Backdating legal documents not possible ... without a time machine**

As explored in other View posts, backdating legal documents is never permissible, regardless of the phrase used to describe the approach (eg ‘retro dating’, ‘pre-dating’, ‘intended date’).

The decision in Edwards & Anor v Brougham [2022] SASC 8 provides another example of the rules in this regard.

Relevantly the factual matrix involved a dispute about the trusteeship of a discretionary trust where:

1. a sole individual trustee purported to transfer an asset of the trust to themselves (as a potential beneficiary of the trust);
2. there was evidence confirming the appointor of the trust had exercised their power to unilaterally remove the trustee before the purported transfer;
3. the trustee, on advice from a lawyer, backdated a deed of transfer to a date that was before the appointor removed the trustee.

In relation to the backdating, the court simply confirmed that it was 'not in itself effective to make a retrospective determination for the purposes of the trust deed'. The decision also confirmed:

1. it is not necessary for a trust deed to have a condition for effective removal of a trustee the giving of notice to the trustee being removed;
2. the key reason for not requiring a removed trustee to be notified is that a former trustee, who continues to exercise powers honestly without notice of their removal, will be protected in several ways, for example they are indemnified by trust assets (assuming they have acted honestly);
3. Where two or more appointors are nominated, unless there is unambiguous wording to the contrary, the assumption is that the surviving appointor may act solely, that is, the appointment of two or more persons to an office is both joint and several;
4. similarly, unless there is clear wording preventing the outcome, a trustee may also act as appointor;
5. the court acknowledged that having a trustee also acting as the appointor of a trust was a 'relatively unusual' situation and 'would naturally be expected only as a measure of last resort', given that under the trust deed (as is often the case) the appointor was structured as a checking mechanism on the powers of the trustee.

Similarly in the case of Jaken Properties Australia Pty Ltd v Naaman [2022] NSWSC 517, the confession of backdating cast a significant shadow over the claims of one of the parties.

As usual, please make contact if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the Alicia Keys song 'Time Machine'.

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Your digital footprint (part II) – some further comments on ‘stayin’ alive’**

Last week’s post considered 6 of the key areas we suggest be captured on any checklist relating to a person’s digital footprint.

As promised, this week’s post lists a further 7 areas to consider, namely:

1. Inventory of all electronic devices (eg smart phones, tablet, laptops, computers, reading devices, watches, fitness bands, headphones, dvds, hard drives, USB sticks, digital cameras etc)
2. Review all apps on smart phones and tablets
3. Digital/virtual life games (eg Second Life, Kaneva, Virtual Life, School of Dragons, Twinity etc)
4. Online shopping (including payment gateways, buy/sell/swap services, ebay, Craiglist etc)
5. Online interactive gaming
6. Online gambling accounts (including Lotto, TAB, casino style games)
7. Online memberships (including discussion groups, home delivery, associations, clubs, libraries, professional associations, hobby groups, frequent usage/loyalty/rewards programs, work or student alumni associations, dating and introduction services)

** For the trainspotters, the title of today's post is riffed from the Bee Gees song 'Stayin’ alive’.

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Your digital footprint (part I) – a bit like stay(ing) alive**

A previous post has considered the key issues in relation to digital assets on death.

View also provides free access to a template memo of directions that has a section on digital assets.

One of the easiest ways to ensure a person’s digital footprint is identified and arguably the best way to achieve this is by using a checklist.

Where relevant the checklist should confirm contact details, user names, passwords, access codes, answers to security questions, log in pins, member numbers and payment arrangements.

Set out below are 6 of the areas we suggest be captured on any checklist – next week’s post will list a further 7.

In summary:

1. Social media (including Facebook, Twitter, Linkedin, Instagram, Pinterest, Snapchat, Google hang out, Tumblr, Yammer)
2. Digital platforms (including Skype, YouTube, App Stores, blogs, online music and movie streaming, education and information services [eg TED, Udemy, podcasting, books], news feeds, magazines, software providers, personal websites, domain names)
3. Online storage (including documents, personal information, photos, videos, personal health and fitness, dictation, blogs, data storage, diaries, journals, Moleskins, Evernote, back up storage services, Dropbox)
4. Digital financial assets (rewards points, prepaid services, Bitcoin etc)
5. Email accounts (including work, gmail, Hotmail, Bigpond, personal), including any automated responses and mail lists subscribed to
6. Instant messaging and SMS services

As usual, please make contact if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from Hamilton and the song 'Stay alive’.

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A cover is not the book** Taxation of executor’s commission

Generally, where a person acts as the executor of another’s estate, one of three approaches are adopted to financially recognise the time, energy and effort involved.

In summary, the approaches are:

1. Reimbursement only – under this approach, all costs incurred by the executor (for example, engaging professional advisers) are reimbursed to the executor.
2. Payment according to services performed – often, this will be calculated by reference to the number of hours spent, multiplied by an appropriate hourly rate.
3. Commission.

The rules in relation to executor’s commission are relatively complex, largely based on case law that in some instances is hundreds of years old.

Importantly however, from a tax perspective, the Tax Office has confirmed that the payment of commission is essentially a reward for services rendered. This means that despite the fact that there is no formal employer/employee relationship, the income received by an executor must be included in their assessable income in the year it is derived and taxed at normal marginal rates.

This conclusion is explained in more detail in ATO ID2014/44.

Partly to counteract this outcome, and to provide a level of certainty as to the overall quantum of payment that is ultimately received by an executor, some will makers simply provide a specific cash gift to their executors under their will.

As usual, please make contact if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from Mary Poppins Returns and the song 'A cover is not the book’.

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