Can you bind an heir?

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Rupes79

Member
27 June 2017
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1
Hi Folks
My work has offered me a retirement agreement whereby I am entitled to receive an income steam I currently receive as an employee, in retirement at the same rate of earning. The nature of income stream means it will likely reduce to nil over roughly a 10 year period.

I estimate in year 1 of retirement the income stream would be roughly equal to 30% of my total income in my final year of working and reduce by roughly 10% each year. Given I am approx 20 years away from retirement it is very difficult to quantify this reward but that's not my legal question.

The income stream can be paid to my beneficiaries provided my employer has a valid will. The income stream is subject to a claw back (reverse earn out) provision of up to 15 years.

In the agreement there is a provision for successors and it reads as follows:

"The covenants herein contained are made for the benefit of, and so as to bind, the parties hereto and their respective heirs, executors, administrators, successors and assigners"

By taking on this agreement I also assume a level of risk for future damages - unascertanable at the current time.

My question is can my beneficiaries be subject to the clawback or damages provision as a result of receiving this income.

I have questioned the scenario with my employer of what happens should the income be spent (it is retirement income after all) and the answer is the employer can make a claim against you and potentially sell your house.

The most likely scenarios of when a clawback could be triggered are including but not limited to the below:

- Break a restraint of trade clause
- Deemed a person not of Good Standing
- Breach any terms of my employers funders Code Of Conduct or any future funders Code of Conduct

It is very unlikely I will sign this agreement and I have concerns for fellow employees who have skipped straight to page 15 and signed it without reading it, much less understanding it.

Many thanks
Rupes
 

Tim W

Lawyer
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