Estate Planning Presentation

GB Legal Services www.gblegalservices.com

www.gblegalfnq.comwww.assetandpropertyprotection.com.au

www.trustdeedregister.com.au

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

0409813622 / 0423 203 630Solicitor, Estate Planning Adviser

Email atees@legalexchange.com.au

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 = Asset Protection“

• 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 Before/After Death)

– 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 ) *Optional Testamentary Trusts ( Trusts created after

death) Family Trusts ( * Succession ) Self-managed superannuation funds (S.MS.F.) Business succession planning.(a “will” for a Business

) Protecting Family Assets in a Business (P.P.S.R.) Utilising Pre and Post Nuptial Agreements ( B.F.A.)

Asset Protection -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 Referrers

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

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

A different recommended More Effective way to operate . 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 = Effective Collaboration.

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

Basics – No Will ? – No Power of Attorney ? Consequences / Solutions , Avoid Problems and more angst/”Business Chaos” at a time of Grieving• No Will/Intestacy :means you dont choose who recieves

your property/assets ;- The Succession Act Formula will apply

• Business Succession Agreements wont work• Intestacy = 3 x amount of delay + Legal Costs!• Spouses/Children suddenly have no money• Superannuation Pay outs can be delayed

• Solutions ; see a Lawyer get a Temporary Will Form Done ! Incapacity – Powers of Attorney (Wills only operate after death !) Companies – Appoint Alternate Directors?

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

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

Optional Discretionary Testamentary

Trust

!

E

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 - a

House/Property/Inheritance• 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 Referree

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 - “A Non Estate Asset”

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/Executor of the Estate(* 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/Executor as beneficiary,

Insurance(s) Nominate LPR/Executor as beneficiary

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

*Incapacity -Don’t forget Enduring Powers of Attorney

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

REGISTER WILLS /Store Register Trust/SMSF Trust Deeds

Thank You ! – Optimal Process

Any Questions ? Tel Alex Tees , Skype “alextees” 0409813622 / 07 4033 7652 / 02 9281 3230 Email atees@legalexchange.com.au Email After Hrs atees@bigpond.com

Process ; www.assetandpropertyprotection.com.au

1. Get Facts Straight – List Assets/Property2. Consult with Clients’ Accountant, Financial Planner = “Collaboration”3. Interview to Confirm instructions4. Explanation/Signing Interview5. Optional Family Meeting ? www.gblegalservices.com www.gblegalfnq.com