“I wholeheartedly recommend this book that actually makes the law interesting and understandable” Derryn Hinch 3AW

“This is a book every family should read now rather than later.” Sydney Morning Herald

“Geoffrey Winn doesn't tell you how to become rich, but he does offer something the rich have: peace of mind, secure in the knowledge that you are as protected as you can legally be. Great book.“ Dan’s Fiction (five star site)

“Geoffrey Winn wants to help you take control of your life.” InvestSmart 

“This book will help you avoid nasty financial surprises.” The Age

Protecting yourself, your family and your assets =

empowerment

Ask hard questions about your financial and legal affairs

NOW

Bulletproof frame of mind = different perspective

Proactive – not reactive

Everything Changes !!!

The Bulletproof prescription for stress relief and the “lack of power principle”

Lack of control = stress

Simple Elegant Organised

When it comes to the law, simplicity is power

Learn from others – what LawMatch taught me

What you can learn from other’s experience

Rich people don’t worry when the refrigerator breaks down

Peace of mind is your highest goal –

see the Big Picture

Power of attorney – financial, health & lifestyle

Estate planning

Insurance

Public liability

Financial agreement

Superannuation

Asset protection

Bulletproofing is a question of values

What are the values that I want to pass on to those for whom I am responsible?

Most people don’t have legal problems - they have simply failed to avoid having the problem in the first place

Plan Your Estate

You always need a will

Don’t undervalue your true wealth

More than a mere transfer of assets

What are the values that I want to pass on to those for whom I am responsible?

Bulletproof value - don’t inflict chaos on loved ones

Estate v Non-Estate Assets – traditional view

What’s the difference? Why is this important?

How to use it to your advantage

Think about a testamentary trust - endless flexibility for accountants and financial planners.

What is a trust?

• Will → beneficiaries

• Testamentary Trust → trustee → beneficiary

• Beneficiaries = right to be considered (discretionary)

Why is this structure useful?

Tax

Streaming

Children’s Marriages

CGT

Professional exposure

Bankruptcy

Disability – note Special Disability Trust

Spendthrift child

Pitfalls

Ongoing administrative issues - is estate sufficient to

warrant the trust?

Adequate funding - boost with superannuation + insurance

No privacy

Laws change – e.g. 2002 Centrelink assets test change

Capacity

It’s a lot easier to lose assets than it is to accumulate them

The First Line Of Defence – Insurance

Damage or loss to your home

Loss of home contents

Damage to someone else’s property

Damage to your motor vehicle (or someone else’s)

Injury to someone else

Public liability

Personal accident

Temporary or permanent disability and sickness

Get adequate replacement insurance

ACT bushfires

The components of the total cost of rebuilding

Improvements

Renovations

Inventory

Don’t use rates notice

Take account of rising home building costs

Review, review, review

• Be wary of averaging clauses – why your family heirlooms are only insured for half their value

• Public liability insurance – does your dog bite?

Flood Insurance

Not part of most house and contents insurance

Flood and other types of water damage may be treated

differently by your insurer

What is your most valuable asset?

Protect your income Your age – younger may be better

What you can afford?

How much do you need?

Do you have any equivalent cover?

What is covered – injury &/or sickness

"Pre-existing" illnesses?

PROBLEM – how to bulletproof decisions about your health, your finances and your lifestyle

BULLETPROOF SOLUTION - use the law to your advantage

Powers of attorney

• General

• Enduring financial (“enduring” = bulletproof issue)

• Enduring medical

• Enduring guardianship

Guardian appointed by Tribunal

v. Enduring Guardian

= crucial bulletproof difference

• Ageing parents

• What to discuss about their decision-making needs

for the future.

Do It Yourself

NSW Office of the Public Guardian www.lawlink.nsw.gov.au/opg

Phone 1800 451 510

Superannuation – a regulated

environment

After I die my superannuation: A. Goes to my family

B. An asset that is part of my will

C. Continues to exist without me

Superannuation Death Benefits

“Death benefit” = balance super account plus life insurance

Binding or non-binding nominations

Who is eligible to receive your superannuation after you die?

A. Your spouse

B. Your de facto spouse

C. Your former spouse

D. Children who are dependent on you

E. Adult children who are not dependent on you

F. Your mother-in-law who lives with you and has

no other means of support

Who is a “dependent”?

• a spouse or de facto spouse; or

• a child; or

• any person financially dependent on you; or

• somebody with whom you had an “interdependent”

relationship.

.

For tax purposes:

• super benefits paid to dependants are tax-free• benefits paid to “non-dependents” are taxed (generally

at 16.5%).

Superannuation death benefits are taxed

differently depending on who receives them

Problem - bulletproof your relationship

Bulletproof solution – think ahead!

In a breakup what happens to: Joint assets – change your will!

Superannuation – change your nomination!

Inheritance

The bulletproof lesson – consider a financial or cohabitation agreement

Never too late

Get legal advice as soon as you separate

Financial Agreements under the Family Law Act

Cohabitation Agreements

The bulletproof view – it is insurance

Asset Protection

An asset protection plan will be more likely to fail if it is set up

solely to defeat creditors and others to whom you owe a

financial responsibility (including ex-spouses)

Consider a family trust

Discretionary distribution

At the discretion of trustee

Appointor is boss

Family Trust

Low cost and simple structure

Protection from bankruptcy and insolvency

Distribute income to family members who are on low tax rates

Gives children the benefit of funds without losing control of them

Creates a framework/pathway for the family’s future

Family trust for asset protection

The bulletproof value – beneficial interest not ownership

Corporations Act definition – “expectancy”

Be wary of recent court decisions – alter ego test

Don’t buy off internet – get professional advice

Simplified Superannuation

• Reasonable Benefits Limit

• Watch out for clawback – section 128B (no time limit)

• Out of character transactions – create pattern of savings

Avoiding creditors & clawback

Section 120 - undervalued transactions to “related

entities”

Section 121 - assets transferred to defeat creditors

Using Binding Financial Agreements

Bulletproof lessons The best time to implement asset protection is when it is not

needed

Correct choice of structure important before acquiring

assets

Any strategy where the obvious primary focus is ‘asset

protection’ could be at risk of failure

Putting It All Together – The Bulletproof Action Plan

Ten Life Events:

• You reach adulthood

• You begin your career

• You get married or enter into a de facto relationship

• You buy a house

• You start a business

• You have children

• Your children reach adulthood

• You have grandchildren

• You divorce/separate

• You retire

You Have Children

Review an existing will Is a testamentary trust appropriate to take advantage of

tax concessions and assist in funding their education? Get a financial enduring power of attorney Get an enduring power of guardianship Is there an opportunity to establish a family trust to

benefit children? Now is the time to look carefully at income insurance Check underinsurance Have you made appropriate superannuation death

benefit nominations? Remind yourself that your minor children are tax dependents as well as superannuation dependents