1. Estate Planning Presentation Before and After Alex Tees, Tel02 9281 3230/0409813622 Solicitor, Estate Planning Adviser Email atees@bigpond.com

2. Important disclaimer

No person should rely on any part of the contents of this presentation without first obtaining advice from a qualified professional person. This presentation is given on the terms and understanding that the author is not responsible for the results of any actions taken on the basis of information in this presentation, nor for any error in or omission from this presentation. The author hereby expressly disclaims all and any liability and responsibility to any person, whether a purchaser, recipient or reader of this presentation or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this presentation.

3. MODERN SUCCESSION&ESTATE PLANNING

Due to increasing complexity in family relationships and business/investment structuring, along with complicated tax and legal regimes - modern estate planning, done properly, must encompass issues such as:

• Efficient intergenerational transfer of wealth with harmony

• Asset protection ( Keeping out Predators/Creditors & Keeping the Wealth in the Family)

• Tax (at both State and Federal level)

• Superannuation(Formation + Review of Deeds)

• Trusts(Formation + Review of Deeds)

• Investments/insurance structuring

• Resolution of disputes and other issues through the use ofan Independent Referree Dispute Resolution

4. WHATLawyers shouldDO inco-operation with Accountants and Financial Planners

Provision ofstrategiesandadviceincollaboration with other professionals( Accountants/Financial Planners) to deliver the optimum outcome(s) for client (s):

• Modern Estate Planning Strategies

• (Before and after death )

• Testamentary Trusts( Trusts created after death)

• Family Trusts

• Self-managed superannuation funds (SMSF)

• Business succession planning.( a will for a Business)

5. Estate Planning - HOWa Lawyer should and can OPERATE

Timeframes agreed with client and referrer at each stage toensure efficient completion and accountability

Fixed Fees or a fixed range of fees&the First meeting with client(s) is purely a scoping exercise &obligation free ( often inAccountants/Financial Planners office )

Collaboration /Reporting to Accountant/FinPlanner at each stage=Further Fee &protection opportunities..for you

Systematic and efficient delivery ( x 3 Meetings)

Technical and client-related queries welcomed from all Referrers/Client(s)

Referral to other Specialist Tax Services

6. Why is it different ? -the way it is recommended to operate compared toOTHER LAW FIRMS ?

High level technical expertise in superannuation , taxation , and Trust law Solicitor(s)should work with and haveaccess to the resources ofAccounting advisory firms .(throughout the World)

Specialist Solicitors who understand and appreciate the Financial planning process, work togetherwith Clients Financial Planners & Accountants.

Encourage First meetings/other meetings at Financial Planners/Accountants office and/or clients home/office.

Fixed price contracts (or Fixed Range) ( Approx 75% Tax Deduction )

Comprehensive Estate Planning Portfolio / Folder.

Deliverymeetings canbe Optional Family meetings to include the children builds bridges to next generation

7. A Modern Will Creative use of Trusts after Death(as well as* Other structures)

Will Maker/Testator makes a Will to flexibly provide ;

Optional Testamentary Trust or other *Structures created after Death(*Note Tax laws may change !?)

Beneficiaries Persons receiving Money & Property , receive it via a Trust of which they or their Nominated Person become Trustee

Provides Tax Efficiency and Assett Protection

* If the law changes Provision for Other Structures such as Partnerships, Joint Ventures and different types ofCompanies/Corporations may be necessary..

8. Example Optional Trusts After Death EXECUTOR(May not be the same Person) TRUSTEE (S)TRUST TRUST TRUST 9.

• EXECUTORWILL

The Efficient Will *Possible use of Trusts after Death.. Optional DiscretionaryTestamentary Trust ! E Trustee

• Tax savings, especially for minor beneficiaries

• Flexibility of distributions

• Asset protection for trust assets

Beneficiaries include: ( THOSE RECEIVING GIFTS )

• Primary Beneficiary Surviving Spouse/Children

• Family Members

• Related Entities

Trustee - Primary Beneficiary ( Surviving Spouse/ Children) B 10. Case Study 1 Wealthy Woman marries a much less Wealthy Gentleman Who Needs Protection ?

Assets and Possible Family Situation

( Married or Unmarried)

Possibly have one child

Woman owns a House/Property

Woman a High income earner/ & Wealthy

Perhaps the Husband will never have a high income earning capacity

11. Case Study 1 -ESTATE PLANNING - WISHES & Concerns -Whose ? !!

Protect the child if both or One Spouse dies

Ensure Husband does not receive too much loot from His Wealthy Wife if she dies first ? ( & Protect the Child as well !)

Ensure the Husband at least has a Roof over his head and adequate provision while he cares for the child if Wife dies before him

Ensure Equity & Sensitivity

12. Case Study 1 -Possible Strategies

A Separate Care for the Spouse Trust for the Husband with little wealth

A Separate Trust for the Husband with sufficient Money/Property

A Separate Trust for the child with another relative of the Wife as Trustee (Husband given right to occupy Family Home for life ,while Child receives all the Wifes Estate)

Recommend and Ensure theHusband owns Adequate & generous Life Insurance over the Life of his Wife in case she dies first.

13. Case Study 2 George & Marina

George 55, Marina54- both retired

Children ; Jessica 27 (De Facto),

Sarah , 22 (Married)

Jack 21, (Has a Disability, numerous Partners)

14. Case Study 2 George & Marina

ASSETS

Home Joint tenants InvestmentProperty 1 Joint tenants Managed funds SMSF (Self Managed Super Fund) Shares SMSF Direct property SMSF 15. Case Study 2 George & Marina

ESTATE PLANNING - Wishes & Concerns

• George to Marina and vice versa in the first instance

• Then equally to children

• Specific protection required for Jack due to disability

• Wealth to beretained in the family

• Derive some tax efficiency

16. Case Study 2 George & Marina

Possible STRATEGIES

Estate Assets Testamentary Trusts & *other optional Structure (s) Family Home Sever tenancy Investment Property 1 Sever tenancy SMSF (Super Fund) BDBN (Binding Death Benefit Nomination) 17. Case Study 2 George & Marina

STRATEGIE(S) - WILLS

Concern Strategy Protection of family wealth from spousal and other claims Testamentary Trusts (TTs) & other Structures with crisis provisions (removal of Trustees, Directors, Controllers etc) Protection for Jack - Control- Conflicts of interest Protective Trust - Family control - Testamentary Protector Understanding of non-estate assets and planning required Sever joint tenancy (Family Home) Cascading Binding Death Benefit Nominations (Super) 18. STRATEGIES SMSF- SuperFunds

Concerns & Strategy

Maximise superannuation benefits during lifetime,

potential inability of survivor to recontribute to super

- Use Reversionary pensions

Optimising tax with protection

(*BDBN = Binding Death Benefit Nomination) - Cascading *BDBNs

- first, reversionary

- then, *LPR

(* Legal PersonalRepresentative )

Ongoing control of SMSF -Corporate Trustee appropriate ?

19. Other Possible Strategies Some Non Estate Property Family Trusts /Super

Concerns & Strategy

1) Transition of control of Family Trust -Trust Deed Review

- Deed ofFuture Dealing / Alter Trust Deed

( to take in succession)

2) The Business Release of value in the business

how to pass on to family

-Business Succession Agreement A Will for a Business

3) Superannuation Nominate LPR as beneficiary,

Insurance(s) Nominate LPR as beneficiary

20. Case Study 3 Simpler Case

FAMILY SITUATION

Jack, 53&Jill 49 - both still working

4 children:

• • • Mark 23 single (Jacks child first marriage)

• • • Steve 21 single, (Jacks child first marriage)

• • • Marina 20 De Facto (Jills child 1 stmarriage )

• • • Helena , Age 3(Jack & Jills child 2 ndMarriage)

21. Case Study 3Jack & Jill - Assets

Home - Joint tenants

Investment property Joint Tenant

SMSF (Self Managed Super Fund)

Shares SMSF

22. Jack & Jill (not over the Hill) (3)

Possible ESTATE PLANNING WISHES & Concerns

• Jack to Jill and vice versa in the first instance

• Then equally to children

• Specific protection required for Helena due to young age

• Keep wealth in Family ;Wealth to beretained in the family

• Derive some tax efficiency

23. After Jack & Jill Die . (3)

Some Strategies :

1.Estate Assets Optional TestamentaryTrusts

2.Home -Sever Jointtenancy

3.Investment Prop- Sever Joint tenancy

4.SMSF (Super Fund) - BDBN

(Binding Death Benefit Nomination(s)

24. General Wills Strategies

STRATEGIES WILLS(cont)

Concern Strategy Tax efficiency Trust structure - income splitting properties - 102AG concessions for minors Executors discretions Ability for younger beneficiaries to fritter-away wealth Qualifying Age eg 25 Young Mens disease(beware young ladies disease as well !) Estate conflicts LoansEqualisation provisions 25. Summary

No twostrategiesare the same

No two Testamentary Trusts are the same

Strategy must be consistent and coherent across estate and non-estate assets

Mustbe a collaborative approach Advisers/Lawyers

Dont forget Enduring Powers of Attorney /Guardianship

Specialiststrategy and intellectual property no one size fits all

26. Thank You ! Reminder Optimal Process

Any Questions ?TelAlex Tees,

0409813622 / 02 9281 3230[email_address]

Process ;

Get Facts Straight List Assets/Property

Compare Notes with Clients Accountant, Financial Planner

Interview to Confirm instructions

Explanation/Signing Interview

OptionalFamily Meeting ?