Asset Protection Outline Plans
Asset & Property Protection (A.P.P.) = Strategies (in) a Plan.
Why have an Asset & Property Protection Plan /”Estate Plan”?
PART A - While you are alive and during your life ……………………………………..
PART B - After you pass away or die …………………………………………………….
Asset & Property Protection involves putting in place arrangements to protect your Property, assets and Money (i.e. “Estate Planning “) both before and after death ; so much of what a person does while they are alive has a major effect on what happens after they pass away in any case ;
PART A – Arrangements to be made during your Lifetime
“The Part A Agenda” that may need thought and planning ………….
- If some one were to start a Family Law/De Facto type claim or other legal claim/court action against you or any member of your family how safe would your property be?
- Has all your property/money and sources of income been organized in such a way so as to lawfully reduce your tax ?
- Are all your records , financial or otherwise complete and in good order ?
- Who would manage your Financial and /or personal affairs while you are temporarily or permanently incapacitated ?
- *5 Is there an Urgent actual or potential problem connected to the above that needs dealing with NOW ? (divorce, second marriage ,serious illness, possible bankruptcy/insolvency, serious business problems ?)
Strategies to cover the above might include (1) listing or “mapping out” your assets/property and money (2) Listing any potential risks (3) Considering the possible use of Pre/Post Natal (Marriage) Agreements,Trusts,Severance of Joint Tenancy to Tenancy in Common for property jointly owned by Partners/Spouses (4) Giving documented loans to Partners/relatives , sons and daughters (mortgages, caveats and/or charges in writing) (5)Reviewing insurances to see they are adequate ,(6) Considering additional mortgages on your own property (7) Having proper valid Enduring Powers of Attorney and Enduring Guardianship documents done to take care of incapacity (8) Having Effective Buy/Sell/Business Succession agreements 9.Registering Charges/interests under new National Personal Properties Security Legislation, and 10. Regularly reviewing all strategies and the above at least every 12 months (possibly more regularly for some individuals)
5.5* Urgent / Actual Potential Problems ; - a strategy needs to be put together asap by you, Your Accountant , Financial Planner , Lawyer/Insolvency/Bankruptcy expert – a series of fall back plans or “Plan B’s” to protect you , property and your Money (& talk to your Priest or Imam? Too! – have “faith” – what is your plan to survive and bounce back ?)
PART B – Arrangements to be made if you pass away or die (or for this eventuality…)
In addition to the above ; “The Part B Agenda” that may need thought and planning……………
- Do you have a Will ? Do you know where it is ? Is it up to date ?
- Will your Will protect your Spouse/Partner, Children/Relatives or Beneficiaries from Family law/de facto type legal claims or other types of legal claims or court action ?
- Will your Will help your Spouse, Partner, Children or beneficiaries lawfully reduce tax liabilities ?
- Does your Will adequately protect your Spouse,Partner,children or beneficiaries if they are or become incapacitated, ill ,disabled or simply from becoming spendthrifts ?
- Will your Will properly deal with property in other structures like Trusts ,Companies , Superannuation ,outside your home country……………….?
- Is your Will fair and equitable and will it reduce the chance of disputes and care for relatives adequately ?
- Do you have adequate Life Insurances/Life cover ?
Strategies (in addition to the above) to cover the above might include :
- Wills with arrangements for Trusts or other structures after death ,(2) Deeds included within existing Trust Deeds to fix the allocation of property/income and succession (3) Regular reviewed Binding death Benefits for Superannuation (4) Buy/Sell Agreements/Business Succession Agreements – a “Will for your business/Company”
Why your Will should contain provision for
Testamentary Trusts (Trusts created after death) or *other types of legal Structures after Death..
This is only a short summary of the advantages and benefits to your relatives /beneficiaries of creating Optional Trusts in your Will. (A Will Trust is often also referred to as a “Testamentary” Trust)
This summary should not be read, understood or relied on complete advice with respect to Trust, Tax, the law as it applies to Wills or the law generally. Detailed professional legal, accounting and tax advice is required for each individual set of circumstances.
If you have any questions or queries please make contact with us for a fuller explanation.
Why your Will should contain provision for (Optional) Testamentary Trusts ?
What is a Testamentary Trust?
A testamentary trust is a trust established by a Will after death . Optional, discretionary, testamentary trusts are often recommended for use in Wills as they can offer taxation and asset/property protection advantages when compared to a ‘standard’ simple Will where gifts are made to people directly. Such Trusts can be made compulsory or more restrictive also depending on circumstances……
A testamentary trust can live for up to 80 years from your death (or longer if commenced/administered in South Australia) it can provide flexibility, asset protection and taxation advantages for many generations of your relatives ,family and beneficiaries.
How might beneficiaries potentially benefit from a Testamentary Trust?
Your beneficiaries may potentially have the following benefits/advantages:
* Large income tax savings for beneficiaries/Surviving Spouses/Partners
* Beneficiaries under 18 attract special tax concessions
Normally penalty rates of tax apply to income derived from trusts which is paid to children under age 18. The Tax (laws) Act allows persons/children under age 18 who receive income from a testamentary trust to be treated as adults for tax purposes. This may mean large tax savings for beneficiaries who can “split income” with their minor children.
* Possible large capital gains tax (C.G.T.) savings for beneficiaries
A well written testamentary trust can also provide the chance for beneficiaries to minimize Capital Gains Tax which arises from the sale of your assets. Capital Gains Tax is not triggered when an asset belonging to you passes via your Will to your executor or the trustee of a testamentary trust. There is no Capital Gains Tax when your assets are transferred from the trustee of a testamentary trust to a beneficiary – Refer ATO Practice Statement LA 2003/12.
As with the income of the trust, the trustee can choose which of the beneficiaries of the testamentary trust could or should take the capital gain. By choosing to distribute the capital gain to a beneficiary on a low or nil income, the capital gains tax liability can be significantly reduced.
Keeping the property of an estate within a trust offers the beneficiaries an opportunity to put off or defer the sale of property (and therefore capital gains tax) until later on when more numerous beneficiaries/relatives come into existence. Tax payments put off or delayed is tax saved.
* Beneficiary’s inheritance can be protected from bankruptcy
A testamentary trust can provide protection to your beneficiaries from the repercussions of bankruptcy.
* Beneficiary’s inheritance can be protected from family law claims
A testamentary trust may also provide some protection for a beneficiary who is experiencing family law or (now) De Facto difficulties/potential/actual claims in Family/other Courts
If a beneficiary’s entitlement is held in a discretionary after death trust as set out in a Will, the beneficiary ma be able to effectively isolate estate gifts/bequests from personal assets. This may protect his/her inheritance from family/de facto type law property proceedings.
* An inheritance can be kept in the family ;keep Wealth within the Family
The above possible strategies enable you to keep out Predators and Creditors ….
Asset + Property Protection Strategies during your Life just as Important………………………..
We can suggest a number of options or action plans and we will quote you fixed lump sum or range of fees from which we will not deviate.(as long as there are no undisclosed facts or radically changed domestic or other business situations).
Further Questions and Contact Details for Further Enquiries
If you want to talk to Solicitors with required knowledge in preparing modern Wills containing testamentary trusts and other flexible option(s), and you wish to update or amend your Will.
Please make contact with
Alex Tees, GB Legal Asset & Property Protection
Telephone: QLD (07) 4031 7411/ NSW(02) 92813230
Mobile: 0409 813622
Email: [email protected]
If you have an URGENT requirement for 1) Asset/Property Protection while you are alive or 2) need a Will to be done for a Person who has no Will or any other Urgent Enquiry out of ordinary Business Hours Please telephone Alex Tees 0409 813622
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