approved by Council. If you know you have done work that was not approved, disclose it in your Contract so a purchaser cannot complain about it.
  2. Be prepared for the pest and building report.
    When a buyer buys a property they take it as it is. This means that any negotiations as to the property’s condition happen before the cooling off period expires. The purchaser will get a pest and building report and it will reveal problems. You might consider conducting your own pest and building report so you are aware of what might come up and so you can rectify any issues before your property goes to market.
  3. Cleanliness.
    A seller is required to give a purchaser a property at settlement in the same or similar condition as it was when it was first inspected. Despite this I often deal with outraged purchasers who aren’t happy with the state of cleanliness of a property at settlement. To avoid any unnecessary delays at settlement, keep the lawns mowed and the house clean so your buyer has nothing to complain about.
  4. Utilise your agent.
    This isn’t so much a legal suggestion but an important one. Agents are critical in the sales process. They are in a unique position to be able to speak to both seller and buyer. Tell your agent you are happy to have a meet and greet with the buyer before settlement to provide them with any copies of any documents you have such as warranties for appliances and share with them any expert knowledge you have about the property for example how to work the air conditioning system or reset the codes for the alarm.