In this presentation, Thomas Skeffington, Principal at RSM Bird Cameron, helps you understand the importance of succession planning. To view a video of this presentation, including slides, visit www.opc.com.au/businessxchange OPC proudly hosts the Goulburn Business xChange, a regular event established for local businesses to hear from a range of speakers who deliver short presentations and provide practical advice on a range of useful key areas of business including Technology, Marketing, Website development, Finance, Legal and HR. The event is free and open to all business people in the Goulburn and surrounding region. If you would like to attend then please visit www.opc.com.au/contact or call 1300 788 616.

1. Succession Planning
Thomas Skeffington
RSM BIRD CAMERON

2. The 7 year check
• Pause to review your will every 7 years
• Communication is the key
• What happens if “I die tomorrow”?
• What happens if I die without a will?

3. Family trusts in succession plans
• What is a Trust?
• What is a Testamentary Trust?
• What tax advantages are there in a
Testamentary Trust? – Discretion of income
including allocation to children or
grandchildren under 18 years of age

4. Testamentary Trust
Example
• Presently minors are taxed at over 66% on
income above $416
• Division 6AA allows minors to be taxed at
adult marginal rates of tax

5. Example – A man dies leaving his estate to his wife and 3 minor
children. If he dies leaving an estate worth $2 million invested
at 5%, the result would be:
Income Tax
Wife $ 25,000 $1,292
Child 1 $ 25,000 $16,225
Child 2 $ 25,000 $16,225
Child 3 $ 25,000 $16,225
$ 100,000 $49,967

6. Example
• By using a Testamentary Trust
Income Tax
Wife $ 25,000 $1,292
Child 1 $ 25,000 $1,292
Child 2 $ 25,000 $1,292
Child 3 $ 25,000 $1,292
$ 100,000 $5,168

7. Example
• If the Testamentary Trust had not existed and
the husband left the entire amount to his
wife, she would have an annual tax bill of
$24,947
• The Testamentary Trust saved $19,779 pa

8. Questions