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Advisor prompts for Estate Planning referrals

Triggers and prompts to discuss estate planning.

  1. Where there is no Will
  2. New relationship or marriage
  3. Arrival of children
  4. Separation and divorce
  5. On retirement or retirement planning
  6. New entity created such as SMSF or family discretionary trust
  7. Change of employment circumstances; company directorships etc
  8. New life insurance applications
  9. Superannuation nomination advice required
  10. Travel
  11. Natural disasters or terrorism events
  12. Unexpected death of a friend or relative
  13. Prompts for updating of an existing Will include where:
  • an executor dies or becomes unwilling or unable to act as executor
  • if beneficiaries should die
  • if the Will has specifically left any property which you subsequently dispose of or which changes in character; this applies particularly to specifically bequeathed shares in a company which restructures its share capital
  • where 5 or more years have passed since the Will was last reviewed.

NOTES:

  • A client should not attempt to alter their Will by writing on the original version. A Will should only be changed by the making of a new Will or a Codicil to the Will – solicitors should be consulted.
  • An Estate Planner will generally discuss Powers of Attorney (Financial, Medical and Guardianship: to address incapacity risks) when discussing client needs.

TDT (Testamentary Discretionary Trust)
Wills: When relevant and advice should be taken

Couples with dependent children, where assets and/or life insurance (within or outside Superannuation) are sufficient; for example:

  • where a surviving spouse may be left with investible assets in excess of $500,000
  • grandparents or expectant grandparents with substantial accumulated assets (whose children may have dependent children when they inherit)
  • where intended beneficiaries are in a high-risk occupation category and may require asset protection
  • where the family home is in the name of one spouse only

The advantages of TDT Wills principally include:

  • potential taxation advantages for the primary beneficiary of each Trust, providing cumulative savings (by reducing taxation) of up to $20,000 per annum. (This is particularly the case for a beneficiary with dependent children or where the beneficiary intends to advance funds for the support and education of grandchildren)
  • protection of the assets of each trust in the event of the primary beneficiary’s bankruptcy or loss of personal capacity and to some degree, in the event of separation and/or remarriage

An individual, personally controlled TDT is often the most advantageous and effective structure for a beneficiary holding substantial inherited and income generating assets. Generally, wills should be flexible to allow choice as to the extent of funds that would fall into a TDT, so that any other suitable financial strategies can be looked at to suit the needs of each primary beneficiary at the time of their inheritance.

Where appropriate, TDT’s can also act as a special residence trust in the Will of one spouse, which would enable the other spouse to control the residence through the TDT, while retaining asset protection advantages and the personal residence exemption from capital gains tax.

NOTES:

  • TDT Wills can be unsuitable for elderly clients due to the complexities involved.
  • Refer separate flier on options for Blended Families.

As experts in this area Russell Kennedy regularly distributes information and hosts seminars on this topic. To subscribe to our mailing list please click on 'Join our industry mailing lists' at the bottom of this page.