ESTATE PLANNING PRESENTATION

Estate Planning Presentation

www.trustdeedregister.comwww.gblegalfnq.com

www.gblegalservices.comwww.assetandpropertyprotection.com.au

Email :[email protected]

“Before and After…” Alex Tees , Tel 07 4033 7652 02 92813230/

0409813622Solicitor, Estate Planning Adviser

Email [email protected] skype alextees

Important disclaimer

• 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.

Basics – No Will ? – Consequences / Solutions , Avoid Problems and more angst at a time of Grieving...........................• No Will/Intestacy :means you dont choose who

recieves your property/assets ;• - The Succession Act Formula will apply• Intestacy = 3 x amount of delay + Costs!• Spouses/Children suddenly have no money• Super’ Pay outs delayed• Solutions ; see a Lawyer get a Temporary

Will Form Done ! Incapacity – Powers of Attorney (Wills only operate after death !) (Call us 24hrs!?)

“MODERN SUCCESSION & ESTATE PLANNING “

• 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 :– Efficient intergenerational transfer of wealth with

harmony– Asset protection (Keeping out “Predators/Creditors”

& Keeping the Wealth in the Family )– Tax (at both State and Federal level)– Superannuation (Formation + Review of Deeds)– Trusts, (Formation + Review of Deeds) – safe storage (

www.trustdeedregister.com (.com.au) – registration ?– Investments/insurance structuring– Resolution of disputes and other issues through the use

of an “Independent Referree” – Dispute Resolution

WHAT Lawyers should DO in co-operation with Accountants and Financial PlannersProvision of strategies and advice in

collaboration with other professionals ( Accountants/Financial Planners) to deliver the optimum outcome(s) for client (s): Modern Estate Planning Strategies

( Before and after death ) Testamentary Trusts ( Trusts created after death) Family Trusts Self-managed superannuation funds (SMSF) Business succession planning.(a “will” for a

Business )

Estate Planning - HOW a Lawyer should and can OPERATE

Timeframes agreed with client and referrer at each stage to ensure efficient completion and accountability

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 )

Collaboration/Reporting to Accountant/Fin’Planner at each stage = Further Fee & protection opportunities..for you

Systematic and efficient delivery ( x 3 Meetings) Technical and client-related queries welcomed from all

Referrers/Client(s) Referral to other Specialist Tax Services

Why is it different ? - the way it is recommended to operate compared to OTHER LAW FIRMS ? 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)

Specialist Solicitors who understand and appreciate the Financial planning process, work together with Clients’ Financial Planners & Accountants.

Encourage First meetings/other meetings at Financial Planners/Accountants’ office and/or clients home/office.

Fixed price contracts (or Fixed Range) (Approx 75% Tax Deduction)

Comprehensive Estate Planning Portfolio / Folder. Delivery meetings can be Optional Family meetings

to include the children – builds bridges to next generation

A Modern Will – Creative use of Trusts after Death…(as well as * Other structures )• Will Maker/Testator makes a Will to flexibly

provide ;• Optional Testamentary Trust or other *Structures

created after Death (*Note Tax laws may change !?)

• “Beneficiaries” Persons receiving Money & Property , receive it via a Trust of which they or their Nominated Person become Trustee

• Provides Tax Efficiency and Assett Protection• * If the law changes Provision for Other Structures

such as Partnerships, Joint Ventures and different types of Companies/Corporations may be necessary…..

Example – Optional Trusts After Death

EXECUTOR

(May not be the same Person)

TRUSTEE (S)

TRUST TRUST TRUST

EXECUTOR WILL

The Efficient Will – *Possible use of Trusts after Death………..

Optional Discretionary Testamentary

Trust

!

E

Trustee

Beneficiaries include: ( THOSE RECEIVING GIFTS )· Primary Beneficiary

–Surviving Spouse/Children

· Family Members· Related Entities

Trustee - Primary Beneficiary(Surviving Spouse/Children)

B

Case Study 1 – Wealthy Woman marries a much less Wealthy Gentleman – Who Needs Protection ?

Assets and Possible Family Situation• ( Married or Unmarried)• Possibly have one child• Woman owns a House/Property• Woman a High income earner/ &

Wealthy• Perhaps the Husband will never have

a high income earning capacity

Case Study 1 - ESTATE PLANNING - WISHES & Concerns - Whose ? !!

• Protect the child if both or One Spouse dies

• Ensure Husband does not receive too much “loot” from His Wealthy Wife if she dies first ? ( & Protect the Child as well !)

• 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…

• Ensure Equity & Sensitivity …………

Case Study 1 -Possible Strategies• A Separate Care for the Spouse Trust for the Husband with

little wealth• A Separate Trust for the Husband with sufficient

Money/Property

• 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………)

• Recommend and Ensure the Husband owns Adequate & generous Life Insurance over the Life of his Wife in case she dies first…….

• * If the Partners are willing – Pre Nuptial/Post Nuptial Agreements

( very sensitive issues here !) – Binding Financial Agreements

Case Study 2 – George & Marina

George 55, Marina 54 - both retired

• Children ; Jessica 27 (De Facto), • Sarah , 22 (Married) • Jack 21, (Has a Disability, numerous

Partners)

Case Study 2 – George & Marina• ASSETSHome Joint tenants

Investment Property 1

Joint tenants

Managed funds

SMSF (Self Managed Super’ Fund)

Shares SMSF

Direct property

SMSF

Case Study 2 – George & Marina

• ESTATE PLANNING - Wishes & Concerns

George to Marina and vice versa in the first instance

Then equally to children

Specific protection required for Jack due to disability

Wealth to be retained in the family

Derive some tax efficiency

Case Study 2 – George & Marina

• Possible STRATEGIES

“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)

Case Study 2 – George & Marina

• STRATEGIE(S) - WILLS

Concern StrategyProtection 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’)

STRATEGIES – SMSF- Super’Funds

Concerns & Strategy

Maximise superannuation benefits during lifetime, potential inability of survivor to recontribute to super

- Use “Reversionary” pensions Optimising tax with protection(*BDBN = Binding Death Benefit Nomination) - Cascading

*BDBNs - first, reversionary - then, *LPR(* Legal Personal Representative ) Ongoing control of SMSF -Corporate Trustee appropriate ?

Other Possible Strategies – Some “Non Estate Property” – Family Trusts /Super’

Concerns & Strategy (Wills may not Work!)

1) Transition of control of Family Trust -Trust Deed Review

- Deed of Future Dealing / Alter Trust Deed ? ( to take in succession) see

www.trustdeedregister.com

2) “The Business” Release of value in the business – how to pass on to family- “Buy/Sell” Agreements ;- Business Succession Agreement – “A Will for a

Business”

3) Superannuation Nominate LPR as beneficiary, Insurance(s) Nominate LPR as beneficiary

Case Study 3 – Simpler Case

• FAMILY SITUATION• Jack, 53 & Jill 49 - both still working

• 4 children : Mark 23 … single (Jacks child first marriage)

Steve 21 … single, (Jacks child first marriage)

Marina 20 … De Facto (Jills child 1st marriage )

Helena , Age 3 (Jack & Jills child 2nd Marriage)

Case Study 3 Jack & Jill - Assets

Home - Joint tenants

Investment property – Joint Tenant

SMSF (Self Managed Super’ Fund)

Shares SMSF

Jack & Jill (not over the Hill) (3)• Possible ESTATE PLANNING

WISHES & Concerns

Jack to Jill and vice versa in the first instance

Then equally to children

Specific protection required for Helena due to young age

Keep wealth in Family ;Wealth to be retained in the family

Derive some tax efficiency

After Jack & Jill Die …. (3)

Some Strategies :1.Estate Assets Optional Testamentary

Trusts2.Home - Sever Joint tenancy3.Investment Prop - Sever Joint

tenancy4.SMSF (Super Fund) - BDBN (Binding Death Benefit Nomination(s)

General Wills Strategies• STRATEGIES – WILLS (cont)Concern Strategy

Tax efficiency Trust structure - income splitting properties - 102AG concessions for minorsExecutors 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

Summary

No two strategies are the same

No two Testamentary Trusts are the same

Strategy must be consistent and coherent across estate and non-estate assets

Must be a collaborative approach –Advisers/Lawyers

Don’t forget Enduring Powers of Attorney /Guardianship

Specialist strategy and intellectual property – no ‘one size fits all’

REGISTER WILLS /Store Register Trust/SMSF Trust Deeds

Thank You ! – Reminder – Optimal Process

Any Questions ? Tel Alex Tees, skype alextees 0409813622 / 02 9281 3230 [email protected] QLD 07 4033 7652 www.gblegalservices.comProcess ; www.assetandpropertyprotection.com.au

1) Get Facts Straight – List Assets/Property2) Compare Notes with Clients’ Accountant,

Financial Planner3) Interview to Confirm instructions4) Explanation/Signing Interview5) Optional Family Meeting ?