estate planning for life peace of mind for you and your loved ones
TRANSCRIPT
Estate Planning for LifePeace of mind for you and your loved ones
2
Disclaimer
Important Notice
RI Advice Group Pty Ltd, ABN 23 001 774 125, holds Australian Financial Services Licence Number 238429 and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts.
The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.
Some Disturbing Facts
More than 45% of adult Australians don’t have a will
In the next 25 years $1,445 billion will be passed to the next generation
Some Disturbing Facts
Divorce rate are high and getting higher:
50% of 1st marriages,
66% of 2nd marriages,
75% of 3rd+ marriages
Some Facts
For every house lost to Fire
2½ houses are at risk due to Illness or Death
22½ houses are at risk due to Financial Problems1
Flood & Fire insurance typical costs $2,000 to $4,000 pa
Illness & Death insurance typical costs $2,000 to $4,000 pa
A good estate plan – typical cost $2,000 to $4,000 once
1 source ABS, RMIT, Crimsafe
Estate Planning For Life – What Is It?
“I can only relax and enjoy my trip if things are in order at home”........Angie W.
1. The Information That Matters
2. A Crisis Management Plan
3. The right legal documents to protect your family’s inheritance
The Information That Matters
3. Structures
1. People
2. Documents
5. Debts
6.Insurances
7. Responsibilities
8. Final Details
THE INFORMATION
THAT MATTERS
4. Assets
A record of the information that your family and advisers need
The Information That Matters
Adobe Acrobat Document
Crisis Management PlanIf the worst happens don’t expect me to think
clearly or know what to do.
I will put one foot in front of the other until I recover.
But in the meantime I need you to give me a simple guide, step by step, day by day.....
.........Angie W
Crisis Management Plan
? What do I need to know? (ITM )
? Who do I need to call?
? What do I need to ask them?
? What is important?
? What can wait?
Crisis Management Plan
Adobe Acrobat Document
Protecting Your Family & Their Inheritance
1. Tax
2. Marital strife (divorce/separation)
3. Death and partner remarriage
4. Bankruptcy or other Legal threat
5. Mental, physical and legal incapacity
6. Behavioural or substance abuse issues
7. Young beneficiaries
A Testamentary Trust
• Like a “will trust” for a young child, but it applies for adults and lasts up to 80 years
• $ don’t pass directly to beneficiaries
• $ pass to a trust controlled by a trustee (normally child) for your bloodline’s benefit
Estate $Estate $Estate $Estate $
Not like this... Like this...
Tax Advantages
$18,200 $37,000 $80,000 $180,000
0% 21.5%
34.5%
39%
47%
Effective 2013 Income Tax Scales(Including 2% Medicare)
Example: Inheritance Invested
Estate of $1,200,000 with 2 beneficiaries
Inheritance amount: $600,000 each
Term deposit interest rate: 6% (say)
Interest earned: $36,000 pa
34.5% income tax: $12,420 pa tax
2 Families: $24,840 pa tax
A Better Solution: 2 Testamentary Trusts
Same Income ($36,000 to each family)
Income allocated to grandchildren (not adult children)
$18,000 income to each grandchild
$0 tax!
Combined annual tax saving across 2 families up to $24,840
$1,200,000 Estate$1,200,000 Estate
$ $
Divorce
What Parents Want What They’re Afraid Of
$ $
$
$
$0
$
Divorce: a better way
$Will Trust
Trustee
Bloodline Beneficiaries
Death & RepartneringWhat Parents Want
+X
What They’re Afraid Of
$
X
$
$0
$
$
$
$
+
Death & Repartnering: a better way
$Will Trust
Trustee
Bloodline Beneficiaries
XFamily Appointor(s)
decide who becomes trustee
X
+
Bankruptcy & Legal Threat
Remember 1x : 2½x : 22½ x
Top 5 reasons for personal bankruptcy:Job Loss
Divorce/separation
Debts and credit cards
Poor health
Adverse litigation
Protecting The Family Home
Inheritance$$
RiskRiskRisk
Family Home Unprotected!
$
Loan Repay bank
Registered Mortgage
Ris
k
Ris
k
Ris
k
Protected by Loan to Trust
Other Issues and Protective Trusts
Age issues
Drug and alcohol dependency;
Mental health issues;
Gambling and other addictive behaviours;
Questionable social associations
Estate Planning For Life
The Information That Matters
A Crisis Management Plan
The right legal documents to protect your family’s inheritance
Interested?