15 Estate Planning Mistakes 26032011

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Presentation on not what to do with your estate planning

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15 Estate Planning Mistakes 26032011

  1. 1. Family succession planning: common 15 mistakes Matthew Dunstone Matthew Dunstone is an Authorised Representative of RI Advice Group Pty Ltd
  2. 2. Disclaimer <ul><li>Important Notice </li></ul>RI Advice Group Pty Ltd, ABN 23 001 774 125, holds Australian Financial Services Licence Number 238429 and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts. The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.
  3. 3. RI Advice Group: our credentials <ul><li>Experienced </li></ul><ul><ul><li>Over 30 years experience </li></ul></ul><ul><ul><li>Over 80,000 clients </li></ul></ul><ul><ul><li>Over $10b under advice </li></ul></ul><ul><li>Professional personal advice </li></ul><ul><li>Advice underpinned by quality research and technical teams </li></ul><ul><li>Over 110 offices nationwide </li></ul><ul><li>Global company </li></ul>
  4. 4. Agenda <ul><li>What is Family Succession Planning ? </li></ul><ul><li>15 most common mistakes - Family Succession Planning </li></ul><ul><li>What can go wrong ? - Peter Brock ‘s legacy </li></ul><ul><li>The cost of getting it wrong </li></ul><ul><li>Taxation considerations </li></ul><ul><li>Other important considerations </li></ul><ul><li>Our Family Succession Planning service </li></ul>
  5. 5. What Is Family Succession Planning? <ul><li>Ensuring that, no matter when: </li></ul><ul><li>… the right assets (in quantum and form) ... </li></ul><ul><li>… go to the right people (where and to whom)… </li></ul><ul><li>... at the right time … </li></ul><ul><li>… in the right manner (i.e. free from disputes)… </li></ul><ul><li>… net of the right tax (as little as possible). </li></ul>
  6. 6. 15 most common mistakes – Family Succession Planning <ul><li>Not leaving a Will </li></ul><ul><ul><li>45% of Australians die without a Will * </li></ul></ul><ul><li>Not providing for your dependants </li></ul><ul><ul><li>- dependants not ‘adequately provided for’ from your estate may contest your Will </li></ul></ul><ul><li>Being ambiguous </li></ul><ul><li>* Australian Bureau of Statistics </li></ul>
  7. 7. 15 common mistakes… FIVE THOUSAND DOLLARS ($25,000) to the sons of my husband’s brother whose name I believe is XXXX, my husband having lived in the town of XXXX Germany. An ambiguous Will
  8. 8. 15 common mistakes… <ul><li>4. Not specifying debts to be paid </li></ul><ul><li>5. Not taking tax into account </li></ul><ul><li>- capital gains tax </li></ul><ul><li>- tax on superannuation benefits paid to non-dependants </li></ul><ul><li>6. Writing an ‘informal’ Will </li></ul>
  9. 9. <ul><li>7. Not nominating Guardians </li></ul><ul><li>8. Bequeathing assets you don’t ‘own’ </li></ul><ul><li>- jointly owned assets </li></ul><ul><li>- property held in trust, </li></ul><ul><li> - business partnership property, </li></ul><ul><li>- proceeds of life insurance policies, </li></ul><ul><li> - your superannuation </li></ul><ul><li>9. Assuming your super will bypass your estate </li></ul>15 common mistakes…
  10. 10. 15 common mistakes… <ul><li>10. Using beneficiaries as witnesses </li></ul><ul><li>- avoid having beneficiaries or their spouses witness your Will </li></ul><ul><li>11. Appointing a beneficiary as executor </li></ul><ul><li>12. Not granting adequate power to executors </li></ul>
  11. 11. 15 common mistakes… <ul><li>13. Not communicating with your executors and beneficiaries </li></ul><ul><li>14. Not making provision for a residue </li></ul><ul><li>15. Not keeping your Will up-to-date </li></ul><ul><ul><li>estate assets and non-estate assets change </li></ul></ul><ul><ul><li>families and family dynamics change </li></ul></ul><ul><ul><li>needs and responsibilities change </li></ul></ul><ul><ul><li>laws change </li></ul></ul><ul><ul><li>goals and objectives change </li></ul></ul>
  12. 12. What can go wrong ? <ul><li>Peter Brock’s legacy: a ‘Panorama of chaos’ </li></ul><ul><li>During his racing career Peter Brock was firmly in control as his many victories clearly demonstrated </li></ul><ul><li>But ……upon his death (September 2006), his family found that he had lost control of his personal financial affairs </li></ul>
  13. 13. What can go wrong ? <ul><li>Peter Brock’s legacy: a ‘Panorama of chaos’ </li></ul><ul><li>He lived a complicated personal life </li></ul><ul><li>He left a complicated estate with no clear, unambiguous will – he in fact left three Wills! </li></ul><ul><li>Led to Supreme Court proceedings at great financial and emotional expense to his family </li></ul>
  14. 14. The cost of getting it wrong <ul><li>Family disputes </li></ul><ul><li>Legal fees </li></ul><ul><li>Delayed distribution </li></ul><ul><li>Unhappy beneficiaries </li></ul><ul><li>Tax liability </li></ul>
  15. 15. Taxation considerations <ul><li>Keep accurate records </li></ul><ul><li>Offset capital gains against losses </li></ul><ul><li>Bequeath CGT assets to low marginal tax beneficiaries </li></ul><ul><li>Consider use of testamentary trusts </li></ul><ul><li>Specify donations to be net of tax - or to go to an approved foundation or registered charity </li></ul><ul><li>CGT implications for non resident beneficiaries </li></ul>
  16. 16. <ul><li>Whilst only 55% of us have Wills, a far lesser portion have Wills that are as effective as they could be. For instance ... </li></ul><ul><li>Blended Families </li></ul><ul><li>You should consider trusts as they can provide for your: </li></ul><ul><ul><li>children </li></ul></ul><ul><ul><li>new partner </li></ul></ul><ul><ul><li>non-blood children </li></ul></ul><ul><ul><li>the ‘ex’ spouse/partner </li></ul></ul>Other important considerations
  17. 17. <ul><li>Superannuation </li></ul><ul><li>Death Benefit Nominations </li></ul><ul><ul><li>may also be used to direct your superannuation monies appropriately </li></ul></ul><ul><ul><li>binding v non-binding nominations </li></ul></ul>Other important considerations
  18. 18. Our Family Succession Planning service <ul><li>Protect your loved ones with a plan with: </li></ul><ul><li>the right funds for lifestyle maintenance, children’s education, debt cancellation </li></ul><ul><li>in the right hands - partner / spouse, children, grandchildren, charities, minimise tax </li></ul><ul><li>at the right time – a mix of immediate, medium and long term needs </li></ul>
  19. 19. Our Family Succession Planning service <ul><li>Part of a comprehensive review of your financial situation: </li></ul><ul><ul><ul><li>now </li></ul></ul></ul><ul><ul><ul><li>and your family’s future </li></ul></ul></ul><ul><li>We work with a panel of lawyers who are specialists in the field of family succession planning </li></ul><ul><li>** ADD TO or AMEND THIS SLIDE as appropriate for our service </li></ul>
  20. 20. Our Family Succession Planning service <ul><li>Questions? </li></ul>
  21. 21. Thank you for attending Matt Dunstone - General Manager RI Surrey Hills 400 Canterbury Road, Surrey Hills 9836 4744

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