Estate Planning Presentation
www.probatewilllawyersaustralia.com
“Before and After…”
Alex Tees, Tel 02 9281 3230/0409813622
Solicitor, Estate Planning Adviser
Email atees@bigpond.com 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.
“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)
– 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 Planners
 Provision 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
The Efficient Will – *Possible use of Trusts after
Death………..
E
EXECUTOR
Trustee
Trustee Primary
Beneficiary
(Surviving
Spouse/
Children)
WILL
Optional
Discretionary
Testamentary
Trust
Beneficiaries
include: ( THOSE
RECEIVING GIFTS )
 Primary Beneficiary
–Surviving
Spouse/Children
 Family Members
 Related Entities
! 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…….
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
• ASSETS
Home
Joint tenants
Investment
Property 1
Managed funds
Joint tenants
Shares
Direct property
SMSF (Self Managed Super’
Fund)
SMSF
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
Sever tenancy
Property 1
SMSF (Super
BDBN (Binding Death Benefit
Fund)
Nomination)
Case Study 2 – George & Marina
• STRATEGIE(S) - WILLS
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 “nonestate 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
1) Transition of control of Family Trust -Trust Deed Review
- Deed of Future Dealing / Alter Trust Deed
( to take in succession)
2) “The Business” Release of value in the business
– how to pass on to family
- 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
Trusts
2.Home - Sever Joint tenancy
3.Investment Prop - Sever Joint tenancy
4.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 minors
Executors discretions
Ability for younger
beneficiaries to
‘fritter-away’ wealth
Qualifying Age – eg 25
Estate conflicts –
Loans
Equalisation provisions
“Young Mens disease”(beware
“young ladies disease” as well
!)
Summary
 No two strategies are the same
 No two Testamentary Trusts are the same
 Strategy must be consistent and coherent across estate and nonestate 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’
Thank You ! – Reminder – Optimal Process
Any Questions ? Tel Alex Tees,
0409813622 / 02 9281 3230 atees@bigpond.com
www.legalexchange.com.au
Process ;
1) Get Facts Straight – List Assets/Property
2) Compare Notes with Clients Accountant, Financial
3)
4)
5)
Planner
Interview to Confirm instructions
Explanation/Signing Interview
Optional Family Meeting ?