Are you interested in buying a business? If you are, consider the following points carefully as it can save you a lot of money and heartache.

Are you interested in buying a business? If you are, consider the following points carefully as it can save you a lot of money and heartache.

For those of you who are contemplating buying a business, I have the following 10 points for you to consider:

1. Never sign any offers to buy any business until you have received legal advice. The lawyer should help to draft your conditions of purchase that will protect you. If you see the lawyer after signing the contract to purchase, it will be too late to make changes to protect you.

2. Always ensure there is a clause to allow your accountant to check the figures. That makes sure that the business income is as represented by the seller. You will be surprised how often I get complaints from a buyer that they have been cheated by the seller as the turnover of the business has been exaggerated by the seller.

3. Make a list of all assets that come with the business. If the photocopier, vehicles or coffee machine are supposed to be included, make sure it is listed in the schedule. Find out if there is any equipment that has been leased and repayments are still needed to be made by the seller.

4. Ensure that you have a clause to allow you to opt out of the contract if the lease terms are not favourable. There is no point in buying a business if the lease for the premises is going to expire soon. Make sure you get your lawyer to read the existing lease terms to make sure that the terms are favourable.

5. Ensure that any employees that are going to continue to work with you have all their long service and other leave benefits paid out. If you do not check this point, you could end up paying a lot of money for a liability which is the responsibility of the seller.

6. Have a clause that allows you to check the business turnover just before you purchase the business. That means you want to sit in at the business and see if the customers are really spending as much as the seller tells you.

7. If the business is a franchise, make sure that the contract is subject to your lawyer approving the franchise terms. You should also ensure there is a clause that the purchase is subject to the franchisor taking you in as a franchisee on terms that you are happy with.

8. If you are borrowing money to purchase the business, make sure that you update the vendors regarding the finance approval. There should be a clause that states that if finance is not approved within a certain time, you can get out of the deal.

9. Discuss with your accountant what business structure you are going to use. This should be done before you even make any offers. Your accountant should advise you on what is the best tax structure you should use bearing in mind the income of the business.

10. Ensure that you are happy with your settlement date. Will everything be ready by then?

There are many other minor details which can make your purchase a breeze. When in doubt, speak to a lawyer.

If you need a Korean speaking lawyer, call our office to speak to James Jung.

Enduring Power of Guardianship and Advanced Health Directive

Enduring Power of Guardianship and Advanced Health Care Directive

In Western Australia, an Enduring Power of Guardianship ("EPG") is a legal document that authorises a person of your choice to make important personal, lifestyle, and treatment decisions on your behalf should you ever become incapable of making such decisions yourself. This person is known as an enduring guardian. An enduring guardian can be authorised to decide about matters such as where you live, the support services you have access to, and the treatment you receive. An enduring guardian cannot be authorised to make property or financial decisions on your behalf.

What kind of decisions can an enduring guardian make?

•       Where you live, who you live with, and who you associate with.

•       Whether or not you work.

·      Makes treatment decisions on your behalf.

·       Decides what education and training you receive.

·       Commences, defends, conducts, or settles any legal proceedings on your behalf, except proceedings that relate to your property or estate.

·       Advocates for, and decides about, the support services you access.

·       Seeks and receives information on your behalf.

Like the Enduring Power of Attorney, you need to decide who is the best person to decide for you. If in doubt, speak to a lawyer. The appointed ensuring guardian may decide that they do not want to allow a friend or a relative to visit you in your nursing home. Choose your enduring guardian with great care.

Advanced Health Care Directives

            An advance health care directive is a written statement made directly to medical personnel about the treatment you want or do not want to receive if you ever become incapacitated and incapable of communicating your wishes. The treatments include medical, surgical, palliative and dental care. It also includes life sustaining measures. These are decisions that may be crucial, and you need to decide who is to make those decisions.

An advance health care directive is ineffective after death. Therefore, you cannot record your wishes about organ donation in such a document.

Duties as an enduring power of attorney

You have been appointed as an attorney under an Enduring Power of Attorney.

What are your duties?

Of course, you have to agree to be appointed as an attorney before the appointment can be effective. Sometimes, the Enduring Power of Attorney ("EPA") also states that the appointment will only take effect after a declaration is obtained from the State Administrative Tribunal ("SAT") stating that the donor is incapable of making decisions for themself. The SAT then makes an order that you are now legally the attorney for the donor or the person who appointed you. 

So what are your duties as an attorney under an EPA?

Your duties are set out in Section 107 of the Guardianship and Administration Act 1990. They include:

·  

     Exercising your power with reasonable diligence to protect the interests of the donor. So, you cannot take money from the donor's account and go on a shopping spree.

·       Keeping accurate records and accounts of all your dealings and transactions. If you fail to keep proper records, you may be prosecuted and fined.

·       Informing the SAT if you become a bankrupt.

·       Making an application to SAT if you wish to be removed or cease to act when the donor has lost capacity.

It is advisable to discuss your proposed actions with the donor if the donor is still able to provide a view or opinion even if they have lost capacity. So for example, if you think you should move the donor to a nursing home, you may still wish to bring the donor to a few of the proposed homes to see the donor's reaction. Sometimes, you may also wish to discuss your proposed course of action with other family members of the donor.

Once you are appointed, it is best to check that you have obtained all the relevant financial information relevant to the donor. You should also check what expenses the donor has so as to make sure the expenses are managed properly.

If you are unsure as to what needs to be done for your donor, do speak to a lawyer for advice. It may be that an application may need to be made to SAT for directions if you are uncertain as to whether your proposed action is proper.

Wills and estate planning in the spotlight again

Wills and estate planning

One of the most interesting aspects of my job is taking instructions from my clients when they are doing their estate planning. It is great to discuss with my clients how they have accumulated their assets and what plans they have to ensure that the assets are passed on to their beneficiaries.

In many relationships, the husband and wife (or de facto partners) usually see me to give me instructions for a mutual will. Very often, the parties say to me " If I die, I wish to give everything to my spouse". That sounds so great and loving. Both spouses will look at me with a smile and say they both agree.

I then tell them to consider this: If you have children and you give everything to your spouse, 

especially if the children are still young, what could possibly happen?

Well, your spouse could possibly remarry in the future. If they remarry, the new spouse will have a claim on the whole estate to the detriment of the children.

This is where it gets interesting as I get different responses from each spouse. Suddenly it clicks in the wife's brain.

"Oh yes, my husband will definitely quickly marry a pretty young blonde. My children will lose out"

The husband often has a different view thinking his loving wife will remain single after his death, mourning the loss of him, her beloved husband.

I did have such a case where I acted for a client whose husband and my client used to go on cruises every year.

The husband passed away and I was told by my client that she still continued going on cruises with her husband even after his death. Perplexed, I asked her how was that possible.

She told me that his ashes were in an urn which she brought on her cruises. "Wow" I said. "You must really have loved your husband".  I then asked her what she does on the cruises and she said she goes dancing. I did not ask her more. Suffice to say, 6 months later she came to see me to prepare a new will as she was going to marry someone she met on the cruise.

So, you never know where love will lead you. However, see a lawyer for advice regarding your will to prepare you for where your love leads you. A lawyer should be able to guide you to the best way to ensure your assets are protected and gifted properly to the ones you love.

Raymond Tan

Lawyer and Author of The Law in Black and White and the Yellow in Between.

 

Are you experiencing elder abuse

Dear Readers

Are you experiencing elder abuse?

What is elder abuse?  It's where the children of parents are unwilling to await their inheritance. They instead try to abuse their parents in different ways to try and get their dirty hands on their parent's money before the death of their parent.

Recent reports indicate that up to one in five older Western Australians are suffering from elder abuse.

I believe that the Korean community being a new migrant group may not have many elders within their midst. However, if they have elders in their family, the children need to be aware of any possible elder abuse by their siblings.

Elder abuse is such a bad problem that a recent National Elder Abuse Annual Report was done. It found that 32.2% of perpetrators are the older person's son and  30.7% are the person's daughter.

Experts believe that that is only the tip of an iceberg with many cases going unreported.

So what kind of abuse are our poor seniors suffering from:

(a) abuse of enduring power of attorney given to relatives.

(b) emotional abuse by preventing parents from having contact with other children.

(c ) slapping or even burning parents.

(d)  over medicating or under medicating. Why?

With a hope that the parent's life will be shortened so that the children get their hands on their inheritance faster.

The list goes on and it saddens me when I have to face these cases in my practice. However, I feel strongly about issues of parental abuse more than anything else in my practise of law.

Being a traditional Asian brought up to respect and honour my parents, such cases touches a raw nerve in my body.

Elder abuse could happen by placing your father in an all English speaking nursing home instead of one where the staff speaks the language that your father only understands and where there are residents of the same cultural background.

I am in the midst of a case where an enduring power of attorney was given to a son. The son is now trying to sell the family home and stopping the father from seeing the other children.

An enduring power of attorney is a document that authorises your attorney to deal with your assets. Very often a parent decides that they DO NOT have the mental capacity to deal with their property matters any more. They then give the enduring power of attorney to a son or daughter. The child then takes advantage of the authority given by their parents and proceed to sell assets of the parent so that they can access the funds of the parents.

An enduring power of guardianship is an authority given to someone to make decisions for you in regards to life style choices like:

(a)    where you live,

(b)    what medical treatment you get,

(c)     who you are allowed to spend time with.

Hence, it is important that you see a lawyer to discuss your rights especially in whether an enduring power of attorney or guardianship should be given to any child.

If you believe any seniors are being abused, you should report the matter to www.advocare.org.au

For parents. they should think hard about whom they are giving their enduring power of attorneys or enduring power of guardianships to. Seek legal advice to protect yourself.

Tan and Tan Lawyers have been serving the Perth Asian community for over 30 years. Please give us a call if you think you need help. We have a Korean born lawyer, James Jung who speaks fluent Korean. He is always keen to help his Korean contacts.