Edmonds Judd

personal property

Providing for your family in your will

Estate, Kids, Property, Relationships, Retirement
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You have some legal obligations

We all want to look after our families – both during our lives and after we die. One way you can make sure that your family is looked after when you die is by leaving behind a clear, well-drafted will.

 

In New Zealand, we have considerable ‘testamentary freedom,’ meaning we can generally choose how we want to distribute our personal assets after our deaths. Testamentary freedom has been a fundamental feature of New Zealand law for many years. There are, however, limits to testamentary freedom. We see these limits in action when claims are made against a family member’s estate.

 

Claims against an estate

Claims against estates can be made under the Family Protection Act 1955 which provides that you have  a moral duty to provide adequate maintenance and support for certain family members after your death. They include your spouse, children and sometimes grandchildren. Even if you have family members with whom you have had a poor relationship during your lifetime, if you do not adequately provide for their maintenance and support in your will, there is a risk they could make a claim against your estate.

 

If you want to leave unequal shares of your estate to your family members, or leave a close family member out of your will entirely, it is important to state this expressly in your will and to provide your reasons for doing so. This can reduce the likelihood of a successful claim being made against your estate.

 

Protecting beneficiaries from their own folly

If you are concerned about how a particular family member (a beneficiary) may use (or misuse) their share of your estate, you should discuss this with us before your will is drafted. Leaving your family members with a significant lump-sum of cash is not the only way to provide them with their share of your estate. There are options such as establishing a protective trust for their share or appointing trustees to manage money on their behalf. These options may ease your concerns.

 

Family members having different needs

If your family members have different needs, you may want to consider adjusting their share of your estate. With family members who have significant health issues or support needs, your obligation to provide for them may be greater.

 

Earlier this year, the High Court made a decision in a case,[1] upholding an earlier decision of the Family Court. That decision increased the proportion of a father’s estate that was awarded to his unwell son by a small amount. His son had been unable to work for several years due to his illness, and incurred costs associated with managing his illness. When his father awarded him a smaller share of his estate than his sister, the court decided this had breached his father’s duty to him. The duty to provide adequately for maintenance and support applied, even though the relationship with his father had been strained and dysfunctional over several years before his father’s death.

 

Repercussions of not providing for your family

If any of your family members have been left out of your will or have not been adequately provided for, they could make a claim against your estate.

 

When such a claim is made, the court can review the circumstances and make an award from the estate to remedy failure to provide adequate maintenance and support. This is why it’s important to talk with us about the drafting of your will. We can help you adjust your will to minimise the possibility of a successful claim against your estate.

 

Estate claims can cause increased distress, conflict and delays during an already challenging time for your family. The legal costs associated with defending such a claim can also significantly reduce the value of your estate.

 

Important to think this through

If you’re tempted to write your wayward son, estranged daughter or irresponsible spouse out of your will, it’s well worth getting advice first. This may spare your family a claim against your estate, and the stress and expense that goes along with such claims.

 

 

[1] Emeny v Mattsen [2024] NZHC 291.

 

 

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Receiving an inheritance during your relationship

Estate, House, Property, Relationships
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Relationships can be complicated waters to navigate at the best of times, but it can become even trickier when thought needs to be given to relationship property matters.

One such thorny issue is when one person receives an inheritance or other significant gift from a third party. For a variety of reasons, it may be important for that inheritance to be kept separate from other property of the relationship. This article focuses on the complications of keeping it separate.

Relationship property and intermingling

In most cases, after three years in a relationship, all property acquired during that relationship will be classed as relationship property to be divided equally between the couple if their relationship ends (either by separation or death).

Property that each person owned before the relationship is separate property and does not get divided with the other person. Inheritances or other gifts received during the relationship are, in most situations, also separate property and are not divided.

Separate property can, however, become relationship property in a variety of ways during the relationship. In the case of an inheritance, this happens when that property is ‘intermingled’ with other relationship property with the express or implied consent of the owner. The law says that the intermingling needs to have had the effect of making it too difficult or impractical to continue to identify the portion of separate property.

How this can happen

The most common example of intermingling occurs when money is inherited. If the money is deposited into a joint or other relationship bank account and other money is going in and out of that account, it can be very difficult to identify what part of the funds left in that account are still inheritance funds.

Another example is when inheritance funds are used to buy assets for family use or pay relationship debts.

In both examples, the inheritance could well be regarded to have been intermingled with the express or implied consent of the inheritance recipient. The inheritance would become relationship property.

Another common issue is when a party intends to keep an inheritance separate by putting it into a separate account (in their own name) but also uses that account to receive money that would be classed as relationship property, such as income. The inheritance may be regarded as intermingled with relationship property because income generally is a relationship property asset, despite the income being received into a separate account. Ultimately, however, each case will depend on its own facts.

While inheritances often take the form of cash, the same principles apply to a house or any other type of property that has the potential to be intermingled. In the case of a house, although it is usually easily identifiable as the source of the inheritance, that might change if significant renovations are undertaken by both parties to the relationship, or if the house is sold and the money received from the sale is intermingled with other relationship money.

Protecting inheritance

If you know you are going to receive an inheritance and you wish to protect it, it is important that you get professional advice to discuss how the inheritance might be used and how it can be best protected. The best option for you will depend entirely on your circumstances and plans for the inheritance. Some common protections include:

  • Keeping the inheritance completely separate either in a bank account set up for that purpose or in a separate investment in your sole name
  • Establishing a trust to hold the inheritance and keep it separate from your relationship, or
  • Having a contracting out agreement (prenup) prepared that sets out your separate property and the relationship property, and how all of that property would be divided if you separate or when one of you dies. These agreements can be entered into at any stage of the relationship.

No option is completely foolproof and each option has its own pros and cons.

If you are expecting an inheritance, or have recently received one, it can be a delicate topic to bring up with your spouse or partner. You may of course be perfectly happy to intermingle inherited property. It would, however, be prudent for you to talk first with us to discuss the options above and any implications that may bring to your relationship.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Social media – intellectual property owner’s friend or foe?

House, News, Your Own Business
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Treat your friend as if he might become an enemy (Publilius Syrus, 85-43 BC)

Social media is a very powerful marketing tool. If used and managed properly, platforms like Facebook, Instagram and Twitter can be a brand’s best friend.

If not managed properly, however, social media platforms can be a brand’s enemy. They can, at least temporarily, impede growth and — in the most extreme circumstances — cause significant damage to brand reputation.

In the context of intellectual property (IP) rights, whether social media platforms are your friend or foe depends on two factors:

  • How you manage the IP rights of your own business, and
  • How you treat the rights of others.

In this article, we focus on the two IP rights that feature most prominently in social media marketing – copyright and trade marks – and how these should be managed on social media.

Copyright – be vigilant

The IP right that is probably the most often complained about in social media is copyright.

Copyright rights arise automatically on the creation of an original copyright work. ‘Original’ means the product of more than minimal time, labour, skill and judgement and not copied from someone else’s work; it doesn’t mean ‘brand new’ or ‘novel’. The threshold to achieve ‘original’ status is low.

Copyright works include logos, photos, images, paintings, illustrations, sound recordings and films — all of which are used extensively on social media.

Quite often, copyright works are used on social media without a copyright owner’s permission. Businesses — from sole traders to large corporates — should be vigilant to ensure their copyright rights are not being infringed.

If you see unauthorised use of your copyright material on a social media platform, you should contact the infringer immediately asking them to stop and remove the posts.

If this is unsuccessful, or you are not comfortable with contacting the infringer directly, you should ask your IP specialist to send a strongly worded letter. If there is no response or action to that letter, you can make a formal complaint to the platform on which your copyright is being infringed.

The online complaint forms used by Facebook and Instagram, for example, require you to provide them with details of your copyright work (what type it is — photo, video, artwork, software, logo, etc.) and links to where the copyright work can be publicly seen. If the copyright work isn’t viewable online then you have to describe the work in detail or attach an authorised example. Without this information, the platforms cannot assess your complaint.

In cases involving photos, videos, artwork and logos businesses should be able to readily provide evidence of their rights to the platforms. In other cases, it could be more difficult to describe the copyright work or provide the requisite evidence.

It may be that you don’t want to provide a copy of your copyright work to Facebook; for example, if your complaint relates to infringement of copyright in confidential product drawings by a New Zealand competitor. In this case, the last thing you want to do is disclose your copyright works. However, enforcing your rights directly against an infringer to avoid the requirements of a formal complaint process may be difficult as the infringer could be based overseas or may not be locatable at all.

The bottom line is that if you can’t meet the platform’s requirements to prove copyright infringement you risk your complaint not being upheld and the unauthorised use of copyright material continuing.

Trade marks — be registered

Rights in a trade mark can be acquired through registration and/or use.

In the social media arena, registration of your trade mark is particularly important. Enforcing rights in unregistered trade marks on social media platforms is extremely difficult as these platforms do not recognise unregistered trade mark rights.

As a general rule, a business’s principal trade mark/s — usually a name and/or logo — should be registered for a number of reasons; the two main ones being:

  1. It is the best form of protection against unauthorised use of your trade mark. As registration is a matter of public record, anyone thinking of registering or using an identical or similar trade mark to yours can easily check to see if they can (or cannot)
  2. It provides a readily identifiable, nationally-recognised business asset — unlike the situation with unregistered trade marks where owners must provide evidence of use to establish their rights and where rights are often locally or regionally limited in scope.

A registered trade mark not only gives your trade mark better IP protection, but it is also more attractive to investors and potential buyers of your business than an unregistered trade mark.

If you see unauthorised use of your trade mark on a social media platform, then as with copyright infringement you should contact the infringer immediately asking them to remove the references or posts.

If this is unsuccessful, or you are not comfortable with contacting the infringer directly, then again you should ask your IP specialist to send a strongly worded letter. If that doesn’t work, make a formal complaint to the platform on which the infringement took place.

The online complaint form used by Facebook and Instagram, for example, asks you to provide registration details such as the country or countries in which your trade mark is registered, its registration number and the categories of goods and/or services covered by your registration. You are also asked to upload a scanned copy of your trade mark registration certificate/s or a screenshot of the registration on the website or database of the applicable national or community IP office/s; in New Zealand, this is the Intellectual Property Office of New Zealand. If your trade mark is not registered, you cannot complete the form.

The need for your trade mark to be registered is reinforced, for example, by Facebook’s Commerce & Ads IP Tool which gives users the ability to search ads, marketplace posts and group sale posts and report content that the user identifies as infringing their IP rights. Access to the Tool is not automatic though.

IP rights owners must apply to gain access using Facebook’s online form — which requests much of the same information as the trade mark complaint form.

In short, if you don’t have a registered trade mark you will face an uphill battle convincing a social media platform to uphold your complaint.

Parting thoughts

If you actively use social media to market and promote your business, do treat social media cautiously. If you haven’t already done so, register your principal trade marks and maintain a vigilant eye for any infringement of your copyright rights.

Copyright infringement by former President Trump’s team

An example of copyright infringement that hit the news in mid-2020 was the use on Twitter of a cover of Linkin Park’s 2002 song ‘In the End’ in a campaign advertisement released by former President Trump’s team. The video advertisement, originally posted by White House social media director Dan Scavino, was later retweeted by the former president.

On 18 July 2020, Twitter removed the advertisement following a formal takedown request by Machine Shop Entertainment, Linkin Park’s business arm and management company.

Reverse mortgages

Estate, Latest news, Retirement
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Increasing in popularity

The current combination of increasing living costs, rising house prices and low interest rates has seen more than property-seekers signing up to home loans. On the other side of the coin, some older homeowners are seeking ‘reverse mortgages’ from their lenders in order to release the growing equity in their property.

What is a reverse mortgage?

A reverse mortgage is a lending structure that allows you to access the equity you have accumulated in your home or other property. With a reverse mortgage, you borrow money from a lender using your existing home as security in order to, for example, supplement your living costs or complete renovations rather than for the purpose of acquiring a new property.

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Solving relationship property issues by mediation

Estate, House, Latest news, Relationships
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A cost-effective alternative to court

After separating, you could find yourself at loggerheads with your former partner or spouse on exactly how all property should be divided between you. Negotiations may be bouncing between your lawyers, with no common ground achieved. Without agreement, you could file court proceedings but learn costs would increase dramatically. As well, it could be years before a judge can give a decision on how your property will be divided.

Mediation, on the other hand, could be arranged within weeks. It offers a practical alternative to reach a conclusion on how property should be divided between you and your former partner.

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Succession law in New Zealand

Estate, Latest news, Retirement
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Law Commission to review conflicting inheritance laws

In late 2019 the Law Commission reported back to the government on its review of the Property (Relationships) Act 1976 (PRA). Discussion on Part 8 of the PRA that deals with the division of relationship property on the death of a spouse or partner was specifically excluded from the scope of that review.

Acknowledging the issues that could arise by not addressing the division of property when a spouse/partner dies, in December last year the government asked the Law Commission to review the law of succession – that is, the law that governs who inherits a person’s property when they die.

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PPSR lease losses

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Can be a real risk for business

When the Personal Property Securities Register (the PPSR) was established in 1999, most businesses were quick to catch on that it was a good idea to register security over goods that were sold under a line of credit. What wasn’t so easily recognised is that the register was designed to also capture leases of goods that are indefinite or extend past one year.

Businesses that frequently lease goods, or provide hire purchase arrangements, with the intention of remaining the true owner of the goods leased, do not always register their lease on the PPSR. They believe it to be an effective means of security that they retain legal ownership of the goods. This ownership can, however, be defeated by a registered interest on the PPSR and result in significant loss to their business.

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Make sure you have a will

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Gives comfort to your family

New Zealanders need to find time to sit down and make sure they have a will. We all know this is important but how many of us don’t get around to it? Recent research by the Commission for Financial Capability has shown that only 47% of Kiwi adults have a will and the figures are worse for women, Māori and Pasifika. This survey of 2,000 New Zealanders found that only 44% of women have wills compared with 51% of men. These statistics are concerning when you consider the devastating effects that not having a will can have on your family.

Will

Why should you have a will?

A will is often described as your final letter to your family. We agree with this but would add that your will is a legal document that gives instructions on what you want to happen to your personal assets after your death. Your will can also include matters such as the appointment of guardians for your children, what happens to any family heirlooms, whether you would like to be buried or cremated, or even who you would like to look after your beloved pet. Your will can relieve financial and emotional strain on your family, and help minimise the likelihood of disputes about your estate.

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Inherited debt? What if your parents die broke?

Latest news
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When you hear the word ‘inheritance’, what is your first thought? Is it positive or negative? Do you think about what you could receive from your parents, or what you might pass on to your children? Answers will vary, but generally the term ‘inheritance’ carries positive connotations. The Oxford Dictionary defines an ‘inheritance’ as ‘a thing that is inherited’. More helpfully, Wikipedia defines it as ‘the practice of passing on property, titles, debts, rights, and obligations upon the death of an individual’.

For this article, however, we’re focussing on ‘debts’ rather than actual things. What happens when your parents die broke? Can you inherit a debt?

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Economic disparity at the end of a relationship

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How might this impact you?

As much as we like to think we are living in the modern day, there are still a large number of relationships that follow the more ‘traditional’ practice of having one party act as the ‘homemaker’, while the other acts as the ‘breadwinner’. If the relationship breaks up, economic disparity is likely to be an issue.

With the divorce rate in New Zealand sitting at around 50%, chances are you have friends and family members who have structured their relationship in this more traditional sense and have now separated. The result is often that the ‘homemaker’ is left in a worse position financially because they have been out of the workforce for a long time and will struggle to get back into their career. The breadwinner, meanwhile, who could focus on their career during the relationship, is now earning at their full potential. This is economic disparity – one party is advantaged over the other.

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