Keen to maintain your family wealth? Structure spells success

Late in 2018, the comparison website finder.com.au conducted a survey of thousands of Australians and found that about 52% (equivalent to about 10 million citizens if extrapolated to the entire population) did not have a valid will.

The risk of dying intestate is of course that one’s assets are likely to be distributed by your home state’s public trustee, rather than in a way you may prefer. However estate planning, if carried out in a serious way, is much more than just having a valid will.

Of course having a will, and even powers of attorney, are centrally important, but there are many other aspects that relate to the transfer of the wealth that you have spent a lifetime building. And with the blending of families that has become much more common in recent times, estate planning has become more important when dealing with sometimes complex family structures.

So gone are the days where simple wills and powers of attorney sufficed.  In this day and age, it is very common for family groups to have assets held in individual names, discretionary trust structures and self-managed superannuation funds. 

Parties often ignore these structures as part of the estate plan, thinking that a will should be able to deal with the whole lot. However it can be the very structures used in an effective estate plan that can save the day.

Practitioners and advisers are generally well advised to ask plenty of questions of clients to ascertain what they are aiming to achieve. After that, it is up to those advisers to be proactive and work effectively with estate planning solicitors or other legal operatives.

Salient topics generally include:

  • Passing control of family trusts in the estate plan
  • Tax and duty implications and risks of resettlement on amending trust deeds and passing control
  • Controllers, and how to minimise disputes between controllers of a family trust
  • Passing control of SMSFs in the estate plan
  • The need to ensure the SMSF retains complying status on the death of a member
  • Dealing with death benefit payments — the who, how and what.

Tax & Super Australia is hosting a workshop mid-August that will help arm practitioners with the knowledge they need to cover estate planning and structures. The learning objectives include:

  • Identify the planning requirements where family discretionary trusts and SMSFs are part of the ownership structure
  • Identify potential risks and issues where control of family trusts and SMSFs are passed
  • Evaluate the risk of tax being triggered on the passing of control of a family trust
  • Evaluate the tax-effectiveness of a superannuation death benefit pay out on the death of a member and identify who may receive superannuation in the most tax-effective manner
  • Identify opportunities when legal professionals need the input from tax professionals in an estate planning context involving family trusts and SMSFs.

See here for more details.

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