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7 Cards in this Set
- Front
- Back
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What are the objectives in estate planning? |
1. Identify and prioritise client objectives 2. Assess current and likely future circumstance 3. Assess adequacy of short or long term funding 4. Assess options and identify impediments 5. Strategy - formulate estate plan 6. Implement 7. Ongoing review |
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What's the role of the estate planning advisor ? |
Stay within limits of financial advice license. Will need to include: Taxation advisory Legal practitioner Accountant to attend day to day tax and accounting issues |
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What is died interstate? What does it mean? |
Means you die without a will. Deceased's family members will need to apply for letters of administration before gaining any assets. In NSW law, if there is no will, the assets go to children, if no children, then spouse. If both children and spouse are alive, spouse gets the first 350k, the excess is then equally divided amongst children. If only children left, the money is divided equally . If no children or spouse -> next of kin -> government |
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What is a will? Who can make one ? |
Will is document where individual names beneficiaries for their estate assets on the occassions that they die. Must be over 18 years old with testamentary capacity. There is no need for a legal practitioner. An executor is responsible for ensuring will and estate assets are duly administered. Limitations :family testator clause. Only estate assets can be distributed by will and estate assets are exposed to creditors claim. |
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Discuss estate vs non estate assets |
Estate:available to fund bequests to clients beneficiaries under the clients will. They are vulnerable to changes in the will or whether the client does bankrupt. They are fully assessable in the hands of the client for social security purposes. Non estate assets : not available to fund bequests under clients will. They are protected from challenges to clients will. They cannot be accessed by financial creditors if client is bankruptcy. It may remain assessable for social security reasons. |
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Discuss advantages and disadvantages of a testamentary trust |
A testamentary trust is established by will, funded by assets of deceased estate. It's administered by executor of the estate/trustee appointed in accordance to the will. Advantages: ability to provide asset protection for intended beneficiaries Ability to transfer use, enjoyment and benefits of assets with other family members with reduced transfer costs Income tax advantages Disadvantages: poorly drafted trusts in inappropriate circumstances can be a nuisance or a devalue in inheritance. |
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What is a discretionary trust ? |
Trust where disposition of trust assets are controlled by trust deed. Protected from claims made against client personally , and protected from claims made on clients estate in event of death. Can outlive client, hence there is a question on how to deal with control of the vehicle which is important. Trustee is the legal owner of assets and therefore is noted on share, land and other asset registers as owner of trust assets. Administered by trustee. Appointer can hire or fire the trustee. |
