Ensure your estate goes those you care about most.

1. Ensure your estate goes those you care about most.

2. ISSUES TO CONSIDER • The basics of a Will and what is often missed • Other types of Wills generally used • The Family Group Will and it’s advantages • Superannuation in Estate Planning • Other assets not covered by your Will

3. KEVIN’S EXPERIENCE • 20 years of experience in the trustee industry with professional trustee company: • Advising on, checking and drafting complex Wills • Advising on complex estate administration issues • Acting in Family Provision claims against Wills in Supreme Court • Last 12 months as head of 2020 Legal Solutions.

4. THE WILL Who to Appoint as Executor • Partners • Children, more than 1 child? • Other family or friends • Professional Trustee

5. WHAT FORMS A BASIC WILL? • Revoking prior Wills • Specific gifts of personal items • Gift to partner first, children in substitute or other nominated parties • Document signed in accordance with Succession Laws.

6. PROBLEMS WITH BADLY DRAFTED WILLS Tax Minimisation When gifts are left to beneficiaries contingent on attaining a certain age. Clauses to reduce taxation are often not included. Duty Minimisation Majority of basic Wills do not include an appropriation clause to minimise and potentially eliminate stamp duty on property transfers.

7. EXTRA TAX BURDENS THAT RESULT WITHOUT APPROPRIATE CLAUSES E.g. 1. Will leaves estate equally to 3 children subject to turning 25. The children are aged 12, 10 and 8 at the time. Say $200,000 is held for each child averaging 6% interest.

8. Income is assessed under s99 – No person presently entitled. Income averages $12,000 1st 3 years assessed at ordinary rates 1st $6,000 free Balance @ 30% = $1,800 After 3 years assessed at s99 rates. NO INCOME CLAUSE INCLUDED 1st $416 is Nil. Balance @ 30% = $3,565.20 The 8 year old with 17 years in trust, is likely to pay $55,312.80 in tax.

9. Income is assessed under s98 (presently entitled but under legal disability) until age 18 and then s97 thereafter. Income under s98 receives $6,000 exemption. For the 8 year old tax over 17 years under s98 is $30,600.00 INCOME CLAUSE INCLUDED A simple tax planning clause can potentially save $25,000 for one trust. Multiply that by the other 2 trusts and $75,000 could potentially have been lost here in taxation.

10. An appropriation clause in a Will allows a trustee to allocate (appropriate) particular assets to cover entitlement in estate. STATE DUTIES THAT APPLY AND APPROPRIATION CLAUSES E.g. Both parents pass away owning 3 houses and they have 3 children. The Will leaves estate to 3 children equally. Each house is valued at $600,000 and the children decide to take 1 house each.

11. The OSR considers each child is entitled to 1/3 of each house and grants an exemption from duty for 1/3 of the value on transfer. NO APPROPRIATION CLAUSE They assess each child with duty on the remaining 2/3rds (or $400,000). Stamp duty payable by each child to transfer the property would be $13,490.00 Total on all 3 properties would be $40,470 in duty.

12. Say each beneficiary is entitled to $600,000 or more than the executor has power to appropriate a property (worth $600,000) to each beneficiary to satisfy their entitlement. WITH APPROPRIATION CLAUSE As the house has been appropriated the OSR views the beneficiary as being entitled to the entire value of that house under the Will. The beneficiary receives an exemption on the entire asset value. No stamp duty is paid. Over $40,000 in duty is saved.

13. Life Interest/Right of Residence OTHER TYPES OF GENERAL WILLS • Mutual or Contract Wills • Child Trusts – what age?

14.  How does it work? • The tax advantages THE FAMILY GROUP WILL • The duty minimisation

15. The new partner of surviving spouse THE FAMILY GROUP WILL ASSET PROTECTION • Protecting against Family Law and Family Provision claims • Protection for professional children

16. For the FGW your assets need to come into the estate. • Includes superannuation – is this desired? THE FAMILY GROUP WILL POSSIBILITES • The family Home as Joint tenants or tenants in common?

17. 1st Family with kids • Subsequent relationships WHO DOES A FAMILY GROUP WILL SUIT? • Singles, young and elderly Q & A

18. Tax Dependent beneficiaries • Binding or non binding death benefit nominations ESTATE PLANNING AND SUPERANNUATION • Payable to your estate or dependant beneficiary • The dependant beneficiary super trust within Will

19. Trusts OTHER STRUCTURES NOT FORMING PART OF YOUR ESTATE • Companies

20. Powers of Attorney OTHER TYPES OF ESTATE PLANNING DOCUMENTS NEEDED TO BE PUT IN PLACE • Enduring Guardianship

21. Retirement Village Lease • Nursing Home Bonds ELDER LAW ISSUES FOR CONSIDERATION • Reverse Mortgages

22. ESTATE PLANNING IS NOT JUST FOR YOU! Think about these issues, not only for yourself but for your partner, your parents and your children.

23. Q & A

24. DISCLAIMER The information contained in this presentation is of a general nature only and should not be relied upon as definitive legal advice. You should seek your own legal and financial advice suited to your individual circumstances.