Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Where there isn’t a will, then court is often the way
A father’s failure to write a will has triggered an expensive legal battle over the ownership of his prized collection of prestige cars, including a $250,000 Rolls-Royce Ghost.
Lawyers warn the case highlights the importance of carefully planning a will with expert guidance to avoid confusion, delays in distributing an estate and family fights, particularly where there are children from multiple marriages.
Andrew Meiliunas, an associate director from the legal firm Nevett Ford, says: “An expertly drafted will allows you to specify how your property and assets should be distributed after your death. You can also minimise disputes while ensuring that your final wishes are honoured.”
According to the Australian Law Reform Commission, nearly six-in-ten eligible Australians, or around 12 million, have not made a will.
But even where there is a will the number of disputes over the past decade is estimated to have increased by about 25 per cent, with about one in ten likely to be legally contested, according to analysis.
Reasons range from outdated wills failing to take account of marriages or new relationships, through to family provision claims alleging a family member was not provided for, or that the distribution was unfair.
In addition to the costs, which can involve around $8000 to $12,000 a day for senior counsel to appear in court, the actions can often take years to resolve and cause bitter family divisions.
Nicola Stagliano, the owner of the cars, died in September 2019 without guidance about how his multi-million-dollar estate was to be bequeathed between his wife, Patricia, and five adult children from two marriages.
In addition to the Rolls Royce, there were a 2015 Ferrari California T valued at $220,000; a 2010 Bentley Continental valued at $80,000; a 2015 Mercedes GL350 valued at $58,000; and a 2009 Mercedes SL 350 valued at $30,000.
The Rolls-Royce Ghost, Bentley Continental Coupe and 2015 Ferrari were kept at the family home and rarely used, the court was told. They were also not comprehensively insured, which they would have been if used commercially, the court heard.
The dispute between the will’s administrator – who is appointed by a court when someone dies intestate – also involved $2 million in real estate, three bank accounts, around $733,000 worth of shares in a company, and about $1.4 million in a family trust.
The Victorian Supreme Court had to consider two questions – whether a luxury car collection should be considered “personal chattels” or part of his business, and a technical question relating to the family trust.
Barrister Giles Stapleton of Selborne Chambers and Family Law Chambers in Sydney says in the absence of clear instructions from a will, a court will forensically analyse evidence to establish the facts.
Stapleton says: “The message is, can (the person bringing the action) assert a particular use based on belief. The judge will look at all the facts to ensure the classification or characteristics of the asset is correctly analysed.”
Justice Claire Harris told the court that Nicola had a “love of cars, that he raced them, worked with them as a mechanic, and frequently bought and sold them during the 1960s and 1970s”. But the five cars in dispute had been bought in the five years to July 2019.
“The effect of the evidence as a whole is most consistent with them not having been used for business purposes,” Justice Harris told the court.
The critical question of how the cars might be distributed between the family members was not addressed.
“The cost of this legal action would have run into possibly hundreds of thousands of dollars and would have largely been avoided if Mr Stagliano had a Will,” Meiliunas says.
Lawyers warn the increase in court disputes underlines the need to develop an inheritance plan that specifies final intentions, avoids ambiguities and narrows the potential grounds for legal actions.
Measures they recommend include:
• Have a written Will that is based upon an accurate assessment of the family and financial situation. It needs to list all assets and beneficiaries. Seeking legal advice is essential. The original Will should be lodged with a solicitor for safekeeping. A few thousand dollars in legal fees could save massive litigation costs.
• Are assets to be preserved or sold for the benefit of others such as children from a first marriage? Is there a risk that a second spouse will squander the estate by selling property and shares or spending the cash during their lifetimes? The court will look for evidence of intention, such as written instructions, if there is a dispute.
• Appoint a power of attorney (POA) to help arrange and undertake financial management. A power of attorney is a legal document allowing another person authority over decisions if the principal is incapable or too busy. It is important to specify the scope of powers. In some cases, appointing two attorneys can provide additional security by providing a check and balance.
• Consider an advance care directive that specifies limits if the principal is too sick to communicate decisions about care and treatment.
• Wills need to be constantly updated to reflect changing circumstances, particularly if there has been a divorce or separation.
• Ensure there is someone to help deal with complex financial or legal arrangements such as trusts or multi-asset investment portfolios.
• Have a strategy in place to deal with disappointed beneficiaries.
• Don’t sign any documents without getting professional advice.
