Estate Planning
More than just a Will
A Will is a legal document that names the people who are to receive the property and possessions owned at the date of death of a deceased.
Why make a Will?
It is essential that you make a will if you are concerned about who will receive your assets and belongings after you die. This may include, but is not limited to your home, land, car, money in bank accounts, insurance policies, shares, jewellery, furniture, household goods and potentially superannuation proceeds. All adults over the age of 18 should have a valid Will. Download our brochure “The Will”
Why make a Will?
It is essential that you make a will if you are concerned about who will receive your assets and belongings after you die. This may include, but is not limited to your home, land, car, money in bank accounts, insurance policies, shares, jewellery, furniture, household goods and potentially superannuation proceeds. All adults over the age of 18 should have a valid Will. Download our brochure “The Will”
An Enduring Power of Attorney is a legal document which enables you to appoint a person to make decisions on your behalf about your finances and assets.
The exercise of that power may be “general” and take effect immediately, or “enduring” when the appointment continues to be effective and enforceable if you lose mental capacity or “specific” listing a specific period of time the document is to operate.
All adults should have an Enduring Power of Attorney to ensure that their affairs are administered by a person, or persons, of their choice. Download our brochure “Enduring Power of Attorney”
The exercise of that power may be “general” and take effect immediately, or “enduring” when the appointment continues to be effective and enforceable if you lose mental capacity or “specific” listing a specific period of time the document is to operate.
All adults should have an Enduring Power of Attorney to ensure that their affairs are administered by a person, or persons, of their choice. Download our brochure “Enduring Power of Attorney”
An Advance Care Directive replaces Enduring Powers of Guardianship, Medical Powers of Attorney and Anticipatory Directions.
It is a single legal document which enables competent adults to appoint one or more Substitute Decision-Makers to make medical decisions on their behalf after they lose mental capacity and to write down their wishes and preferences for future health care, residential, accommodation and personal matters. Download our brochure “Advance Care Directives”
It is a single legal document which enables competent adults to appoint one or more Substitute Decision-Makers to make medical decisions on their behalf after they lose mental capacity and to write down their wishes and preferences for future health care, residential, accommodation and personal matters. Download our brochure “Advance Care Directives”
A Testamentary Trust Will includes a discretionary trust created within the Will.
A Testamentary Trust is very similar to a Family Trust. The main difference is that a Testamentary Trust is created after your death (pursuant to your Will), whilst a Family Trust is created whilst you are alive pursuant to a Trust Deed. A Family Trust operates during your lifetime and therefore you are able to exercise some control over it. A Testamentary Trust comes into existence on your death and accordingly the only control you can exercise over the Trust will be limited by your Will.
Creating a Testamentary Trust within your Will can sometimes provide for a more effective strategy to leave assets to a person rather than make the gift directly. Download our brochure “Understanding Testamentary Trust Wills”
A Testamentary Trust is very similar to a Family Trust. The main difference is that a Testamentary Trust is created after your death (pursuant to your Will), whilst a Family Trust is created whilst you are alive pursuant to a Trust Deed. A Family Trust operates during your lifetime and therefore you are able to exercise some control over it. A Testamentary Trust comes into existence on your death and accordingly the only control you can exercise over the Trust will be limited by your Will.
Creating a Testamentary Trust within your Will can sometimes provide for a more effective strategy to leave assets to a person rather than make the gift directly. Download our brochure “Understanding Testamentary Trust Wills”
A special disability trust is a trust established under legislation passed by the Federal Government in 2006 to assist families plan for the future care and accommodation needs of a family member with a severe disability.
The trust can be established during the lifetime of the person contributing assets to the trust or in that person’s Will.
A means test applies to the assets and income of an individual for the purposes of assessing their entitlement to social security payments. Assets owned by a special disability trust up to the specified limit (currently $609,500 indexed annually plus the value of a home occupied by the beneficiary) are disregarded for the application of the Centrelink or Department of Veterans Affairs assets test. Download our brochure “Special Disability Trusts”
The trust can be established during the lifetime of the person contributing assets to the trust or in that person’s Will.
A means test applies to the assets and income of an individual for the purposes of assessing their entitlement to social security payments. Assets owned by a special disability trust up to the specified limit (currently $609,500 indexed annually plus the value of a home occupied by the beneficiary) are disregarded for the application of the Centrelink or Department of Veterans Affairs assets test. Download our brochure “Special Disability Trusts”
Your choice might include immediate family members, but need not.
You may apply conditions or limitations on the power you provide.
Your attorney cannot make decisions about your medical treatment or daily care.
You may cancel the appointment of an attorney at any time
Your choice of Substitute Decision-Maker might include immediate family members, but need not.
What if I lose mental capacity and have never completed an Advance Care Directive?
Your Substitute Decision-Maker cannot make decisions about your finances and assets.
Certain people are prohibited from being appointed your Substitute Decision-Maker.
What you own and how you own them is critical in professional estate planning.
Do you own your property as joint tenants?
Did you know that an asset owned in joint tenancy does not pass to your estate upon death?
Are there assets in a Family Trust?
Did you know that assets held in trust cannot be gifted in your Will upon death?
Do you own your property as joint tenants?
Did you know that an asset owned in joint tenancy does not pass to your estate upon death?
Are there assets in a Family Trust?
Did you know that assets held in trust cannot be gifted in your Will upon death?
Binding and Non-Binding Death Benefit Nominations in your Superannuation Fund need to be explored and discussed to achieve sound estate planning outcomes.
If you have separated from your spouse they may still be entitled to claim from your Super Fund unless it is dealt with effectively.
Appointing your young children as beneficiaries may not result in the desired outcome should you die.
If you have separated from your spouse they may still be entitled to claim from your Super Fund unless it is dealt with effectively.
Appointing your young children as beneficiaries may not result in the desired outcome should you die.
You cannot forget about your debts!
What is the tactic for payment on your death? Will you leave debts behind for loved ones to pay?
How will your family survive without your income after your death?
A clear and precise strategy should be engaged.
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Moral Obligation
Guardians of infant or young children. Who should you appoint? Should they receive financial consideration?
Guardians of infant or young children. Who should you appoint? Should they receive financial consideration?
What are the varying needs of individual family members?
Domestic Partnership definitions. Getting married in the near future? Just divorced?
The threat of an Inheritance Claim is always present!
You may nominate more than one attorney to make decisions for you and you may appoint them:
+Jointly – all decisions must be made together,
+Jointly and severally – where either of those appointed may effect decisions, or
+As alternatives – in case of death of an attorney
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+Jointly – all decisions must be made together,
+Jointly and severally – where either of those appointed may effect decisions, or
+As alternatives – in case of death of an attorney
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An example might be that decisions concerning the sale or disposition of real estate must be made by your attorneys jointly whilst other decisions may be made by them jointly and severally.
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Those decisions are made by a person appointed under an Advance Care Directive.
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To cancel an attorney, you must sign a document revoking the power and a copy of this revocation should be given to all attorneys appointed.
Destruction of any original or superseded document is also recommended.
WARNING Separation from a spouse or partner does not revoke their appointment as an attorney.
We can answer all of your Estate Planning questions
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You may nominate more than one guardian to make decisions for you and you may appoint them:
+Jointly – all decisions must be made together,
+Jointly and severally – where either of those appointed may effect decisions, or
+As alternatives – in case of death of a Substitute Decision Maker
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+Jointly – all decisions must be made together,
+Jointly and severally – where either of those appointed may effect decisions, or
+As alternatives – in case of death of a Substitute Decision Maker
Contact us for more information
If you lose mental capacity and have not completed an Advance Care Directive the Guardianship Board has the power to make an appointment but it may not choose who you would have wished – for example the Public Advocate.
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These decisions need to be made by a person appointed under an Enduring Power of Attorney (financial).
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A person is prohibited from being appointed your Substitute Decision-Maker if they are, in a professional or administrative capacity, directly or indirectly responsible for, or involved in, your medical care or treatment. You are therefore precluded from appointing your treating doctor as a Substitute Decision-Maker.
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A popular fear or misconception amongst Will makers, is that their estate may unwittingly pass to the benefit of a child’s spouse or partner in the event of a breakdown of relationship.
The powers of the Family Court are quite broad. However, it may be possible to reduce the ability of your inheritance being split between a separating couple if, instead of giving your child a direct gift in your Will, you provided for them via a Testamentary Trust.
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The risk of being sued, particularly for those persons whose trade makes them vulnerable (doctors, lawyers, accountants, sole traders etc) is ever present and usually results in them not owning any assets in their sole name.
If a beneficiary experiences financial difficulties and receives a windfall from your estate it is possible that your gift can be attacked by creditors.
With a Testamentary Trust the trustee determines who receives the income and/or capital of your estate and can decide what (if anything) to pay to a bankrupt beneficiary.
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On occasions Will makers wish to benefit someone who suffers from an intellectual handicap or perhaps suffers from a significant drug or alcohol dependency.
Rather than providing a direct gift to them, which may be squandered or mismanaged or otherwise not able to be handled, you may provide for their benefit through a Testamentary Trust where your appointed trustees remain in control.
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One of the most significant advantages to establishing a Testamentary Trust within your Will is that your trustee has powers to maximise the benefit your whole family from your assets taking into consideration greater tax burdens which some beneficiaries might face.
Tax must be paid on any income or interest earned from investments in a deceased estate at the beneficiary’s own marginal tax rate.
For example if interest of $40,000 is earned through investments made from estate monies valued at $500,000 a beneficiary spouse may pay tax on that interest of $6,600. However, if the same amount of interest was earned via a Testamentary Trust and split amongst several beneficiaries, including minor children, then it is possible to avoid payment of tax. That saving would occur in each and every year the investment is maintained.
For example if interest of $40,000 is earned through investments made from estate monies valued at $500,000 a beneficiary spouse may pay tax on that interest of $6,600. However, if the same amount of interest was earned via a Testamentary Trust and split amongst several beneficiaries, including minor children, then it is possible to avoid payment of tax. That saving would occur in each and every year the investment is maintained.
In addition to this the tax free threshold of minor children is significantly higher than that of distributions from discretionary or family trusts.
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Immediate family members who are in receipt of a social security or service pension and have reached pension age can take advantage of gifting concessions and are not caught by the ordinary gifting rules when gifting to a special disability trust.
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The trust deed must meet specified requirements to be classified as a special disability trust.
For the concessions to be available the trust must adhere strictly to those rules and be established for the sole purpose of providing care and accommodation for the principal beneficiary.
For the concessions to be available the trust must adhere strictly to those rules and be established for the sole purpose of providing care and accommodation for the principal beneficiary.
The special disability trust must not pay for things that would ordinarily be day to day expenses not connected with the disability and cannot be used to pay immediate family members for providing services.
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Only a person who is “severely disabled” will qualify. Potential beneficiaries must be at least 16 years of age who:
+have an impairment which would entitle them to a Disability Support Pension or invalidity service pension or invalidity income support supplement
AND
+because of their disability are not working, and are not likely to work, at relevant minimum wages; and either:
+lives in an institution, hostel or group home that provides care for people with disabilities;
OR
+has a disability that would, if the person had a sole carer, qualify the carer to receive Carer Payment or Carer Allowance
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AND
+because of their disability are not working, and are not likely to work, at relevant minimum wages; and either:
+lives in an institution, hostel or group home that provides care for people with disabilities;
OR
+has a disability that would, if the person had a sole carer, qualify the carer to receive Carer Payment or Carer Allowance
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Tax consequences can flow from the operation of a special disability trust and these need to be taken into account.
There are significant Capital Gains Tax consequences when transferring or selling real estate property and income earned by a special disability trust that is not expended in a tax year is taxed at the top marginal rate.
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