Two minute scenarios...
Ensuring fairness amongst children and family law concerns are two issues that are often uppermost in clients' minds when it comes to their estate planning.
Loans to children...
Clients: David & Jenny are married with three children. They have provided their eldest child Jarrod with $100,000 to help buy an apartment. They will do the same for the other two when the time comes.
Objective: The clients want to make sure that if they die before the other two children each receive $100,000 that their Will takes care of it. They are also concerned that Jarrod's girlfriend may get a share of the $100,000 if they were to break up.
Solutions: To help protect the $100,000, a loan agreement should be put in place - it can be interest free and repayable at call. If Jarrod was to break up from his partner the $100,000 would not be considered part of his assets. If the executor is given the power to write-off any loans to beneficiaries, Jarrod can keep the money and an estate adjustment clause in the Will ensures that the other children receive a compensating sum of money from the estate .
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Family trusts and estate planning...
Client: Judith and Bernard run a $3m business installing solar panels. It is owned by their family trust. They also own their own home worth $1.5m and have $1.5m in Super. They have one daughter, Renae who works in the business, and two sons. The two sons have their own plumbing business.
Objective: Like most clients, Judith and Bernard want to ensure their three children all receive an equal sum of money if they were to die. The problem is the business, which is owned by the family trust, is worth more than a third of their total assets. What can they do?
Solution: Renae will be given control of the family trust ie she will take over the Appointor role. However that role is only transferred on condition that Renae pays her two brothers the difference between the business value and the rest of the estate assets such that they each receive a third of the total value. The Will can provide for this to be made payable over time if required. A Binding Death Nomination will ensure the two sons receive the Death Benefits.
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The son-in-law....
Client: Andy and Sofia had two daughters who were both married with children. They mentioned their concern about the possibility of the youngest daughter divorcing.
Objective: They wanted to make sure that when they died their son-in-law would not have access to their daughter's inheritance.
Solution: Unfortunately an inheritance in a discretionary testamentary trust controlled by a beneficiary is not necessarily protected in a Family Law settlement. However by having Wills drafted with discretionary testamentary trusts their daughter would be able to more easily keep her inheritance separate from the rest of the family assets. If she did divorce the Family Law Court would be able to easily identify what she had brought to the relationship when deciding on the split of family assets ie her contribution would be more easily identifiable than if it was left to her in her own name and mixed up with the family assets.
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Would you like to generate an extra $2000* per day?
Our Alliance Partners can earn a minimum of $2000 per day (*for many it is double this figure) by providing their clients, with our help, an estate planning service. Others are generating fees in the Business Succession Planning area - the revenue there can be much higher depending on the insurance written.
If you want to know more please contact us and we will send you an information pack on our Alliance Partner model. .
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