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A life cut short. Lives changed forever.

This is not our story. It’s the real-life story about the clients of an interstate advisor. It’s a story that is both tragic and confronting, but a story that clearly demonstrates the importance of having a Will and financial instructions in place – because unexpected can and does happen. This adaptation is courtesy of Estate Planning for Life (www.estateplanningforlife.com.au), a process of advice we are very committed to at The Peak Partnership.

Dave owned a small electrical contracting company and had around $40,000 owed to him by clients. Never one to stress about things, Dave had no Will or Power of Attorney in place, hadn’t lodged personal or corporate tax returns in over two years and hadn’t lodge a BAS (GST) return in more than 12 months.

Dave owed his father $25,000 that had been spent renovating Dave’s house (with no written agreement), as well as $15,000 to suppliers and $15,000 in GST. Dave also had a $242,000 mortgage.

Dave had recently met Jane on a cruise, declaring to family as “the love of my life”. Jane resigned from her job on the ship to live with Dave, seeking work in “hospitality onshore” as she put it. Three weeks later on a Sunday afternoon on the local lake, Dave dived off a boat into the water and didn’t resurface. It took 12 hours to find his body.

Patrick and Simone, Dave’s parents, were understandably in shock. They knew he didn’t have a Will, but didn’t understand what that meant for them as “default” executors of his estate. A quick call to their financial adviser (me) put them in touch with a lawyer who started the legal process.

Their first task was to bury their son. However Jane, still in shock herself, barred their way for several days “...no, you can’t come into our home...we were going to be married!...”

Patrick and Simone now became concerned they were in some sort of family court dispute. All they wanted was clothes in which to bury their son. What were Jane’s rights? Did she have a legitimate claim to his house and assets? How were they to handle this when they hadn’t even buried Dave yet? Patrick and Simone were forced to seek legal advice about family court matters only two days after they first heard of Dave’s death.

A day or two later Jane relented and allowed Patrick and Simone access to Dave’s clothes and he was buried gracefully. Jane, in genuine shock, sought counselling and left Dave’s house after a few weeks into the care of her own family. However, the nightmare had only just begun for Patrick and Simone as they sorted through Dave’s affairs:

  • Without any Will, a solicitor had to write to all local law firms and advertise in the media to allow all potential claimants to register an interest.
  • With no Will ultimately found, Patrick and Simone needed to be appointed, via Letters of Administration, to take control of their son’s estate. This meant they were legally responsible for calling in all Dave’s assets and paying his debts.
  • All banks, creditors and suppliers had to be contacted and individual arrangements negotiated. All Dave’s business paperwork had to be found, sorted and reviewed before being given to his accountant to prepare the out-of-date GST and tax returns – both personal and business.
  • Personal bills had to be identified and some paid quickly such as funeral expenses, electricity, gas, registration and general insurances just to keep the house and car functional.
  • Superannuation funds had to be contacted and life insurance proceeds claimed.
  • The house had to be cleaned after Jane left, some kitchen renovations finished and then the house rented out, while Dave’s truck and some tools had to be sold.

With a lot of help from their financial advisor arranging a raft of genuinely caring accountants, lawyers, creditors, bankers etc the issues were dealt with one-by-one over an 18 month period. For a while it looked like the ATO was going to force Patrick and Simone to sell Dave’s home at a fire sale value. Luckily an accountant negotiated a good outcome at the last minute.

Had any of the creditors or banks been difficult then a horrible situation would have turned into a genuine nightmare for Patrick and Simone. As Administrators (ie. executors) of Dave’s estate they were constantly worried that a new creditor would turn up or an existing creditor would turn nasty and they would be dragged into a legal battle or some other fresh hell.

All of these matters dragged on for months. Every day Dave’s paperwork was sitting on the kitchen table – a constant reminder. Patrick and Simone suffered depression and had to seek professional counselling as their marriage came under extreme pressure. Ultimately the marriage survived as both are genuine people with deep love for each other.

The worst aspect of this entire experience was the fact that Patrick and Simone were never allowed to properly grieve for their son. They couldn’t close the book on Dave’s life. His affairs remained with them as an open wound for more than 18 months. This was Dave’s legacy. Every wonderful memory they had was tainted by the burden they carried for many years after his estate was finalised.

If you don't want to leave your loved ones with a financial and administrative burden once you're not around, Brad Roberts here at The Peak Partnership is happy to help you with some ADVICE. CLARITY. DIRECTION

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