What estate planning arrangements have you made?

So, I'm dying. I believe I've got about 40-50 years left - maybe a little more if I'm lucky.

Having invested in many property cycles by then, I will need a mechanism to bequeath my squillions (I hope) of wordly possessions and overall investment portfolio to those who come after me (basically - my children, grandchildren, and spouse).

As I begin to do my own estate planning - it got me wondering as to what provisions you good folk at PC have planned to transfer wealth from the hereafter.

Have you set up testamentary trusts? Or have you used the $2 will-kits from the local newsagency? Perhaps you have something else in store?

So PC-universe, what Estate Planning arrangements have you made (or going to make)?

 

Some things to consider

• eduring powers of attorney with specific powers to renew binding death benefit nominations and to deal with super - can save you tax
• wills incorporationg testamentary discretionary trusts
• gifts prior to death
• loans to family members - cancel or pass on in death
• control of SMSF
• super penions
• effect of death on property held in super
• binding death benefit nominations in super
• control of private companies
• control of discretionary trusts and potential problems.

 

And flexibility so you can change your mind at anytime prior to losing marbles

 

We have a 6 monthly family meeting where the estate planning issues, goals, desires and objectives are discussed. People get a chance to air how they feel and the investments are analysed and considered.

That is chaired by an independent person.

The concept is that estate planning is a life long process to stop fights before they happen. Simply getting 2 inches of paperwork to show a magistrate later on is the easy part.

 

Wow, every 6 months??

IF you don't mind me asking, who chairs the meetings? (ie general info - a friend, a distant relative, your lawyer, etc)

And, what "levels" of family are involved in the meetings? eg: you + spouse, or you + spouse + kids, or you + parents + spouse.... (etc etc)?

Cheers

 

We use a business advisor (not me) but I professionally do it for others as well. If you go to www.fambiz.org.au you will find details of people who do this well plus a lot of education on how to manage this process for dynasty families.

This type of stuff is done by large family groups and by dynasty families - Hilton, Bacardi, Faber-Castell, Linfox and so forth. It is often done by smaller families as well in a way that suits them on a small scale - best fit not best practice stuff.

The advisors listed at FBA come from a range of backgrounds - psychologists, lawyers, engineers, business guys accountants and so forth. Each person is skilled in their area and how it applies to generational transfer of assets (either business or personal). The psychologists do a lot of work in getting the communication flow among family members to articulate how they feel.

While our family is not dynasty (by a looooong shot) we still do it (I am more excited by it than others). A big part of the meetings is financial education, expectation management as well as culture.

Our family business advisor is a bit below average (in my opinion) but he is independent. So that is good.

Go to a FBA meeting.

 

I'm looking at setting up a testamentary discretionary trust as part of my estate planning.
I'm interested in any advice/experience in how clients/people have decided to stagger the ages at which the capital of the inheritance is distributed to beneficiary children.

For eg, my wife and I are thinking of something like, distributing the capital of the inheritance at staggered ages (to protect our child from themselves or potentially wasting inheritance) - distribute 25% of the estate at age 25 yrs, then 25% at age 30 yrs, 20% at age 35yrs, 15% age 40 yrs, and 15% age 50 yrs.

Does that sound reasonable, or should one really aim to give more of the inheritance at a younger age when the beneficiary should need the most help financially ? (when they are still studying, trying to buy their first home, set up their business, etc).
I realise that this may be more of a personal decision and preference, but I'm also aware of quite a few of the PC members who have a lot of experience with this sort of stuff, and things they must have seen work out well or not so well.

 

Do you mean a discretionary trust in the will?

So far my clients have fallen into several camps.

A. No restrictions
B. Wait till child is 25
C. 40.
D. Wait till the youngest is a certain age before distributing to all.

 

Yes, I mean a discretionary trust in the will.
So, those clients that choose option B, do they give all (100%) of their inheritance when the child(or children) turns 25 yrs of age?

 

I have a will (solicitor created) which deals with my personal and business interests. I have a binding death nomination in my smsf for distribution of its assets.

I have also considered death, divorce, disembowling, diahorrea and diptheria

 

Yes, so far I haven't had a staggered distribution requested.

Keep in mind setting up a trust in the will can mean the child can make a family provision claim - and win. So you may not want to tie it up too long.