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Estate Planning for Advisers

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Topics include:
- Estate Planning considerations for clients with structures
- How Testamentary Trusts work
- Estate Planning for accountants and advisers - building the service into your practice and avoiding legal risks

Published in: Law
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Estate Planning for Advisers

  1. 1. Wednesdays With Redchip WELCOMETO
  2. 2. Estate Planning for Advisers PLAYNA HO PlaynaH@redchip.com.au
  3. 3. Are you ready for the Endgame?
  4. 4. Death 160,909people died in Australia (2017) 52% Male 48% Female Heart Disease Dementia Cerebrovascular Disease (inc. Stroke) Respiratory Disease (inc. Lung Cancer) Leading causesof death (2017) are:
  5. 5. Leading causesof death by age: Ages 75 and older: heart disease, dementia, Alzheimer’s disease Ages 65-74: lung cancer, heart disease Ages 45-64: heart disease, lung cancer Ages 25-44: suicide, accidental poisoning Ages 15-24: suicide, land transport accidents Ages 1-14: land transport accidents Infants: perinatal and congenital conditions
  6. 6. Why? $2.4 trillion 3.3 million Australians aged 65 and over in 2013 and that will double by 2055 40% of Australians do not have a Will 1. Zurich 2015 Intergenerational Report 2. ING DIRECT The Truth About Gen X and Gen Y 2016 3. Money Management, Laying Estate Planning Fears to Rest 2017
  7. 7. Avoid Civil War: • Dying intestate: • Costs • Delays • Disappointed beneficiaries • Estate litigation
  8. 8. The Stark Family Tony Pepper
  9. 9. Penthouse Shares Life Insurance Policy Shares Tony Pepper Stark Family Super Fund Trustees: Tony & Pepper Members:Tony & Pepper Structures Stark Family Trust Stark Enterprise Pty Ltd Director:Tony Shareholders: Tony Primary Beneficiaries:Tony, Pepper Principal:Tony Stark Industries Pty Ltd Director:Tony Shareholders: Stark Enterprise Pty Ltd 50% Tony50%
  10. 10. Personal Assets Slide 10 Penthouse Shares Life Insurance Policy Shares Tony Pepper
  11. 11. Companies Slide 11 Stark Family Trust Stark Enterprise Pty Ltd Director:Tony Shareholders: Tony Primary Beneficiaries:Tony, Pepper Principal:Tony Stark Industries Pty Ltd Director:Tony Shareholders: Stark Enterprise Pty Ltd 50% Tony50%
  12. 12. Trusts Slide 12 • Read theTrust Deed • Passing on control • Powers of theTrustee and Principal/ Appointor Stark Family Trust Stark Enterprise Pty Ltd Director:Tony Shareholders: Tony Primary Beneficiaries:Tony, Pepper Principal:Tony
  13. 13. Superannuation Slide 13 • Read the Super Deed • Binding Death Benefit Nomination • Who are Super Dependents • Passing control Stark Family Super Fund Trustees: Tony & Pepper Members:Tony & Pepper
  14. 14. TestamentaryTrusts Tony Pepper Morgan 5 years old Morgan Stark Testamentary Trust Trustee: Happy Hogan Principal: James Rhodes Primary Beneficiary: Morgan Stark • Protect inheritance for “at risk” beneficiaries • Children • Creditors/bankruptcy • Mismanagement • Family court proceedings • Tax savings
  15. 15. Best Interests Duty “The provider must act in the best interests of the client in relation to the advice.” Section 961B (1) Corporations Act
  16. 16. Sec 961B (2): Safe Harbour provisions ASIC Regulatory Guide 175 RG 175.333 Recommendations about a financial product may not fully meet the client’s relevant circumstances in all cases. In some cases, complying with the best interests duty will require an advice provider to give the client advice that is not product specific—for example, advice on debt levels, Estate Planning or Centrelink benefits. RG 175.382 The conflicts priority rule means that:… (d) an advice provider must recommend non-financial product solutions relevant to the client’s situation, where appropriate, even if this means the client is less likely to need financial advice in the future (e.g. advice on debt reduction, Estate Planning and/or Centrelink benefits). Best Interests Duty
  17. 17. From ASIC’s perspective: 1. Your obligations extend beyond just giving financial advice and advice about financial products 2. Your obligations may include giving Estate Planning advice Slide 17
  18. 18. Estate Planning for Your Business IANTINDALE IanT@redchip.com.au
  19. 19. What’s in it for you? • Enhance client relationships • Introduce new revenue stream – you can charge your clients to assist them through the process • Meet the next generation
  20. 20. The Estate Planning Process Slide 21 Step 1 Data Collection Step 2 Collate Data Step 3 Devise Strategy Step 4 Prepare and finalise Estate documents
  21. 21. You are the client’s best option • Already familiar with clients’ personal circumstances as the trusted adviser • They don’t like talking to lawyers • No regulation prohibiting you from talking about Estate Planning • But don’t give legal advice Slide 22
  22. 22. What is legal advice? Slide 23 Step Action Is it legal advice? Step 1 Data Collection Collecting client information is not legal advice – advisers do this every day. No Step 2 Collate Data Collating information and preparing a report to be used by a lawyer is not the provision of legal advice. No Step 3 Devise Strategy Making recommendations about legal documents the client may require is legal advice. Discussing what aTestamentaryTrustWill is and how it works is not legal advice, however telling your clients they need one is legal advice. Referring clients to a lawyer and supplying an Estate Plan draft is not giving legal advice. Maybe Step 4 Finalise Documentation PreparingWills and other Estate Planning documents is giving legal advice Yes
  23. 23. Approaching Estate Planning • Complex issues and technical solutions but a simple process • Build process inside your practice • Have a dedicated client meeting to discuss Estate Planning issues • Have checklists and a template Estate Planning document • Build a relationship with a lawyer & get them involved early • Understand the value you bring and know how you can explain it to your client • Decide your financial model and how you can recover costs Slide 24
  24. 24. To do’s • Choose a lawyer that specialises in Estate Planning. ➢ Ability to prepareWills does not mean they specialise in Estate Planning. • Before providing information to the lawyer, get an authority from client to share their personal information. • Get a client authority directing lawyer to copy you in on relevant correspondence and provide copies of draft and final Estate Planning documents. • Arrange initial meeting between client, lawyer and yourself. • Project manage the process until completion. Slide 25
  25. 25. Estate Planning software • Your Estate Planning practice needs to be process driven to be cost-effective. • Have systems in place to make this as easy for you and your staff as possible. • Some advisers have built their own processes and templates for the plans they prepare. • The smart advisers subscribe to Slide 26
  26. 26. Estate Planning with Yodal Step 1 Complete the Needs Assessment Step 2 Quote & Payment Step 3 Collect Data in the Questionnaire Step 4 Send to Lawyer
  27. 27. Step 1 Complete the Needs Assessment Estate Planning with Yodal
  28. 28. Step 1 Complete the Needs Assessment Step 2 Quote & Payment Step 3 Collect Data in the Questionnaire Step 4 Send to Lawyer Estate Planning with Yodal
  29. 29. Step 2 Quote & Payment Estate Planning with Yodal
  30. 30. Step 1 Complete the Needs Assessment Step 2 Quote & Payment Step 3 Collect Data in the Questionnaire Step 4 Send to Lawyer Estate Planning with Yodal
  31. 31. Step 3 Collect Data in the Questionnaire Estate Planning with Yodal
  32. 32. Step 1 Complete the Needs Assessment Step 2 Quote & Payment Step 3 Collect Data in the Questionnaire Step 4 Send to Lawyer Estate Planning with Yodal
  33. 33. Step 4 Send to Lawyer Estate Planning with Yodal
  34. 34. Once sent to the lawyer they can log in and generate draft documents
  35. 35. Once sent to the lawyer they can log in and generate draft documents
  36. 36. Because everyone needs a plan.
  37. 37. Questions? Slide 41
  38. 38. 17 July: Property & BusinessTransactions NEXT EVENTS
  39. 39. Wednesdays With Redchip THANKS FOR ATTENDING

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