It's impossible to over emphasise the huge financial benefits to families of working together when planning their financial affairs.

Most families do not plan, and the Australian Taxation Office thanks you for your generosity in contributing more of your income than is necessary.

Today's article presents a fairly straightforward scenario.  The figures do the talking. The cost of a Will could be recouped in 3 months - even though the benefits could continue for decades.

The benefits for families in executing a plan can reap enormous financial rewards - which brings greater happiness through reducing financial stress.

The primary advantage of having a sophisticated will is that they include optional testamentary trusts.  Where a testamentary trust is used, income can be split amongst children and there are preferential tax rates for distributions to minors under testamentary trusts. 

We constantly recommend being proactive about the management of our personal affairs. Taking action to prepare for the future.

The benefits of firstly - planning, and secondly - executing the plan, can reap enormous rewards for you and your family.

Today's article is about someone who planned for the breakdown of his marriage, but his execution of the plan was poor.

Helping your family get their legal affairs organised is not as easy as it sounds.  For a start they have to want to do it!

When it comes to their Will, they don't deal with the consequences - and it isn't the most uplifting of topics!

The understandable media attention on a Supreme Court decision declaring that a Will made on a mobile phone was valid can be wrongly interpreted by some as meaning that they don't need to prepare a proper Will.

By failing to consider his father’s estate planning, this man had to give $150,000 of his dead father’s assets to his ex-wife!

This is a summary of a Family Court decision made in July 2017!

This relationship lasted a little over 8 years.  However the parties didn't take action to finalise a property settlement until 5 years after separation.  It is likely their focus was on providing a stable environment for their child - as they continued to share parenting.

3 1/2 years after separation, the husband received a large inheritance from his father's estate.

When it comes to bankruptcy and superannuation, a lump sum death benefit payment from a regulated super fund to a bankrupt is protected, and that money will not be available to creditors.  But what happens when the lump sum death benefit payment is paid to the estate, and the estate pays the money to the bankrupt?

Andrew's Story

Andrew Gapes was made a bankrupt on 17 January 2011. On 18 December 2013, his mother died.  Andrew was an executor and beneficiary of his mother's Will.

The proceeds of the mother's superannuation fund were not paid directly to Andrew or his siblings, but rather were paid to her estate.  On 12 March 2014, in accordance with the terms of her Will, the superannuation funds were distributed to Andrew and his siblings.  Andrew directed that his share, being $87,900.33, be paid to his wife because he did not operate a bank account at that time.

The Trustee in Bankruptcy of Andrew's estate commenced legal proceedings against Andrew's wife on 14 November 2016 demanding the payment of the money.

The Court had to decide whether the death benefit which was firstly paid by the superannuation fund to the estate of a deceased, and then secondly was paid by the estate to the bankrupt person, was protected from creditors. The answer: NO.  On 13 July 2017, the wife was ordered to repay the money!

Why Everyone should Upgrade to a Smarter Will

Smarter estate planning is not just for the wealthy

Even if all you own is your house/ apartment, you should still upgrade from a so-called 'simple' will to a more sophisticated will that properly protects your assets and reduces unnecessary tax.

As we age, many people decide to sell their house or apartment and move into a retirement village.  If you find a village that appeals to you as a place to live, and you make an application, you will be provided with a very complex and challenging set of documents. At a time when older Australians might expect to encounter a system which has been tailored to their needs, they instead find themselves entering into a legal minefield of agreements, obligations and costs - including a significant limitation on their rights.

The contents of your parents’ Wills are none of your business. However, the risk of losing your inheritance means that there may be very good reasons for a discussion about your parents’ estate planning arrangements. No-one wants to appear too eager to discuss their inheritance, but it can be sensible to discuss future potential scenarios.

Whilst your parents may be very much alive and kicking and focused on spending your inheritance, they will want to ensure that whatever assets left behind are enjoyed by their children and grandchildren.

What are the Risks?

It’s common for parents to be unaware that some or all of their inheritance could be taken from their children.

Where a parent prepares a standard Will, their assets will be transferred directly to their child. The parent’s assets become their child’s assets following their passing.