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Sydney Bulletproof Your Life Presentation (also national)


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Presentations to support book "Bulletproof Your Life" Sydney Australia

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Sydney Bulletproof Your Life Presentation (also national)

  1. 1. <ul><li>“ I wholeheartedly recommend this book that actually makes the law interesting and understandable” Derryn Hinch 3AW </li></ul><ul><li>“ This is a book every family should read now rather than later.” Sydney Morning Herald </li></ul><ul><li>“ Geoffrey Winn doesn't tell you how to become rich, but he does offer something the rich have: peace of mind, secure in the knowledge that you are as protected as you can legally be. Great book.“ Dan’s Fiction (five star site) </li></ul><ul><li>“ Geoffrey Winn wants to help you take control of your life.” InvestSmart  </li></ul><ul><li>“ This book will help you avoid nasty financial surprises.” The Age </li></ul>
  2. 2. <ul><li>Protecting yourself, your family and your assets = empowerment </li></ul>
  3. 3. <ul><ul><li>Ask hard questions about your financial and legal affairs NOW </li></ul></ul><ul><ul><li>Bulletproof frame of mind = different perspective </li></ul></ul><ul><ul><li>Proactive – not reactive </li></ul></ul>
  4. 4. Everything Changes !!!
  5. 6. <ul><li>The Bulletproof prescription for stress relief and the “lack of power principle” </li></ul><ul><li>Lack of control = stress </li></ul>
  6. 7. Simple Elegant Organised
  7. 8. <ul><li>When it comes to the law, simplicity is power </li></ul>
  8. 9. <ul><ul><li>Learn from others – what LawMatch taught me </li></ul></ul><ul><ul><li>What you can learn from other’s experience </li></ul></ul>
  9. 10. Rich people don’t worry when the refrigerator breaks down
  10. 11. <ul><li>Peace of mind is your highest goal – </li></ul><ul><li>see the Big Picture </li></ul>
  11. 12. <ul><ul><li>Power of attorney – financial, health & lifestyle </li></ul></ul><ul><ul><li>Estate planning </li></ul></ul><ul><ul><li>Insurance </li></ul></ul><ul><ul><li>Public liability </li></ul></ul><ul><ul><li>Financial agreement </li></ul></ul><ul><ul><li>Superannuation </li></ul></ul><ul><ul><li>Asset protection </li></ul></ul>
  12. 13. <ul><li>Bulletproofing is a question of values </li></ul>
  13. 14. <ul><li>What are the values that I want to pass on to those for whom I am responsible? </li></ul>
  14. 15. <ul><li>Most people don’t have legal problems - they have simply failed to avoid having the problem in the first place </li></ul>
  15. 16. Plan Your Estate
  16. 17. <ul><li>You always need a will </li></ul><ul><li>Don’t undervalue your true wealth </li></ul><ul><li>More than a mere transfer of assets </li></ul>
  17. 18. <ul><ul><li>What are the values that I want to pass on to those for whom I am responsible? </li></ul></ul><ul><ul><li>Bulletproof value - don’t inflict chaos on loved ones </li></ul></ul>
  18. 20. <ul><ul><li>Estate v Non-Estate Assets – traditional view </li></ul></ul><ul><ul><li>What’s the difference? Why is this important? </li></ul></ul><ul><ul><li>How to use it to your advantage </li></ul></ul>
  19. 21. <ul><ul><ul><li>Think about a testamentary trust - endless flexibility for accountants and financial planners. </li></ul></ul></ul><ul><ul><ul><li>What is a trust? </li></ul></ul></ul>
  20. 22. <ul><ul><li>Will -> beneficiaries </li></ul></ul><ul><ul><li>Testamentary Trust -> trustee -> beneficiary </li></ul></ul><ul><ul><li>Beneficiaries = right to be considered (discretionary) </li></ul></ul>
  21. 23. Why is this structure useful? <ul><ul><li>Tax </li></ul></ul><ul><ul><li>Streaming </li></ul></ul><ul><ul><li>Children’s Marriages </li></ul></ul><ul><ul><li>CGT </li></ul></ul><ul><ul><li>Professional exposure </li></ul></ul><ul><ul><li>Bankruptcy </li></ul></ul><ul><ul><li>Disability – note Special Disability Trust </li></ul></ul><ul><ul><li>Spendthrift child </li></ul></ul>
  22. 24. Pitfalls <ul><ul><li>Ongoing administrative issues - is estate sufficient to warrant the trust? </li></ul></ul><ul><ul><li>Adequate funding - boost with superannuation + insurance </li></ul></ul><ul><ul><li>No privacy </li></ul></ul><ul><ul><li>Laws change – e.g. 2002 Centrelink assets test change </li></ul></ul><ul><ul><li>Capacity </li></ul></ul>
  23. 25. It’s a lot easier to lose assets than it is to accumulate them
  24. 28. The First Line Of Defence – Insurance <ul><ul><li>Damage or loss to your home </li></ul></ul><ul><ul><li>Loss of home contents </li></ul></ul><ul><ul><li>Damage to someone else’s property </li></ul></ul><ul><ul><li>Damage to your motor vehicle (or someone else’s) </li></ul></ul><ul><ul><li>Injury to someone else </li></ul></ul><ul><ul><li>Public liability </li></ul></ul><ul><ul><li>Personal accident </li></ul></ul><ul><ul><li>Temporary or permanent disability and sickness </li></ul></ul>
  25. 29. Get adequate replacement insurance <ul><ul><li>ACT bushfires </li></ul></ul><ul><ul><li>The components of the total cost of rebuilding </li></ul></ul><ul><ul><li>Improvements </li></ul></ul><ul><ul><li>Renovations </li></ul></ul><ul><ul><li>Inventory </li></ul></ul><ul><ul><li>Don’t use rates notice </li></ul></ul><ul><ul><li>Take account of rising home building costs </li></ul></ul><ul><ul><li>Review, review, review </li></ul></ul>
  26. 30. <ul><ul><li>Be wary of averaging clauses – why your family heirlooms are only insured for half their value </li></ul></ul><ul><ul><li>Public liability insurance – does your dog bite? </li></ul></ul>
  27. 31. Flood Insurance <ul><ul><li>Not part of most house and contents insurance </li></ul></ul><ul><ul><li>Flood and other types of water damage may be treated differently by your insurer </li></ul></ul>
  28. 32. What is your most valuable asset?
  29. 33. Protect your income <ul><ul><li>Your age – younger may be better </li></ul></ul><ul><ul><li>What you can afford? </li></ul></ul><ul><ul><li>How much do you need? </li></ul></ul><ul><ul><li>Do you have any equivalent cover? </li></ul></ul><ul><ul><li>What is covered – injury &/or sickness </li></ul></ul><ul><ul><li>&quot;Pre-existing&quot; illnesses? </li></ul></ul>
  30. 34. <ul><li>PROBLEM – how to bulletproof decisions about your health, your finances and your lifestyle </li></ul><ul><li>BULLETPROOF SOLUTION - use the law to your advantage </li></ul>
  31. 35. Powers of attorney <ul><ul><ul><li>General </li></ul></ul></ul><ul><ul><ul><li>Enduring financial (“enduring” = bulletproof issue) </li></ul></ul></ul><ul><ul><ul><li>Enduring medical </li></ul></ul></ul><ul><ul><ul><li>Enduring guardianship </li></ul></ul></ul>
  32. 36. <ul><li>Guardian appointed by Tribunal </li></ul><ul><li>v. Enduring Guardian </li></ul><ul><li>= crucial bulletproof difference </li></ul>
  33. 37. <ul><li>Ageing parents </li></ul><ul><li>What to discuss about their decision-making needs for the future. </li></ul>
  34. 38. Do It Yourself <ul><li>NSW Office of the Public Guardian </li></ul><ul><li>Phone 1800 451 510 </li></ul>
  35. 39. <ul><li>Superannuation – a regulated </li></ul><ul><li>environment </li></ul>
  36. 40. <ul><li>After I die my superannuation: </li></ul><ul><li>A. Goes to my family </li></ul><ul><li>B. An asset that is part of my will </li></ul><ul><li>C. Continues to exist without me </li></ul>
  37. 41. Superannuation Death Benefits <ul><ul><li>“ Death benefit” = balance super account plus life insurance </li></ul></ul><ul><ul><li>Binding or non-binding nominations </li></ul></ul>
  38. 42. Who is eligible to receive your superannuation after you die? <ul><ul><ul><ul><li>A. Your spouse </li></ul></ul></ul></ul><ul><ul><ul><ul><li>B. Your de facto spouse </li></ul></ul></ul></ul><ul><ul><ul><ul><li>C. Your former spouse </li></ul></ul></ul></ul><ul><ul><ul><ul><li>D. Children who are dependent on you </li></ul></ul></ul></ul><ul><ul><ul><ul><li>E. Adult children who are not dependent on you </li></ul></ul></ul></ul><ul><ul><ul><ul><li>F. Your mother-in-law who lives with you and has no other means of support </li></ul></ul></ul></ul>
  39. 43. Who is a “dependent”? <ul><ul><ul><li>a spouse or de facto spouse; or </li></ul></ul></ul><ul><ul><ul><li>a child; or </li></ul></ul></ul><ul><ul><ul><li>any person financially dependent on you; or </li></ul></ul></ul><ul><ul><ul><li>somebody with whom you had an “interdependent” relationship. </li></ul></ul></ul>
  40. 44. . <ul><li>For tax purposes: </li></ul><ul><ul><ul><li>super benefits paid to dependants are tax-free </li></ul></ul></ul><ul><ul><ul><li>benefits paid to “non-dependents” are taxed (generally at 16.5%). </li></ul></ul></ul>Superannuation death benefits are taxed differently depending on who receives them
  41. 45. <ul><ul><li>Problem - bulletproof your relationship </li></ul></ul><ul><ul><li>Bulletproof solution – think ahead ! </li></ul></ul>
  42. 46. In a breakup what happens to: <ul><ul><ul><ul><li>Joint assets – change your will! </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Superannuation – change your nomination! </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Inheritance </li></ul></ul></ul></ul>
  43. 47. <ul><ul><li>The bulletproof lesson – consider a financial or cohabitation agreement </li></ul></ul><ul><ul><li>Never too late </li></ul></ul><ul><ul><li>Get legal advice as soon as you separate </li></ul></ul>
  44. 48. <ul><ul><li>Financial Agreements under the Family Law Act </li></ul></ul><ul><ul><li>Cohabitation Agreements </li></ul></ul><ul><ul><li>The bulletproof view – it is insurance </li></ul></ul>
  45. 50. Asset Protection <ul><li>An asset protection plan will be more likely to fail if it is set up solely to defeat creditors and others to whom you owe a financial responsibility (including ex-spouses) </li></ul>
  46. 51. Consider a family trust <ul><ul><li>Discretionary distribution </li></ul></ul><ul><ul><li>At the discretion of trustee </li></ul></ul><ul><ul><li>Appointor is boss </li></ul></ul>
  47. 52. Family Trust <ul><ul><li>Low cost and simple structure </li></ul></ul><ul><ul><li>Protection from bankruptcy and insolvency </li></ul></ul><ul><ul><li>Distribute income to family members who are on low tax rates </li></ul></ul><ul><ul><li>Gives children the benefit of funds without losing control of them </li></ul></ul><ul><ul><li>Creates a framework/pathway for the family’s future </li></ul></ul>
  48. 53. Family trust for asset protection <ul><ul><ul><li>The bulletproof value – beneficial interest not ownership </li></ul></ul></ul><ul><ul><ul><li>Corporations Act definition – “expectancy” </li></ul></ul></ul><ul><ul><ul><li>Be wary of recent court decisions – alter ego test </li></ul></ul></ul><ul><ul><ul><li>Don’t buy off internet – get professional advice </li></ul></ul></ul>
  49. 54. Simplified Superannuation <ul><ul><ul><li>Reasonable Benefits Limit </li></ul></ul></ul><ul><ul><ul><li>Watch out for clawback – section 128B (no time limit) </li></ul></ul></ul><ul><ul><ul><li>Out of character transactions – create pattern of savings </li></ul></ul></ul>
  50. 55. Avoiding creditors & clawback <ul><ul><li>Section 120 - undervalued transactions to “related entities” </li></ul></ul><ul><ul><li>Section 121 - assets transferred to defeat creditors </li></ul></ul><ul><ul><li>Using Binding Financial Agreements </li></ul></ul>
  51. 56. Bulletproof lessons <ul><ul><li>The best time to implement asset protection is when it is not needed </li></ul></ul><ul><ul><li>Correct choice of structure important before acquiring assets </li></ul></ul><ul><ul><li>Any strategy where the obvious primary focus is ‘asset protection’ could be at risk of failure </li></ul></ul>
  52. 57. <ul><li>Putting It All Together – The Bulletproof Action Plan </li></ul>
  53. 58. Ten Life Events: <ul><ul><ul><li>You reach adulthood </li></ul></ul></ul><ul><ul><ul><li>You begin your career </li></ul></ul></ul><ul><ul><ul><li>You get married or enter into a de facto relationship </li></ul></ul></ul><ul><ul><ul><li>You buy a house </li></ul></ul></ul><ul><ul><ul><li>You start a business </li></ul></ul></ul><ul><ul><ul><li>You have children </li></ul></ul></ul><ul><ul><ul><li>Your children reach adulthood </li></ul></ul></ul><ul><ul><ul><li>You have grandchildren </li></ul></ul></ul><ul><ul><ul><li>You divorce/separate </li></ul></ul></ul><ul><ul><ul><li>You retire </li></ul></ul></ul>
  54. 59. You Have Children <ul><ul><ul><li>Review an existing will </li></ul></ul></ul><ul><ul><ul><li>Is a testamentary trust appropriate to take advantage of tax concessions and assist in funding their education? </li></ul></ul></ul><ul><ul><ul><li>Get a financial enduring power of attorney </li></ul></ul></ul><ul><ul><ul><li>Get an enduring power of guardianship </li></ul></ul></ul><ul><ul><ul><li>Is there an opportunity to establish a family trust to benefit children? </li></ul></ul></ul><ul><ul><ul><li>Now is the time to look carefully at income insurance </li></ul></ul></ul><ul><ul><ul><li>Check underinsurance </li></ul></ul></ul><ul><ul><ul><li>Have you made appropriate superannuation death benefit nominations? Remind yourself that your minor children are tax dependents as well as superannuation dependents </li></ul></ul></ul>