Estate Plan Presentation 1049035 1


Published on

Estate Planning , Wills and Asset/Property Presentation

  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Estate Plan Presentation 1049035 1

  1. 1. Estate Planning Presentation “ Before and After…” Alex Tees, Tel 02 9281 3230/0409813622 Solicitor, Estate Planning Adviser Email
  2. 2. Important disclaimer <ul><li>No person should rely on any part of the contents of this presentation without first obtaining advice from a qualified professional person. This presentation is given on the terms and understanding that the author is not responsible for the results of any actions taken on the basis of information in this presentation, nor for any error in or omission from this presentation. The author hereby expressly disclaims all and any liability and responsibility to any person, whether a purchaser, recipient or reader of this presentation or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this presentation. </li></ul>
  3. 3. “ MODERN SUCCESSION & ESTATE PLANNING “ <ul><li>Due to increasing complexity in family relationships and business/investment structuring, along with complicated tax and legal regimes - modern estate planning, done properly, must encompass issues such as : </li></ul><ul><ul><li>Efficient intergenerational transfer of wealth with harmony </li></ul></ul><ul><ul><li>Asset protection ( Keeping out “Predators/Creditors” & Keeping the Wealth in the Family ) </li></ul></ul><ul><ul><li>Tax (at both State and Federal level) </li></ul></ul><ul><ul><li>Superannuation (Formation + Review of Deeds) </li></ul></ul><ul><ul><li>Trusts (Formation + Review of Deeds) </li></ul></ul><ul><ul><li>Investments/insurance structuring </li></ul></ul><ul><ul><li>Resolution of disputes and other issues through the use of an “Independent Referree” – Dispute Resolution </li></ul></ul>
  4. 4. WHAT Lawyers should DO in co-operation with Accountants and Financial Planners <ul><li>Provision of strategies and advice in collaboration with other professionals ( Accountants/Financial Planners) to deliver the optimum outcome(s) for client (s): </li></ul><ul><ul><li>Modern Estate Planning Strategies </li></ul></ul><ul><ul><li>( Before and after death ) </li></ul></ul><ul><ul><li>Testamentary Trusts ( Trusts created after death) </li></ul></ul><ul><ul><li>Family Trusts </li></ul></ul><ul><ul><li>Self-managed superannuation funds (SMSF) </li></ul></ul><ul><ul><li>Business succession planning.( a “will” for a Business ) </li></ul></ul>
  5. 5. Estate Planning - HOW a Lawyer should and can OPERATE <ul><li>Timeframes agreed with client and referrer at each stage to ensure efficient completion and accountability </li></ul><ul><li>Fixed Fees or a fixed range of fees & the First meeting with client(s) is purely a scoping exercise & obligation free ( often in Accountants/Financial Planners ‘ office ) </li></ul><ul><li>Collaboration /Reporting to Accountant/Fin’Planner at each stage = Further Fee & protection opportunities..for you </li></ul><ul><li>Systematic and efficient delivery ( x 3 Meetings) </li></ul><ul><li>Technical and client-related queries welcomed from all Referrers/Client(s) </li></ul><ul><li>Referral to other Specialist Tax Services </li></ul>
  6. 6. Why is it different ? - the way it is recommended to operate compared to OTHER LAW FIRMS ? <ul><li>High level technical expertise in superannuation , taxation , and Trust law – Solicitor(s) should work with and have access to the resources of Accounting advisory firms .(throughout the World) </li></ul><ul><li>Specialist Solicitors who understand and appreciate the Financial planning process, work together with Clients’ Financial Planners & Accountants. </li></ul><ul><li>Encourage First meetings/other meetings at Financial Planners/Accountants’ office and/or clients home/office. </li></ul><ul><li>Fixed price contracts (or Fixed Range) ( Approx 75% Tax Deduction ) </li></ul><ul><li>Comprehensive Estate Planning Portfolio / Folder. </li></ul><ul><li>Delivery meetings can be Optional Family meetings to include the children – builds bridges to next generation </li></ul>
  7. 7. A Modern Will – Creative use of Trusts after Death…(as well as * Other structures ) <ul><li>Will Maker/Testator makes a Will to flexibly provide ; </li></ul><ul><li>Optional Testamentary Trust or other *Structures created after Death (*Note Tax laws may change !?) </li></ul><ul><li>“ Beneficiaries” Persons receiving Money & Property , receive it via a Trust of which they or their Nominated Person become Trustee </li></ul><ul><li>Provides Tax Efficiency and Assett Protection </li></ul><ul><li>* If the law changes Provision for Other Structures such as Partnerships, Joint Ventures and different types of Companies/Corporations may be necessary….. </li></ul>
  8. 8. Example – Optional Trusts After Death EXECUTOR (May not be the same Person) TRUSTEE (S) TRUST TRUST TRUST
  9. 9. <ul><ul><li>EXECUTOR WILL </li></ul></ul>The Efficient Will – *Possible use of Trusts after Death……….. Optional Discretionary Testamentary Trust ! E Trustee <ul><ul><li>Tax savings, especially for minor beneficiaries </li></ul></ul><ul><ul><li>Flexibility of distributions </li></ul></ul><ul><ul><li>Asset protection for trust assets </li></ul></ul><ul><li>Beneficiaries include: ( THOSE RECEIVING GIFTS ) </li></ul><ul><ul><li>Primary Beneficiary –Surviving Spouse/Children </li></ul></ul><ul><ul><li>Family Members </li></ul></ul><ul><ul><li>Related Entities </li></ul></ul>Trustee - Primary Beneficiary ( Surviving Spouse/ Children) B
  10. 10. Case Study 1 – Wealthy Woman marries a much less Wealthy Gentleman – Who Needs Protection ? <ul><li>Assets and Possible Family Situation </li></ul><ul><li>( Married or Unmarried) </li></ul><ul><li>Possibly have one child </li></ul><ul><li>Woman owns a House/Property </li></ul><ul><li>Woman a High income earner/ & Wealthy </li></ul><ul><li>Perhaps the Husband will never have a high income earning capacity </li></ul>
  11. 11. Case Study 1 - ESTATE PLANNING - WISHES & Concerns - Whose ? !! <ul><li>Protect the child if both or One Spouse dies </li></ul><ul><li>Ensure Husband does not receive too much “loot” from His Wealthy Wife if she dies first ? ( & Protect the Child as well !) </li></ul><ul><li>Ensure the Husband at least has a Roof over his head and adequate provision while he cares for the child if Wife dies before him… </li></ul><ul><li>Ensure Equity & Sensitivity ………… </li></ul>
  12. 12. Case Study 1 -Possible Strategies <ul><li>A Separate Care for the Spouse Trust for the Husband with little wealth </li></ul><ul><li>A Separate Trust for the Husband with sufficient Money/Property </li></ul><ul><li>A Separate Trust for the child with another relative of the Wife as Trustee (Husband given right to occupy Family Home for life ,while Child receives all the Wifes’ Estate………) </li></ul><ul><li>Recommend and Ensure the Husband owns Adequate & generous Life Insurance over the Life of his Wife in case she dies first……. </li></ul>
  13. 13. Case Study 2 – George & Marina <ul><li>George 55, Marina 54 - both retired </li></ul><ul><li>Children ; Jessica 27 (De Facto), </li></ul><ul><li>Sarah , 22 (Married) </li></ul><ul><li>Jack 21, (Has a Disability, numerous Partners) </li></ul>
  14. 14. Case Study 2 – George & Marina <ul><li>ASSETS </li></ul>Home Joint tenants Investment Property 1 Joint tenants Managed funds SMSF (Self Managed Super’ Fund) Shares SMSF Direct property SMSF
  15. 15. Case Study 2 – George & Marina <ul><li>ESTATE PLANNING - Wishes & Concerns </li></ul><ul><ul><li>George to Marina and vice versa in the first instance </li></ul></ul><ul><ul><li>Then equally to children </li></ul></ul><ul><ul><li>Specific protection required for Jack due to disability </li></ul></ul><ul><ul><li>Wealth to be retained in the family </li></ul></ul><ul><ul><li>Derive some tax efficiency </li></ul></ul>
  16. 16. Case Study 2 – George & Marina <ul><li>Possible STRATEGIES </li></ul>“ Estate Assets” Testamentary Trusts & *other optional Structure (s) Family Home Sever tenancy Investment Property 1 Sever tenancy SMSF (Super Fund) BDBN (Binding Death Benefit Nomination)
  17. 17. Case Study 2 – George & Marina <ul><li>STRATEGIE(S) - WILLS </li></ul>Concern Strategy Protection of family wealth from spousal and other claims Testamentary Trusts (TTs) & other Structures with crisis provisions (removal of Trustees, Directors, “Controllers” etc) Protection for Jack - Control - Conflicts of interest Protective Trust - ‘Family’ control - Testamentary Protector Understanding of “non-estate assets” and planning required Sever joint tenancy (Family Home) Cascading Binding Death Benefit Nominations (Super’)
  18. 18. STRATEGIES – SMSF- Super’Funds <ul><li>Concerns & Strategy </li></ul><ul><li>Maximise superannuation benefits during lifetime, </li></ul><ul><li>potential inability of survivor to recontribute to super </li></ul><ul><li>- Use “Reversionary” pensions </li></ul><ul><li>Optimising tax with protection </li></ul><ul><li>(*BDBN = Binding Death Benefit Nomination) - Cascading *BDBNs </li></ul><ul><li>- first, reversionary </li></ul><ul><li>- then, *LPR </li></ul><ul><li>(* Legal Personal Representative ) </li></ul><ul><li>Ongoing control of SMSF -Corporate Trustee appropriate ? </li></ul>
  19. 19. Other Possible Strategies – Some “Non Estate Property” – Family Trusts /Super’ <ul><li>Concerns & Strategy </li></ul><ul><li>1) Transition of control of Family Trust -Trust Deed Review </li></ul><ul><li>- Deed of Future Dealing / Alter Trust Deed </li></ul><ul><li>( to take in succession) </li></ul><ul><li>2) “The Business” Release of value in the business </li></ul><ul><li>– how to pass on to family </li></ul><ul><li>- Business Succession Agreement – “A Will for a Business” </li></ul><ul><li>3) Superannuation Nominate LPR as beneficiary, </li></ul><ul><li>Insurance(s) Nominate LPR as beneficiary </li></ul>
  20. 20. Case Study 3 – Simpler Case <ul><li>FAMILY SITUATION </li></ul><ul><li>Jack, 53 & Jill 49 - both still working </li></ul><ul><li>4 children : </li></ul><ul><ul><ul><ul><li>Mark 23 … single (Jacks child first marriage) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Steve 21 … single, (Jacks child first marriage) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Marina 20 … De Facto (Jills child 1 st marriage ) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Helena , Age 3 (Jack & Jills child 2 nd Marriage) </li></ul></ul></ul></ul>
  21. 21. Case Study 3 Jack & Jill - Assets <ul><li>Home - Joint tenants </li></ul><ul><li>Investment property – Joint Tenant </li></ul><ul><li>SMSF (Self Managed Super’ Fund) </li></ul><ul><li>Shares SMSF </li></ul>
  22. 22. Jack & Jill (not over the Hill) (3) <ul><li>Possible ESTATE PLANNING WISHES & Concerns </li></ul><ul><ul><li>Jack to Jill and vice versa in the first instance </li></ul></ul><ul><ul><li>Then equally to children </li></ul></ul><ul><ul><li>Specific protection required for Helena due to young age </li></ul></ul><ul><ul><li>Keep wealth in Family ;Wealth to be retained in the family </li></ul></ul><ul><ul><li>Derive some tax efficiency </li></ul></ul>
  23. 23. After Jack & Jill Die …. (3) <ul><li>Some Strategies : </li></ul><ul><li>1.Estate Assets Optional Testamentary Trusts </li></ul><ul><li>2.Home - Sever Joint tenancy </li></ul><ul><li>3.Investment Prop - Sever Joint tenancy </li></ul><ul><li>4.SMSF (Super Fund) - BDBN </li></ul><ul><li>(Binding Death Benefit Nomination(s) </li></ul>
  24. 24. General Wills Strategies <ul><li>STRATEGIES – WILLS (cont) </li></ul>Concern Strategy Tax efficiency Trust structure - income splitting properties - 102AG concessions for minors Executors discretions Ability for younger beneficiaries to ‘fritter-away’ wealth Qualifying Age – eg 25 “ Young Mens disease”(beware “young ladies disease” as well !) Estate conflicts – Loans Equalisation provisions
  25. 25. Summary <ul><li>No two strategies are the same </li></ul><ul><li>No two Testamentary Trusts are the same </li></ul><ul><li>Strategy must be consistent and coherent across estate and non-estate assets </li></ul><ul><li>Must be a collaborative approach –Advisers/Lawyers </li></ul><ul><li>Don’t forget Enduring Powers of Attorney /Guardianship </li></ul><ul><li>Specialist strategy and intellectual property – no ‘one size fits all’ </li></ul>
  26. 26. Thank You ! – Reminder – Optimal Process <ul><li>Any Questions ? Tel Alex Tees, </li></ul><ul><li>0409813622 / 02 9281 3230 [email_address] </li></ul><ul><li>Process ; </li></ul><ul><li>Get Facts Straight – List Assets/Property </li></ul><ul><li>Compare Notes with Clients Accountant, Financial Planner </li></ul><ul><li>Interview to Confirm instructions </li></ul><ul><li>Explanation/Signing Interview </li></ul><ul><li>Optional Family Meeting ? </li></ul>