I am one of ten (10) beneficiaries of a Will in equal shares. The estate is all cash. I have been asked to sign a Statutory Declaration that includes provisions regarding a) not being an undischarged bankrupt, b) I have not pledged estate assets to secure a debt and also c) to indemnify the executors with respect to loss or damage associated with their reliance on a) and b). This seems highly irregular. My understanding is in NSW that beneficiaries have ZERO obligations in order to receive their entitlements under a Will and certainly do not need to execute Statutory Declarations of this nature. I am not an undischarged bankrupt and nor have I pledged assets, however, that's not the point why would anyone provide a broad indemnity of this nature? Can anyone advise on this?
NSW Executor / Estate Attorney Demanding Beneficiaries Sign Statutory Declarations in order to Receive their Distributions from Estate
- Thread starter NinjaFlyer
- Start date
A bankrupt can be required to hand over testamentary gifts to their Trustee In Bankruptcy.
Further and in the alternative, sometimes, a testator makes a gift conditional upon the beneficiary not being (currently or imminently) bankrupt.
And, sometimes, clients (or non-client beneficiaries) tell lies to the lawyers about their position
(either by making deliberately false statements, or lying by omission) to evade the above.
Further and in the alternative, sometimes, a testator makes a gift conditional upon the beneficiary not being (currently or imminently) bankrupt.
And, sometimes, clients (or non-client beneficiaries) tell lies to the lawyers about their position
(either by making deliberately false statements, or lying by omission) to evade the above.
Tim,
Thanks for your comment.
There is no need for s Stat Dec. A simple 5 min search of the NPII database costing $15 is all that is required to establish if a person is a bankrupt. Less than 1:300 beneficiaries are bankrupts according to Australian statistics I found.
This Stat Dec nonsense is just lawyers generating billable hours and burning estate assets for their own benefit and not for the benefit of the estate or the beneficiaries.
www.afsa.gov.au
What law REQUIRES an Executor to solicit this Stat Dec, and further, that requires a Beneficiary to sign it..?
People lie on Stat Decs ALL THE TIME. The NPII database provides far more rigorous liability protections for Executors and estate attorneys (if there are indeed any liabilities at all).
Nobody I have asked can point to any statute requiring Stat Decs of this nature.
Thanks for your comment.
There is no need for s Stat Dec. A simple 5 min search of the NPII database costing $15 is all that is required to establish if a person is a bankrupt. Less than 1:300 beneficiaries are bankrupts according to Australian statistics I found.
This Stat Dec nonsense is just lawyers generating billable hours and burning estate assets for their own benefit and not for the benefit of the estate or the beneficiaries.
Bankruptcy Register search
You can use the Bankruptcy Register Search (BRS) to check if someone is, or has been, in a personal insolvency proceeding such as bankruptcy.
www.afsa.gov.au
What law REQUIRES an Executor to solicit this Stat Dec, and further, that requires a Beneficiary to sign it..?
People lie on Stat Decs ALL THE TIME. The NPII database provides far more rigorous liability protections for Executors and estate attorneys (if there are indeed any liabilities at all).
Nobody I have asked can point to any statute requiring Stat Decs of this nature.
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It’s an ass covering exercise by the executor. That doesn’t make it wrong. If you’ve got nothing to hide, then you shouldn’t have any issue. The whole ‘why should I have to?’ thing, which is quite typical, is countered by the ‘why should the executor have to stick their neck out because you won’t give a simple statutory declaration?’ thing.
As for the whole ‘burning fees’ issue. 10 x $15 charge (if that amount is correct) is possibly going to cost more than one template statutory declaration; especially when you add the cost of reviewing the results, and then the charge for searching something like the PPSR to ensure no securities given (another charge per search) - and that doesn’t even get to the indemnity issue. For the most part executors are not paid for their duty. Why shouldn’t they be indemnified, for what is usually a thankless job, when they can be held personally liable if things go wrong?
As for the whole ‘burning fees’ issue. 10 x $15 charge (if that amount is correct) is possibly going to cost more than one template statutory declaration; especially when you add the cost of reviewing the results, and then the charge for searching something like the PPSR to ensure no securities given (another charge per search) - and that doesn’t even get to the indemnity issue. For the most part executors are not paid for their duty. Why shouldn’t they be indemnified, for what is usually a thankless job, when they can be held personally liable if things go wrong?
I’m just going to dismiss the whole “if you’ve got nothing to hide” nonsense right away but at least we can agree that it’s a lazy ass covering exercise.
The estate is being charged hundreds (more than $1000 and potentially now pushing $2000) for the attorneys time-wasting distributing stat decs to 10x beneficiaries and coordinating the responses.
The issue is that getting the object of the exercise to sign a stat dec is not independent verification. People lie on stat decs all the time.
The odds in Australia are less than 1-in-300 beneficiaries are bankrupts. Furthermore there is a simple national database that exists to check if any person is a bankrupt. It takes 5 minutes and a $15 nominal fee and it’s completely an independent inquiry that would stand up to test in court. A stat dec has far less standing because it’s not independent of the object (the bankrupt).
I don’t know any lender that would accept a potential inheritance as security for a debt. If one actually exists then tell me who they are because I’d love to get a loan. The lender is clearly a moron. Wills can be changed in the blink of an eye. I’d love to know how a lender would propose enforcing a lien over the assets of an estate unless said lien was authorised by the executor/trustee in the first place.
Again, nobody has yet pointed to any statute that requires a beneficiary to execute a stat dec of this nature. The means exists for executors to make prudent independent inquires for a nominal fee. Liability covered. Heck they could even insert a notice in a national newspaper for less than $150. Attorney’s fees are running $400-$600/hr in this matter.
As a matter of principle I don’t sign anything unless I have to. Meanwhile beneficiaries are entitled to prompt disbursement. I’ve actually had advice that the executor/estate attorney may be liable for mismanagement of estate assets in this instance. Unnecessary process and dilution of the estate assets.
From my perspective executor liability is entirely on the executor if they didn’t want the job they should have declined the responsibility.
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Well that would be on the person swearing the sat dec .... It's still a legal document that another party can rely on 'to cover their ass'
The solicitor's actions in requiring a prospective beneficiary to make such a declaration
are in accordance with the general duty to avoid liability for economic loss to others caused arising from negligence.
Lawyers are, like anyone, entitled to presume the truthfulness of a Statutory Declaration
when they act upon its contents.
It would be negligent for us (lawyers) to simply take a person's word for it that they are not a bankrupt.
It would also be negligent to not look after an executor client facing the same hazard.
We use the oathen aspect of a Statutory Declaration as a defence to any claim against us (or against an executor client)
arising from lies (including lies by omission) told by would-be beneficiaries.
But, as you say, sometimes, people lie in Declarations.
One example is when a bankrupt, or an imminent bankrupt, or
a director of an insolvent (or near insolvent) business, perhaps facing a call on their personal guarantee(s),
lies to the lawyer (or to the executor) about their true financial position.
Loss arising from such a lie is a foreseeable risk
of the kind contemplated by the civil liability legislation.
Indeed, it is so "reasonably foreseeable" that we (lawyers) will from time to time
cross check the truth of a Declaration of this type by making an index check anyway.
So, yes, sometimes we can already know if you are a bankrupt, or an imminent bankrupt,
or an insolvent director, even before you lie to us in the Declaration.
(not to mention that a person can be prosecuted for lying in a Declaration)
And for the record, I didn't say lazy. Ass covering is a legitimate exercise when being in a trustee position. Lazy would be simply disbursing the funds - which would also be stupid.
But I suppose you could speak to the executor about your concerns in not providing the requested declaration. If you ask them to fully investigate all aspects that would be covered by the statement in lieu of its provision - with the costs of doing so to come out of your share of the estate - I suppose they might be willing to do so. No doubt it would cost more overall.
But I suppose you could speak to the executor about your concerns in not providing the requested declaration. If you ask them to fully investigate all aspects that would be covered by the statement in lieu of its provision - with the costs of doing so to come out of your share of the estate - I suppose they might be willing to do so. No doubt it would cost more overall.
Not sure about your math here. $150 in search fees plus an hour at say $500 = $650 versus $1000-$2000 in attorney fees doing it the stat dec route. 🤔
A search of the public records takes less time, less money, and certainly constitutes a far more reliable liability mitigation than relying upon a stat dec.
Why can't you just provide them with a stat dec if they want one.... Nothing says you are compelled to use that firm for that purpose is there .... Stat decs are freely available & are just as legal if signed & witnessed by a JP.