23 August 2021 to 29 August 2021 is ‘Wills Week’ and a timely reminder to anyone who needs to update their estate plan. 

1. What documents are included in my estate plan?

Your estate plan includes more than just your Will.  It also includes:

• Enduring Power of Attorney – who is appointed to make decisions on your behalf in the event you become incapable to make those decisions;

• Advance Health Directive – who is appointed to make specific medical decision on your behalf;

• Death Benefit Nominations for your superannuation;

• Statement of Wishes;

• List of Specific Gifts;

• Digital Asset Register;

• Trust Deeds and Deeds of Variation;

• Business Succession documents.

2. When should I update my estate plan?

While we future-proof your estate plan as much as possible when drafting, circumstances change and it is important to review your estate plan every 3-5 years.  Your estate plan should also be reviewed when specific events occur, including the following:

1. If you have a significant change in your assets.

You may have left a specific gift (particularly real estate) of one asset to a beneficiary and you have since sold that asset.  You may have new companies or family trusts and need to deal with the gifting of shares or control of the trusts in your Will.

2. Significant change in your personal and family circumstances. 

There may be new children or grandchildren that you want to include.  You may need to update your enduring power of attorney so that your attorney can provide benefits for the needs of your new child.

A beneficiary may have passed away or no longer be part of the family through divorce.  One beneficiary’s needs might have changed meaning they need a greater share of the estate.

3. Change in your relationship, including marriage, divorce or separation. 

It is important to note that divorce can render certain clauses invalid.  Marriage can revoke part of a Will, unless your current husband/wife is your executor and beneficiary or unless your Will states that it was made in contemplation of your marriage.  This can lead to parts of your Will being valid and other parts subject to the rules of intestacy. 

Separation does not revoke your Will.  Parties need to wait 12 months from separation before they can file for divorce.  It is particularly important on separation to update your estate plan to ensure your former spouse does not remain your attorney, executor or beneficiary.

4. Changes to your attorney or executor. 

Acting as attorney or executor can be an onerous task.  It may be that your attorney or executor is no longer suitable for or willing to undertake the role.  Has your estate become more complex? Have the circumstances of your executor changed, such as health circumstances or a job with significant travel?

5. Lapsing nominations

Superannuation is treated differently from the rest of your estate.  You can specify how your death benefits are to be distributed on your death through ‘death benefit nominations’.  Depending on your superannuation fund, some nominations lapse every three years.  It is therefore essential to update your nominations regularly to ensure they remain in effect and do not expire.

3. Do I need to prepare a whole new Will?

Sometimes it may be necessary to complete a new Will which has the effect of revoking any previous Will you have made.  If the change is only minor you can execute a Codicil, which is a separate document that either adds extra clauses or changes existing clauses in your current Will.  It is important that you do not make any handwritten amendments to your Will which could invalidate the document.

A valid and up-to-date estate plan is an investment for your future.  It ensures that your wishes can be carried into effect and that your proposed beneficiaries are able to receive the distributions you have provided for them.  This also makes it easier for your attorneys and executors and can make the administration of your estate smooth and cost-effective.

We would be delighted to assist you updating your estate plan.  Please email Lauren Nolan at lauren.nolan@perspectivelaw.com if you have any questions.

Now a “Who’s Who” in the contract clause “zoo” would be incomplete without a quick coverage of the other big addition to most residential sale contracts. The “peas” to the finance conditions metaphorical “carrots” if you will. Of course, I am referring to the Building and Pest condition, or Clause 4. Similar to the Finance condition, the contract being subject to the results of Building and Pest inspections is dependent on the inspection dates being completed in the reference schedule. Clause 4.1 requires the buyer to obtain a written report from a building inspector (and pest inspector, although often they are in the same report) on terms satisfactory to the Buyer. The Buyer is required again to act reasonably, but subject to this requirement, may terminate the contract should the report be unsatisfactory. A few points to note on this. Unlike some other contract forms (read: the ADL sale contract) the REIQ sale contract does not require the provision of the report in order to activate any purported termination by the Buyer. However, it should be noted that if the seller actively requests the report, it is required to be provided to them.

The second noteworthy issue with the Building and Pest clause that deserves mention, and indeed, another point of difference between these two contracts is their approach to white ants. With ADL contracts, the risk of white ants is insufficient to terminate the contract. The REIQ version however is silent on this point, the suggestion being that a buyer acting reasonably, may be able to terminate on the same grounds. Another issue that often arises is the Building Approvals, or rather, the lack of building approvals. It is important to note that as a general rule, finding out that a property contains unapproved structures (for example, a shed without the appropriate council approvals) will not be grounds to terminate under the Building and Pest condition. Whilst I have seen some exception to this where a very diligent building inspector (already, you can see the rare terrain we are navigating here) has raised this in their building report, this is often not the case. Even raised under the report, grounds for termination as a result of the note is tenuous at best. The better option to avoid disappointment, and potentially costly litigation, would be to include a separate condition making the contract subject to an inspection of the council records (otherwise known as a “due diligence” clause).

Notwithstanding the above distinctions, it is clear that a recurrent thread bleeds through both the Finance and the Building and Pest clause, and that is the overarching requirement to act reasonably or in good faith. Neither of these clauses should be used as a veritable ‘wild card’ to escape your contractual obligations.

Finally, in the new age where Electronic Conveyancing or PEXA is fast becoming the platform of choice for effecting settlements (every solicitor’s dream), one cannot look past the clause that makes it all possible, Clause 11 or the Electronic Settlement Clause. As I promised brevity at the start (and am fast approaching a word length that really blows that promise out of the water) I will refer you to my learned colleague’s detailed article on PEXA that you can read on our Blog. But for now, I will say this. PEXA has a host of amazing benefits not the least of which include:

1. No need to sign paper documents including a Transfer;
2. Faster access to your funds,
3. Instantaneous (or veritably instantaneous) lodgment of documents;
4. Minimal paperwork;
5. No bank cheques (my personal favourite); and
6. All completed online (in a post-COVID world, a true blessing).

In an increasingly uncertain time, it is important to insert some stability in your life where you can. How can this be achieved you ask? First and foremost, ensuring you are using a contract that provides for Electronic Conveyancing platforms. In the REIQ sale contract, that is covered in Clause 11. However, as with everything in Law, this is not the end of the story. Clause 11 provides that reliance can only be activated, by agreement between all parties: that is, buyers, sellers and both banks, where required. This means that in order to take advantage of this great platform, you need to ensure agreement can be guaranteed. To achieve this end, I recommend including a special condition that mandates the operation of clause 11. Of course, this is only recommended where you know your solicitor and bank can comply with such a requirement.

The second point worth noting in relation to Clause 11 is the waiver at 11.5 which allows a party to withdraw from the Electronic Settlement with 5 Business days notice to the other party. Obviously, this can be incredibly inconvenient and costly, especially close to settlement. To avoid this last-minute change (and cost) I recommend including in your special condition, a clause to remove the application of this provision from the contract.

At Perspective Law, we understand the importance of contract review prior to signing. This will give you the opportunity to discuss anything that might be of concern at the property. The standard contract clauses are incredibly beneficial, especially to the buyer. But as I hope this article has shown, Law is a fickle mistress. What may work well for one situation, may not be suitable for you. Perspective Law takes a horses-for-courses approach. We tailor the solutions to suit your problems and approach each matter as if it where our own. If you need any assistance regarding REIQ contracts, feel free to email us at Katherine.blood@perspectivelaw.com.

You may have heard of the term “PEXA” hovering in recent news or in the Australian Financial Review, specifically as the PEXA Group Ltd went public in an IPO on 1 July 2021. So, what exactly is PEXA, how does it work, and why does it matter to you where you are looking to sign a contract to buy or sell a property?

The What…

The PEXA Group Ltd provides the service of the same name, which stands for Property Exchange Australia, and was developed to serve as an electronic platform for a property transaction in Australia.

The first transaction via PEXA was in November 2014 and while it took time for property lawyers and conveyancers to learn the new process,  in 2021 most firms and banks in Australia now use PEXA as the preferred method for property transactions.

In NSW, the usage of PEXA has been mandatory for all property transactions since 2019, and it is expected that the rest of Australia will grow more into e-settlements in the future.

The Why…

1. Convenience – transactions online have obvious conveniences over the traditional settlement requiring hand signed papers, cheques and postage. The parties are no longer required to meet in person on the settlement date to exchange documents and therefore the transaction is much less susceptible to delays for unexpected events (such as lockdowns or indoor restrictions in this current pandemic).

Electronic payments on the day of the settlement, also means that the settlement funds will clear faster, compared to depositing bank cheques which may take up to 3 business days to clear.

2. Accuracy – In PEXA, all parties are in one electronic platform, including the buyer, the seller, incoming and outgoing banks, where all parties can see visually the progress of the transaction and the next steps. In our experience, this availability of information and transaction status, decreases the risk of errors or miscommunication between parties and potential delays. All communications are through the platform, so messages through phone calls or emails do not get missed and parties are all given live information immediately.

3. Costs – while PEXA has fees associated with its service ($117.92 for Transfers as of 1 July 2021), in our view, this fee easily offsets the usual costs associated with traditional settlements including, fees for settlement agents, postage and administrative work, associated with preparing cheques and paper documents.

The How…

In states where PEXA is not mandatory (including Queensland), a property transaction can only occur via PEXA if all parties in association with the transaction agree to use and are registered to use PEXA (or has an agent that is registered). If your lawyer appointed for your property transaction is registered with PEXA, they will first confirm with you whether you are agreeable to proceed with an electronic transaction.

If having your property transaction proceed via PEXA is necessary because of a remote location of a party, you should request your lawyer or the  estate agent insert into the Contract,  a special condition requiring that PEXA must be used. This will ensure that all parties can only engage firms that can use the platform.

Perspective Law is one of the earliest users of PEXA in Queensland and we have highly experienced lawyers that will be able to assist you in your property transactions. If you would like to enquire about a potential property contract or have any questions about PEXA, please do not hesitate to contact our office on (07) 3839 7555.