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Coal seam gas insights: How your CCA affects your Will

You’ve signed a Conduct and Compensation Agreement (CCA) but have you reviewed your Will?

When it comes to coal seam gas, every landholder who signs a CCA also binds their successors. With an increasing number of landholders agreeing to annual payments rather than a lump sum, an important question that needs to be asked is whether any unpaid compensation at the date of your death will become an estate asset.

There is uncertainty within the law at present as to whether your compensation payments will be paid to the successor of your land or fall into the rest and residue of your estate. There is no guarantee that a Court will find that certain conditions of your CCA run with the land, and therefore the compensation may not be paid to the beneficiary of the land as you may expect.

Until the law is clarified in this area, the only way to ensure that your compensation payments are paid to the beneficiary of your choice is to have a clause in your Will specifying where the compensation is to be paid upon your passing.

Indeed any unpaid compensation payments agreed to under a CCA could be used as an effective estate planning tool. For example, in an estate which is asset rich and cash poor you could specify in your Will that annual compensation payments be paid to a specific beneficiary that may not be inheriting the land. If however, you require the payments to be made to the beneficiary of your land, for certainty, this should also be addressed in your Will.

Should you wish to discuss this issue and your estate planning, please contact the Shine Lawyers Wills and Estate Planning Team today.

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Written by Shine Lawyers. Last modified: February 26, 2014.

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