FREQUENTLY ASKED QUESTIONS ABOUT MODERN ESTATE PLANNING

Before reading the below, watch ‘The Convenient Truth’ at the link above.

1. What is Modern Estate Planning?
2. Who needs Modern Estate Planning?
3. Why do I need Modern Estate Planning when I already have a Will?
4. What are the advantages of Modern Estate Planning over normal Wills?
5. How do I know if my current Will is adequate or not?
6. Why does my solicitor say that I don’t need a complicated Will?
7. Do provisions for my business assets need to be included in my Will?
8. How does the process with RetireLaw work?
9. How much does Modern Estate Planning cost at RetireLaw?
10. What do clients receive from RetireLaw for their fee?
11. Is Modern Estate Planning worth the money?
12. What is RetireLaw?

1. What is Modern Estate Planning?

Modern Estate or Succession Planning has been described by one Australian authority as arranging the transfer of family resources from one generation to another in a manner that optimises the family’s overall financial position.

Unlike a simple 2-3 page Will common to many families, a Modern Estate Planning Will provides a detailed roadmap for beneficiaries on how to keep wealth in the family, and are always written from a financially protective and risk preventative standpoint.

For example, Modern Wills provide protections of inheritances from

• unnecessary taxes;
• from a beneficiary’s divorce or separation settlement;
• from the bankruptcy tribunal should a beneficiary owe creditors;
• from costly estate disputes that arise from the common legal ambiguity of most simple 2-3 page Wills;
• high estate administration costs and preventable delays.

Also differentiating Modern Estate Planning documentation from the Wills of yesterday is the inclusion of

• special provisions to cover all asset classes including superannuation, life insurance and family trusts;
• protection provisions for child and vulnerable beneficiaries such as disabled beneficiaries, beneficiaries with addictions or beneficiaries may be simply bad with money;
• provisions protecting inheritance equity which can be threatened by a myriad of state and federal laws that effect Wills and Probate administration;
• provisions providing safety net trusts to those families with business interests or assets.

To learn how all of this is accomplished by Modern Estate Planning, we encourage you to view The Convenient Truth.

* If you have not been given the username and password to watch The Convenient Truth, please email info@retirelaw.com or call 1300 584 782 to receive them at no charge or obligation.

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2. Who needs Modern Estate Planning?

Modern Estate Planning is for everyone, as the advantages it offers are as important for a single mother with simple personal and asset circumstances as they are for a married couple with extremely complex personal and asset circumstances. Today’s Wills need to offer clients certainty that their wishes will be met and offer beneficiaries asset protections and tax advantages via beneficiary controlled testamentary trusts. For a full list of benefits see Question 4 or watch ‘The Convenient Truth’ – a story about why the era of simple Wills is over.

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3. Why do I need Modern Estate Planning when I already have a Will?

Too many solicitors still rely on precedents that no longer meet the needs of Australian families. Most current Wills are not suitable to deal with modern issues of asset protection, tax minimisation and the distribution of superannuation death benefits. A modern Will needs to deal with over a dozen separate legal regimes that can affect the distribution of the estate, as well as dealing with life insurance proceeds, superannuation, guardianship of children, business assets or family trusts, matters almost never covered by “simple wills”.

Modern Wills should also offer tax advantages and protections to each beneficiary through employing beneficiary controlled testamentary trusts (BCTT). BCTTs are given privileged status by Tax and Bankruptcy legislation and by Family Court practice, thus providing income and capital gains tax saving opportunities and protections to shield inheritances from the impact of common family occurrences such as divorce, bankruptcy and other unforseen crisis’.

Also, if children are to inherit equally, a modern Will should ensure that appropriate adjustment processes that take into account assets or interests not transferred by the Will. It should also provide for children beneficiaries, and provide, as required, protective trusts for vulnerable beneficiaries should there be, among the potential beneficiaries, someone who has special needs because of their capacity, intellectual disability or simply an inability to properly manage their own affairs.

Planning For the Worst

Along with Modern Wills, Enduring Powers of Attorney and Appointments of Enduring Guardian documentation are essential to ensure that you have authorised those you trust to manage your financial affairs and personal well being should you be unable to manage such affairs yourself because of accident or illness.

In many ways, creating an Enduring Power of Attorney is like insurance against the possibility that during your lifetime, you may lose the capacity to manage your own affairs, and wish to have a plan in place which avoids putting your financial position at the inflexible control of the State.

An Enduring Guardian is someone you choose to make personal or lifestyle decisions on your behalf should you lose capacity. You choose which decisions you want your enduring guardian to make. These are called functions. You can also direct your enduring guardian on how to carry out the functions.

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4. What are the advantages of Modern Estate Planning over normal Wills?

• Protection of inheritances from unnecessary taxes
• Protection of inheritances from divorce settlements
• Protection provisions for superannuation
• Protection of inheritances from bankruptcy
• Protection of inheritances from litigation and disputes
• Protection provisions for child beneficiaries
• Protection from high estate distribution and administration costs
• Protection provisions to ensure inheritance equality (if desired)
• Protection of business assets through safety net provisions
• Protection provisions for assets in trusts and life insurance payouts

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5. How do I know if my current Will is adequate or not?

Sadly, most simple Wills are inadequate for people with even the most simple of circumstances. RetireLaw offers a fee and obligation free review of your current Will. Simply call 1300 584 782 or email info@retirelaw.com.au

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6. Why does my solicitor say that I don’t need a complicated Will?

There is a commonly held view amongst some solicitors that Modern Wills with testamentary trusts are an unnecessary complication and offer little benefit. Such views highlight a failure to appreciate the fact that testamentary trusts are given privileged status by Tax and Bankruptcy legislation and by the Family Court practice. Well drafted Modern Estate Planning Wills providing for beneficiary controlled testamentary trusts take advantage of the asset protection and tax minimisation opportunities offered under such legislation and practices to the long term advantage of beneficiaries and their families.

RetireLaw’s Modern Estate Planning also includes Enduring Powers of Attorney (with special provisions to deal with superannuation) and Enduring Guardianship to ensure that your housing, welfare and medical treatment are looked after should you be unable to do so yourself because of accident or illness.

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7. Do provisions for my business assets need to be included in my Will?

At RetireLaw we recommend that the Modern Estate Planning Wills drafted for you have beneficiary controlled testamentary trusts dealing with both private assets such as the family home and business assets such as companies, trusts, real estate, stock or intellectual property.

For there to be an effective and readily managed trust in the business owner’s Will, special provisions are included in the trust terms embedded in the Will to provide guidance for the executors so as to ensure maximum flexibility and control over the business interests and their future.

Why Have Business Trust Provisions?

Often, when a business partner dies, the family of the deceased may not have the knowledge or experience to decide what should happen to the inherited business interest. Even if family members have a sound understanding of the business, they may not be in the best position emotionally to deal with complex decisions about the future of the business that will maximise the benefit to the family. In effect, the detailed terms of the testamentary ‘business interest’ trust allows the trustees to take time deciding the business’s future. This may include “grooming” the business for sale over the next year or two, or simply building on the work of the deceased owner to ensure continued benefit from the business to the family over the long term.

Such ‘business succession’ or ‘business interest trust’ provisions in a modern Will serve two highly advantageous functions. Firstly they act as a safety net so that the family of the deceased stake-holder will not be disadvantaged if left to deal with a significant business asset that they may be unfamiliar with. This is particularly advantageous in cases where a buy/sell or shareholder agreement had not been formalised. Secondly, a well drafted Will with business succession provisions offer a much smoother and financially beneficial transfer of business assets from one generation of the family to another with no capital gains tax implications. Further, such an approach provides significant tax and asset protection opportunities given that testamentary trusts are given privileged status by the Tax and Bankruptcy legislation and by the Family Court practice.

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8. How does the process with RetireLaw work?

Most clients contact RetireLaw following a recommendation from their financial adviser or accountant. The process with RetireLaw commences with an initial conversation over the phone. You will then be sent a questionnaire, and an obligation free appointment will be made for you meet with a RetireLaw solicitor. At this initial meeting the service will be explained further and any questions you may have will be answered. At the end of this initial meeting, a lump sum quote will be provided. At this stage you are free to walk away, otherwise another appointment will be made for you and your spouse/partner to meet with your RetireLaw solicitor again to have the documents explained, sign the Wills and go over any last minute changes.

Also, RetireLaw offers free Will review and written critique should you wish to find out about the adequacy of your current Will. Call 1300 584 782 or email info@retirelaw.com.

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9. How much does Modern Estate Planning cost at Retirelaw?

RetireLaw fees are based on an extremely competitive sliding lump sum scale determined by the complexity of each client’s personal and asset circumstances and the work that needs to be done to prepare documents tailored to your needs. All initial meetings are free of charge, and all clients receive an obligation free lump sum quote at the completion of the free initial meeting.

Alternatively, complete our short online questionnaire. The questionnaire allows you to ask specific questions of our solicitors as well as enabling a convenient free quote estimate and additional information relevant to your circumstances to be provided.

Retirelaw is committed to providing all clients with

• The most up to date legal expertise available in Australia
• Experience, sensitivity and family understanding
• Free initial consultations
• A personalised strategy based around the ‘prevention’ of future estate disputes
• Education and awareness of the purpose and advantages of their Estate Plans
• Ongoing support and information
• Customised service

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10. What do clients receive from RetireLaw for their fee?

Once we have clarified and verified which assets you own (e.g. family home) or control (e.g. trusts, companies, super etc), our expert RetireLaw solicitors will provide you with the cutting edge documentation (listed below) needed to both protect and financially maximise your family and if appropriate, business interests.

• Modern Estate Planning Wills offering beneficiary controlled testamentary trusts (including a Business Succession Trust if required)
• Enduring Powers of Attorney, including provisions covering superannuation, with primary and substitute appointees – a must for everyone.
• Appointments of Enduring Guardian with primary and substitute appointees – recommended for everyone.
• Written explanatory material covering each document category as well as a guide for your executors.
• Safe custody of clients’ Wills, plus registration with the NSW Registry of Births, Deaths & Marriages.

The RetireLaw Quality Guarantee

Underpinning RetireLaw’s quality documentation are the best Will precedents available in Australia. The templates are regularly updated to reflect any changes in Federal and State laws that can impact on Wills and Succession law. Also, the RetireLaw quality guarantee extends to notifying clients when they should upgrade their documentation to take into account such changes.

Ensuring Client Awareness

Once your Wills and related documents are appropriately explained, signed and witnessed, we will send you a portfolio containing not only copies of your estate planning documents, but also a plain language explanation of your Wills for future reference along with a detailed guide for executors and FAQ about Power of Attorney and Enduring Guardianship. We also lodge details of the Wills at the NSW Registry of Births, Deaths & Marriages, which provides a backup to the Estate Planning Portfolio and records the location of your Will.

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11. Is Modern Estate Planning worth the money?

If you go onto any financial services business website you will more than likely find in their list of services some mention of Estate Planning. This is because the benefits of Estate Planning are undisputed. Reputable solicitors, accountants, financial advisers and any client already with an Estate Plan in place, understand how critically important it is for Estate Planning to form part of any successful wealth creation strategy long-term.

The great majority of RetireLaw clients understand that they need professional advice to maximise wealth creation. This is why they pay their trusted advisers and accountants to manage their investments. The cost of such advice is obscured by the enormous benefits to their family’s long-term wealth.

It is this cost benefit understanding that ultimately leads clients of financial advisers to invest a small amount on RetireLaw’s Estate Planning service. Put simply, the cost is far less than the guaranteed benefits.

According to research done by The Dashboard Company (featured in the moneymanagement.com website), the average funds under management per active client in Australia is $104,000. Investors with this amount are considered lower-net-worth clients, with other research suggesting that (depending on which financial services company you ask), amounts anywhere from $250,000 to $1,500,000 enters a client into the high-net-worth category.

This is where some people’s understanding of Estate Planning falls short. There is often an assumption that their estate is not large enough to warrant the short-term one off expense of Estate Planning.

This is simply not true.

Let is consider an average two income family which employs financial advice to help expand their wealth. They have a home worth $600,000, life insurance worth $150,000, investments valued at $150,000 and $200,000 in superannuation. When they pass away, they will have roughly $1,000,000 in assets to leave to their two children.

If like many households the family above owns two cars, they would spend roughly the same amount on car insurance each year as they would spend once off on a Modern Estate Plan from RetireLaw. In most cases, the once off fee from RetireLaw represents significantly less than one half a percent of their estate, and yet the service and documentation provided will financially maximise and protect the entire $1,000,000 estate for 80 years, offering enormous financial advantages and protections to the family of the deceased (see The Convenient Truth for full details).

Smart investors, no matter how large or small their estate is, employ advice from financial service professionals to manage and grow their money today. The really smart investors also employ Estate Planning professionals to ensure that this hard earned money is passed on to their family in the most protected and financially maximised way. The benefits of Modern Estate Planning are simply too great to ignore.

Talk to your financial adviser or accountant about Estate Planning, or click here to organise and an obligation and fee free meeting with an experienced RetireLaw solicitor today.

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12. What is RetireLaw?

RetireLaw is an incorporated legal practice established with the expressed intention of making available the significant long-term benefits of Modern Estate Planning to the wider community; in particular, those families who wish to protect and financially maximise their estate for their children and grandchildren (or other chosen beneficiaries). As a result, RetireLaw works closely with experienced professional advisers to provide their valued clients with expert Modern Estate Planning services and documentation. RetireLaw limits its service to Estate Planning, Probate Applications and associated Probate administration. RetireLaw does not undertake litigation on behalf of parties due to Will disputes.

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