Proper planning is always key to a succession and estate plan

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Estate planning discussions should start sooner rather than later.

Good estate planning is not only about the Will but in the detailed planning that goes into the other aspects of the estate to achieve the best outcome for your loved ones.

Advice and documentation on succession and estate planning should take place sooner rather than later. It becomes difficult to have documents prepared and signed where a person has started losing mental capacity, and may be costly if court applications need to be made.

We can assist with succession and estate planning by providing advice and documents including wills, tailored binding death benefit nominations, updating trust deeds and power of attorneys.

What can happen if proper planning and documents are not in place?

  • assets may not pass to a person’s intended beneficiaries
  • assets may be at risk from claims under a lawsuit or relating to bankruptcy
  • assets may be at risk as a result of a relationship breakdown with a former spouse
  • vulnerable beneficiaries may not be properly protected
  • disputes could arise between family members which may end up in court
  • beneficiaries may end up paying higher tax than necessary when receiving assets

Jack works as an accountant in his own practice and will inherit his mother’s $2 million dollar share portfolio. The income from the share portfolio will be taxed at Jack’s highest marginal tax rate and his inheritance is then vulnerable if there’s a successful law suit against him arising out of his practice.

An alternative option his mother could have put in place before her death is to set up a testamentary discretionary trust (a trust which comes into existence when his mother passes away).

The share portfolio could be transferred to the testamentary discretionary trust upon her death and income paid to his non-working spouse and minor children. The income paid to the spouse and minor children would be subject to different tax treatment potentially saving many thousands of dollars in tax every year.

Succession and estate planning should be on your “to do list” and is something that should happen every few years or when your circumstances change. You can’t control when you pass away but you can take steps to control what happens after.

By Natasha Ng, Solicitor

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