To help you nominate the right person, here’s a rundown of what a Will executor’s tasks include.

What do executors of Wills do?

The executor of a Will has to:

• Administer your estate after you pass away
• Ensure all debts are paid
• Close your accounts
• Oversee the disbursement of inheritances in accordance with your wishes

It is also usually the executor’s job to arrange your funeral. They can use funds from your estate to pay for it.

The Will executor may need to go through the process of probate. This is a court order granted by the Supreme Court of Queensland that confirms:

• the Will is valid
• the executor has permission to distribute the estate

Probate is usually required if you leave behind property and a substantial amount of money. Grants of probate usually take around 20 business days and the process includes:

• gathering supporting documents such as an affidavit
• publishing a probate notice
• waiting 14 days
• submitting a probate application
• responding to Requisitions from the court.

After probate is confirmed, the person responsible for executing your final wishes and finalising your estate will have to answer the following questions:

• What do you wish to happen to your remains?
• Who needs to be notified about your passing?
• What will happen to your property and belongings?
• Who is entitled to what percentage of the money that comes from the sale of property and other assets / who are the will’s beneficiaries?
• How will belongings and funds be distributed?

Your executor will ideally have access to your accounts after you pass away. If you have a list of providers for them to get in touch with, they will find the process much easier. Consider your:

• Phone and internet provider
• Gas/electricity provider
• Insurance providers
• Subscriptions (e.g. Netflix etc)
• Gym memberships
• Housekeeping services etc

Think about bank, superannuation and investment accounts as well; it can take a long time for your executor to access accounts (executors generally can only access your bank accounts once probate has been granted by the Court.)

Ask your lawyer to hold onto these details for safekeeping.

Who should execute your Will?

Being executor of a Will can be stressful and time-consuming. When you nominate someone, keep this in mind.

Most people choose a family member or trusted friend. Sometimes, two people are nominated, either to execute the Will together or as an alternative if the first choice is unavailable or incapable of taking on the responsibility.

Often, siblings are nominated as joint executors. This can help ensure everything is kept ‘fair’ during the Will execution process.

Some things to consider include:

• You can nominate someone who is a beneficiary
• You can add a clause to your Will to ensure your executor is compensated for their time and efforts
• If you appoint joint executors, make sure they are able to work well together
• You can nominate a lawyer or trustee instead of a family member. Usually, payment for their services will come out of your estate but make this clear when you ask them to act as executor, so they don’t come up against pushback from your family.

If you do nominate a family member, they can work in conjunction with a solicitor to ensure they get everything right.

Make your executor’s life easy

A rushed or unclear Will can make things very difficult for an executor. The more questions you can clearly answer in your Will, the better.

Write down your wishes in a formal Will, store relevant information safely with a lawyer and have everything prepared formally and correctly so you don’t create unnecessary stress for your executor when the time comes.

The right approach to Wills and executors will give you and your family peace of mind. Reach out to Legal Affairs Lounge to start preparing your will today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

Here is an explainer, as shared by a Legal Affairs Business Lawyer.

What is a Director Penalty Notice (DPN)?

A director penalty notice is issued by the Australian Taxation Office (ATO) to the director of a business that has failed to pay its tax bill (usually three months or more after the due date) or has not filled out the business’ Business Activity Statement (BAS) on time.

The DPN will tell the business director how much is owed and provide available payment options or other methods to resolve the matter.

It will also outline a new timeline for making repayments. Generally, it will present you with one of two conditions:

• A lockdown DPN: This will make you, as the Director, immediately financially responsible for repayment.
• A set time period to repay: In this instance, the most common time period is 21 days to make the relevant repayments.

What makes a DPN different and extremely important for company directors to know about is that it makes the director directly responsible for tax liabilities. That means that you, as the director, have to find the money or you will face consequences. The notice is arranged this way to ensure that company directors don’t simply dissolve companies to avoid tax debts.

You should also take note that a DPN is valid from the time it is delivered to either the registered business address of your company or your residential address. If you have recently moved, it makes no difference, the date it arrives at your previous address still stands.

Even if you are a former director and have left the company with the overdue tax debt, you could still be liable for the repayments. As a new director who has been in the role for more than 30 days, you may also be held personally responsible for unpaid tax money.

How to deal with a DPN

If you have received a DPN, don’t panic. There are still ways to resolve it.

The first and most obvious is to pay the debt in full, straight away. Maybe you just didn’t get around to paying the bill, or it got lost in a pile of paperwork. Pay it off ASAP and you can move on.

If it’s not feasible to pay the whole bill in one go, contact the ATO right away or ask your Legal Affairs business lawyer to do so on your behalf. More often than not, the tax office will allow you to pay the bill over time using an instalment plan. But before you do, you must get expert advice. If you enter a payment plan, your personal liability does not go away and there will be serious consequences if you chose this path and can’t meet the payment obligations.

Your other options are to:

• Put your company into administration or liquidation
• Work with a professional to restructure your business.
• Present the ATO with a valid reason for late payment

If you can convince the ATO that you had legitimate reasons for failing to pay, like serious illness or some other unavoidable issue, they might relax the DPN. You will still need to pay the money owed at some stage, though.

If you don’t take any of the steps above, you will become personally liable to repay the amount owed in full, and unfortunately, time is not on your side.

When it comes to DPNs, prevention is always better than cure. If you have a good accountant and bookkeeper, they should be able to help you ensure your tax-relevant payments are up to date.

What to do if you receive a DPN

The most important thing to do if you receive a DPN is to act quickly.

Get your paperwork in order as much as you can, then contact your Legal Affairs business lawyer and accountant as soon as possible. They will sit down with you to help work out the most suitable solution.

Need to know more about DPNs? Contact a Legal Affairs business lawyer today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

Many business owners assume that becoming insolvent means liquidating. When this happens, a liquidator is appointed to sell off assets and repay debt, and the company must stop trading while this all takes place.

The good news is there are alternatives, and you can solve insolvency without liquidating. Here’s a rundown of your different options to resolve your situation and stay in business.

Pay your creditors

If you have fallen behind but the business is turning around, you may be able to arrange to repay the providers you owe money to. You could take out a loan or you may be able to negotiate a payment plan with the tax office (be aware you may be charged interest on your tax debt).

With the tax office, it’s essential you reach out and set up a payment plan before you start receiving penalty notices as a result of not paying your bills.

If you decide to take out a loan to repay your creditors, make sure you can make the repayments before you commit. You may be able to secure the loan against some assets, which will minimise the risk for both you and the lender.

Find a way to consolidate your debt

Speaking of loans, if you have several different accounts and credit cards that are overdue, a loan from the bank or another lender may make everything more manageable and lighten the load thanks to a lower interest rate. This might be a good time to review your current credit situation with a finance broker.

Raise capital

If an injection of funds will put things on the right track, you may be able to ‘lend’ to the business from your personal funds or find an investor who is willing to contribute financially in return for part-ownership or other compensation.

With this being said, you need to have confidence that you’re not just digging a deeper hole for yourself. Work with your accountant and financial planners to do some forecasting so you have an idea of what’s actually possible.

Did you know Apple was on the brink of bankruptcy at one stage? It was Microsoft that saved the day, by investing quite a few million.

Review your income and expenses 

It is very easy to say ‘just earn more money’ but a lot less simple to do so. However, with a combination of strategy, great people, good market knowledge and a product or service people want, you can reinvent your business model and get back on top.

You may need to do some deep diving into your finances to figure out what has gone wrong. There could be expenses you can eliminate, and you might have to let some people go but recovery is never impossible. Sometimes growing the business is not profitably and scaling back will help increase profits.

Marvel was in a terrible position in the late 1990s before it started making movies off the back of its popular comic book titles. Its partnership with Disney means it’s one of the most successful brands in the world.

Find a buyer

Many brands avoid going from insolvency to liquidation by selling to a larger company. This may be an option, especially if you have IP or products that are in demand.

If you decide to sell to cover the cost of your debts, you don’t necessarily have to do so at a ‘bargain basement’ price. Work with a legal and accounting team so you sell for fair value and do so in accordance with the law.

The benefit of selling your business is being able to repay your debts while your staff keep their jobs. The purchaser will take the responsibility of restoring client relationships and getting cash flow back in shape.

Make sure you discuss your Capital Gains implications with your accountant prior to any sale.

Solving insolvency without liquidating

The best thing to do if you’re facing overwhelming business debt is to get the advice of a professional. A specialist insolvency lawyer can help you explore every option, make the right decisions and come up with a plan so you can side-step liquidation.

Need help to make a call around insolvency and liquidation? Reach out to Legal Affairs Lounge today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

Take a look at some of the options and steps involved with the insolvency process if you are a business.

How do you know if you are insolvent?

The signs you are insolvent are:

• If the number of overdue bills keeps building rather than dropping
• If the total of your business debts is higher than the value of the assets, you own
• If your sales figures and profits have been on a downward trend
• If you don’t have the cash flow to cover your regular expenses
• Your financial team is continually receiving phone calls and letters of demand from creditors

In some circumstances, multiple creditors may take action against a company that doesn’t repay its debts. This can result in what’s known as compulsory liquidation — and an order is issued by the court as a result of the creditors’ actions.

Otherwise, the company’s directors can start the insolvency process themselves, if they feel they need help to take stock of the situation and bring things under control.

Being insolvent doesn’t necessarily mean the end of the business. The first and most important step is to engage a team of legal professionals who are experienced in insolvency and can guide business directors through the process. Once someone is on board to help with the relevant steps and paperwork, here are the potential steps to move through:

Voluntary Administration

When a company goes into voluntary administration, the directors hand control to external administrators who start investigating financial details and working out how to deal with creditors. These experts are sometimes referred to as insolvency practitioners or receivers.

The company can continue trading during this time but there has to be a formal admission to the Australian Securities and Investments Commission, which will make a note that the company is in administration.

Once the administrators have completed their investigation, there will be a clearer picture of whether it is possible to pay creditors and move forward, or if liquidation is the best next step.

Receivership

If debts can be restructured, payment plans can be arranged and assets sold in order to pay off the creditors, or if the company can be acquired by another entity, it may be possible to get back on track and continue trading.

In these circumstances, a receiver is appointed to oversee the management of assets, potentially restructure the company and help take care of financial obligations.

Liquidation

The insolvency professionals you work with may determine liquidation as the best course of action if there is no way to escape the financial difficulties the business is facing.

Liquidation is also referred to as “winding up”. As part of this, items of value (assets) are sold to help repay debts, the company is closed, and it stops trading.

How to recover from insolvency

Recovering from insolvency is possible and many Australian companies have been able to do so. A positive outcome often depends on taking action sooner rather than later.

To avoid the threat of insolvency, careful financial management and a monetary ‘safety net’ are essential. It makes sense to work with a good accountant so you can be aware of spiralling costs before they are out of control.

Would you like more information about the steps to insolvency, contact Legal Affairs Lounge today to discuss your options.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

If someone close to you has died and you believe the Will to be unfair, there may be legal steps you can take to claim money or assets from the estate that you are entitled to.

To find out how to dispute a Will, the first step is to find a legal professional who specialises in this area and believes you have a case. There are specific scenarios under which you may be entitled to a share of a deceased person’s estate.

Take a look at some tips and information from our Legal Affairs Wills specialists:

When can you dispute a Will?

The first step is determining if you are eligible to make a claim. Legal Affairs Lounge Will and Estate Lawyers may advise you to proceed with your claim if:

• It has been less than twelve months since the person passed away.
• You believe the testator (the person who made the Will) did not have the mental capacity to understand what they were doing when they made the Will (you are likely to need medical records to help prove this).
• You believe someone has exerted pressure on the testator to make a Will that was not in their best interests.
• You believe the Will is not valid because it has been forged, or someone has lied to the testator about the contents of the Will.
• You believe the testator did not understand or approve of the contents of the Will.
• You are a close relative of the deceased such as a sibling, parent or child, or you are related to them by marriage.
• You are a grandchild of the deceased and you were dependent on them.
• You have a relationship of significance with the deceased such as a de facto partnership.
• The Will was not signed correctly or was not documented property (e.g. nobody has witnessed the Will being signed)

The steps to dispute a Will

If you want to dispute a Will in Australia and you have professional advice saying your claim is valid, you’ll need to follow some specific steps.

First, you’ll need your lawyer’s help to file a family provision application with the court.

Next, you’ll need to attend a directions hearing.

After that, there will be mediation between you and/or your representative, and the Will’s executor.

If the issue cannot be resolved through mediation, you may need to go to court, where a decision will be applied that reflects the laws around Wills and estates.

Finally, if the dispute is not resolved after the above steps, you have the option to appeal the decision.

The above may sound simple but it will take a lot of work to prepare your notice of objection and be ready for hearings.

If your matter does reach court, the decision will be based on factors including:

• Whether or not the Will is ‘fair’
• If it is reasonable to assume you should have been provided for in the Will
• The intentions of the testator and their mental capacity at the time the Will was created
• The level to which you were dependent on the deceased
• The evidence you are able to provide to back up your claims

It’s important to have a good Wills and Estate lawyer when you’re disputing a Will, because the process is complex. An experienced lawyer will be able to help you navigate the process and give you the best chance of success.

Before you decide to proceed, you need to weigh up whether the cost of disputing the Will could outweigh the funds you receive at the end of the process (*sometimes the estate will pay your legal costs). Ideally, you will be able to settle with the other beneficiaries or the executor via mediation rather than going to court. This will allow you to reach an outcome that suits everyone, rather than a verdict being handed down by a judge.

If you’re thinking of disputing a Will and you’re based on the Legal Affairs , contact Legal Affairs Lounge today to discuss your options.

Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

However, with the severe impacts of COVID diminishing, the Australian Tax Office is taking steps to start reducing the many billions (yes, billions) of dollars in tax debt. It will be looking to individuals, corporations and small businesses to recoup outstanding amounts.

As part of this, major credit reporting agencies have signed agreements with the ATO. The result of these agreements is that companies including CreditorWatch and Equifax will now be able to access and report tax default data.

What this means

Credit reporting companies are relied on by mortgage brokers and lending institutions like banks who want to assess an individual or business’s suitability for a loan.

These companies keep a ‘score’ on consumers and businesses, based on the amounts they owe, how many bills they have overdue and how often they make payments. When you apply for a loan, your credit score factors into the decision.

In the past, tax debt has not been included in credit scores. But this has now changed.

If you are a business owner who:

• Owes more than $100,000 in tax
• Has owed this amount for more than 90 days
• Is not engaging with the ATO to manage your tax debt
• Doesn’t have an active complaint with the Inspector-General of Taxation Ombudsman (IGTO)

It’s more than likely that lenders will be notified when you apply for a loan.

The types of business tax debt that will be captured into the tax debt disclosure threshold include:

• Income tax debts
• Activity statement debts
• Superannuation debts
• Fringe benefit debt
• Penalties and interest charges

As shared by Accountants Daily, “Equifax’s general manager commercial and property services Scott Mason said the data would be incredibly valuable to customers because tax debts were often the last “bill” that businesses paid.”

He added that, “Understanding a company’s tax information is a vital piece of the puzzle for organisations wanting to manage their credit risk in relation to new and existing customers.”

It does make sense for lenders to have access to a complete picture of existing debt when it comes to approving loans. Being better informed will reduce the risk of defaults and businesses ending up in additional financial strife.

What to do next

If your business has an outstanding tax debt of over $100,000 and you have been investigating the possibility of a loan, there are a few steps you can take.

If the amount you owe can’t be changed, you’ll need to engage with the ATO to work out a payment plan. Legal Affairs Lounge can negotiate this arrangement for you.  Having a plan in place will prevent the ATO from repeatedly following up with you, and you won’t end up with a default on your credit score.

Often, the ATO will treat tax debt like a loan. It will charge interest but be ok with you making monthly repayments. The challenge for you as a business owner is ensuring you’re not ‘kicking the can down the road’ and accumulating more tax debt while you try to pay off the outstanding amount. Again, having a good accountant can help you avoid this problem.

If your tax debt is out of control, you may need to investigate a restructure. The team at Legal Affairs Lounge can help you figure out the best way to reshape your business so your creditors are satisfied and you can continue to operate.

Don’t let tax debt impact your business. Get in touch with our team today.

Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

If you’ve had money difficulties but want to hold on to your business and feel like there is hope for a positive outcome, one solution can be to press ‘pause’ and get help to restructure your debt.

Here’s an explainer of simplified debt restructuring for Australian small businesses.

How does restructuring help to save businesses from insolvency ?

In the past, Australian businesses facing insolvency have had no choice but to be placed in the hands of a liquidator. Updates made to the law in 2021 mean that if your business has less than $1 million in debt, you have more options and the ability to stay in control while you figure out your next steps.

Referred to as ‘simplified debt restructuring’, this process requires your business to appoint a Small Business Restructuring Practitioner (SBRP) to help restructure your unsecured debts (outside of what you owe your employees) so you can avoid insolvency. If your company is in trouble, this practitioner will work with you and your creditors to come up with a plan that will take care of and relieve debts.

To be eligible for debt restructuring, your business must:

• Have less than $1 million in liabilities (not including employee entitlements)
• Be either insolvent or likely to become insolvent at some future time
• Be up to date with the payment of employee entitlements
• Be up to date with all tax lodgements (not necessarily tax debt)
• Not be under other restructuring or administration including a Deed of Company Arrangement or liquidation.

It’s also important that none of the business directors have gone through a similar process in the last seven years (your SBRP will check to ensure you meet all the requirements during your initial discussions).

If you are eligible for debt restructuring and your creditors agree to the proposal put forward, your business can continue to trade and avoid insolvency.

Your restructuring plan

Your SBRP will have 20 days to come up with a way to pay back the money you owe or absolve you of your debts. You’ll need to share all your financial information so this person can identify the best way to move forward.

Your plan may specify ‘cents in the dollar’ that you will repay or detail how you will return money to your creditors. It’s worth noting that additional debts incurred after you have enlisted the help of a restructuring expert will not be included in your plan.

Working closely with your SBRP, you’ll create a restructuring proposal statement, which includes a schedule setting out the company’s creditors, and the amount they are owed by your company.

Throughout the process, you’ll stay in control of your company and be able to trade. Once you have a debt restructuring plan, a proposal will be put to your creditors, who have 15 business days to accept or reject your suggestions.

Why restructure your debts?

It’s never a great feeling to reach out for support but if your company is in financial trouble, you can undergo the debt restructuring process and have temporary relief from the fear that your creditors can enforce their claims against you.

If more than 50 per cent of voters agree to the terms you put forward, your company can continue to trade and you can pay off your debts according to the plan.

How does a small business restructuring practitioner help?

The rules and process for restructuring debt are complex, which is why it’s mandated that you reach out for the support of a registered specialist.

Your SBRP will firstly confirm you are eligible for debt restructuring. Then they will get to know your business, prepare your plan and circulate it to your creditors, confirming at the same time that they believe you will be able to meet your obligations.

Once a plan is made, shared and agreed on, your small business restructuring practitioner manages the disbursement of payments to your creditors, based on the terms set out in the plan.

While simplified debt restructuring has saved many small businesses since 2021, there is fine print to be aware of. You can read more at treasury.gov.au or reach out to Legal Affairs Lounge for more information.

Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

What was originally used by individuals for personal use has now expanded to use by businesses to advertise – and often with great results.

However, social media should always be used with caution. You probably know about stranger danger already, but what about the repercussions of social media defamation?

Want to know why your business should have a social media policy?

Find out with the Legal Affairs defamation lawyers at Legal Affairs Lounge by reading on.

What is a social media policy?

A social media policy is loosely defined as a clear and concise document considered as part of the businesses employment and human resources policies.

Within it, employee responsibilities are outlined, which must be followed when dealing with social media. This includes inside and outside of business hours, for business-related social media posts and comments, and also employee’s personal social media activities accessible by the public.

Both individuals and companies alike have faced the repercussions of unsavoury social media activities. Contrary to popular belief, we all can’t hide behind our computer screens or mobile devices, especially when a potential defamation case is on the cards.

The main goals of a social media policy

There are four main goals of any good and solid social media policy.

What are they?

1. To educate employees

Employees must be made aware of the reality of legal and security risks associated with social media usage. A good social media policy will outline best practices to protect themselves and their employer/the company.

Thinking before posting should be stressed which includes but isn’t limited to avoiding confidentiality breaches, posting insensitive comments and conflicts of interest.

2. Protect employees

A social media policy not only protects a business’s integrity and reputation but can do the same for employees. Talk to your business lawyer about how this policy can protect employees from online bullying, harassment and potential defamation.

3. Protect your company from litigation

A social media policy provides the justification needed to dismiss an employee for improper social media use, while minimising legal risks for the business.

4. Protect the company brand

Employees should not post, like or comment online in a way that negatively impacts their company’s brand. A social media policy clearly defines the consequences of employees doing just that.

Make sure each employee as read and understood your company’s social media policy and can access it at any time. Your local, trusted business lawyer is able to devise and help you implement a clearly defined social media policy.

Need help with social media defamation?

If you believe someone is defaming you and/or your business, or you’re accused of doing likewise to someone else – you need the expert guidance of a defamation lawyer.

Legal Affairs Lounge have the professional expertise and experience in handling these situations whether it’s social media defamation, civil defamation or defamation of character.

Looking for a defamation lawyer on the Legal Affairs ?

Contact Legal Affairs Lounge today for proactive, professional legal services which encompass social media defamation, civil defamation and defamation of character.

Disclaimer: The content contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice.