These are my notes so far-
The will
Get dad to consider setting up a testamentary trust in his will as there can be big tax advantages as well as asset protection advantages. For example the will can be worded so that there is an option to take property outright in their own names or have it go into a trust. For example, (Wife) may elect to have her share of the property taken outright while in her own name while Ishtvan may elect to have his share of the property taken and put into a trust in which he is named the appointer for.
List of Items which should be included in the will
XXX houses
XXX Houses
Item 1Furniture, fridge, pool table,
Office desks.
Cars-
Any remaining bank account cash
Tools and equipment in shed
Also
Superannuation funds (X3) -Separate
Self managed super fund last will and testament with will directions specified on trust deed OR binding nominations which would need to be updated EVERY THREE YEARS.
The self managed super fund is a trust which you create specifically to manage your superannuation affairs. On here you can specify on the trust deed exactly how you want your superannuation benefits distributed in the event of your death (this testimony is equivalent to a binding nomination but does not have to be renewed every three years). This would require you to transfer all your superannuation benefits into a single fund which is held in a trust. You would make yourself appointer of that trust and then you may appoint yourself as trustee.
Also dad, could you please make the solicitor the executor of the will. (If not the solicitor then me)-
Focus on Testamentary capacity
Make sure signing of the will is witnessed properly-
At least two people to witness the will signings AND also for the binding nomination forms for superannuation if they are used.
Any more on testamentary capacity?
Just make a list of all assets and liabiilities and what you want to achieve.
Make a separate list of trust assets and liabilities, one for each trust.
And make a list of super assets – each funds separate.
Also, list any insurance polices and who the beneficiairies are.
The solicitor should do the rest.
Consider too
– business succession plans
– Enduring powers of attorney
– Guardian of minor childrenTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What about insurance trusts? I mean a insurance trust may be nessasary in some situations in order to provide instructions on how a insurance benefit is to be divided between spouses? (i.e. on the trust deed)
http://www.civiclegal.com.au/Publications/OnlineGuides/BusinessSuccessionPlanning.aspx
Have a look on the bottom of this page.
Only reason I ask is that dad actually did just buy a life insurance policy.
Cheers
An insurance trust is a trust set up to receive insurance payouts. They cna be good, but some proceeds may be taxable.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Well in your opinion would it be worth investigating one of these as well or just leave it to the insurance company directions which will also be included in the wil…
I assume you are talking about life insurance?
You could have the insurance paid to a beneficiary or into your estate. If into the estate then you could direct it to a testamentary trust. If directly to a person then no asset protection – eg what if they are bankrupt at the time you die. Getting it into a will or testamentary trust will enable tax effective streaming to kids at adult tax rates.
But leaving it via a will could mean it will be at risk if there is a claim on the will – such as a family member left out, new spouse, mistress etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes, the life insurance policy…
So if you want to split a life insurance payout between two spouses then I suppose to put it in a trust is best as the trustee of the trust will have to follow the directions on the trust deed when paying out benefits…
Yes, but if the testamentary trust is a discretionary trust then the trustee may have discretion to distirbute the proceeds to a wide class of people. You could have a separate trust in the will for the insurance, maybe a unit trust with 50/50 to the spouses, or a separate discretionary trust each with half the proceeds so then each spouse have have the tax effectiveness and full control
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
No.
If a trust is a discretioanry trust the trustee can distribute money or income to any of a huge range of people. You cannot direct a trustee of a discretionary trust to give the money to a specific person – or the trust would not be discretionary.
So if you do want to leave money to a specific person then you can either give to them directly in the will. or leave it to a testamentary trust which they control. If there are 2 people then you would ideally need to give to them via 2 separate trusts.
I think the unit trust is not a good idea to 2 ex spouses as they may not like each other much and wouldn't want to work together.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
So I need to think about setting up either a unit trust with 50/50 directions to the spouses or a two separate testamentary trusts for each spouse in which each spouse is named the appointer for their relevant trust…?
Okay, well what if the directions on the will just specify how the insurance payout are given? that would be binding?
No. The insurance policy will specifiy who the beneficiaries are. Like a binding death nomination in a superfund. You should contact the insurance company and find out who is the named beneficiary and then change it if need be.
What role each person will play in the trust will depend on their situation and should consider asset protection issues too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes, so dad may have to fill out a binding nomination form for the insurance company for the directions to be binding or they are binding by defult?
He will just have to contact them and ask to change the beneficiary. They probably have a form to fill in for that.
But he should get some advice on who to leave it to and how.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes, well it is actually a new policy and I know he has been talking to the company but hasent finalised it yet. He will explain the insurance situation with me and the wife soon at which point I will be adding notes to the will stuff. Sometime after that point next thing we will be doing is seeing the solicitor to make the will.
The insurance is with st geoarge bank and came as an offer with the loan as he just purchased two additionall investment properties.
I would be interested to hear what the solicitor will charge you for all this advice and the wills.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sure, I will let you know
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