Estate Planning Standards

 

Best practice for accountants and advisers building Wills on our law firm’s website

Welcome to Legal Consolidated’s Estate Planning Standard Policy. The Best Practice Policy is for Accountants, Licensees and Advisers.

There is an obligation by accountants and advisers to initiate, explain and support the needs of a client’s:

• Estate Planning
• Tax effective Wills
• Medical/Lifestyle Powers of Attorney, Guardianships and Appointing Medical Treatment Decision Maker
• Enduring Powers of Attorney
• Contractual Will Agreements – for second marriages
• Loans to Children – to escape the bankruptcy and family court
• Deed of Gift
• Forgive a Debt Agreement
• Changing control of a Family Trust at death

Advisers and accountants have a close ongoing relationship with their clients. A natural extension of this relationship is discussing estate planning. While a lawyer may see a client for a few hours, an adviser and accountant hold a special fiduciary relationship with their clients. They have unparalleled knowledge of the client’s family circumstances and overall affairs.

Often the client, even after many years of requests, still ‘can’t find the time’ to see a taxation lawyer to attend to their Estate Planning. Even then what can a lawyer learn in a few hours – versus the continual ongoing relationship with the accountant and financial planner?

The best solution is for the adviser and accountant to be the centre of the universe when it comes to Estate Planning. And build the Estate Planning documents on the law firm’s website. The law firm remains responsible for the Estate Planning documents.

You are building two documents:

Our law firm’s skill in Estate Planning

I am an Adjunct Professor lecturing both the Estate Planning and Superannuation units at a number of universities around Australia. I have done so since 1999.

Of my seven degrees, four of them are in law including my doctorate. My research was in Estate Planning and succession planning.

I author the two Australian leading textbooks on Estate Planning: CCH Australian Estate Planning and Thompson Reuters’ Australian Financial Planning Handbook.

Our ‘3-Generation Testamentary Trusts’ include:

• 3-Generation Testamentary Trusts – reduces CGT, Stamp duty and income tax for 80 years from the date of death
• Super Testamentary Trust – reduces the 17% and 32% tax on Superannuation going to adult children
• Bankruptcy Trusts – if a beneficiary is bankrupt
• Divorce Protection Trust – if a child separates
• Maintenance Trust – where beneficiaries under 18 years of age or unstable

Best Practice in building Estate Planning documents

Build these two documents. They provide you with best practice in building legal documents on our website.

You do the Estate Planing – or risk losing our client to another accounting house

An accountant’s client dies.

The client dies with only one asset. This is $100,000 in life insurance. It is in his Superannuation. The beneficiary children are over 18 years of age. So, there is a 32% non-dependency tax.

The children pay $32,000 in tax!

Why is there no Superannuation Testamentary Trust in the Will? This often reduces the non-dependency tax on the Super to zero.

I telephone the lawyer who prepared the Will to find out why. To protect him I call him Robert:
	Brett	Robert, why didn’t you put a Superannuation Testamentary Trust in the Will?
	Robert	I only practice in family law. There is a tax on Super at death? I didn’t know that. Anyway, my cover letter says that I don’t do taxes. In future, I will note that I also don’t give advice on Superannuation.
	Brett	But Robert why didn’t you speak with the client’s accountant?
	Robert	I didn’t see a need. After all, I am the lawyer, not them.

As the accountant and financial planner you are the centre of the universe. You get the team together. You are the project manager of the estate planning process.

Build the Estate Planning Quality Assurance Manual. The Manual authorises you to build Estate Planning documents on our website, throughout Australia, including the:

• 3-Generation Testamentary Trust Will
• Enduring and Medical/Lifestyle POAs

We look forward to helping you grow your Estate Planning practice.

New profit centre for Accountants and Financial Advisers:

Estate Planning

Some people incorrectly limit Estate Planning to a lawyer making a Will.

I have prepared an email for you to send to your clients setting them straight. Estate Planning is best managed by the trusted Accountant or Financial Planner.

Build, for your clients, these Estate Planning documents on our website:

1. 3-Generation Testamentary Trust Wills
2. Power of Attorneys
3. Medical Power of Attorneys

You are entitled to charge your normal fees for providing the work on the Estate Planning file.

Every document you build, for your clients, includes our law firm letter confirming we authored the document.

We are Australia’s only law firm providing legal documents online.
Your clients benefit from:

• law firm Professional Indemnity insurance
• legal professional privilege
• free legal advice, from us, as you build the documents
• document sample with explanatory notes

There are many hints and training videos as you build the Wills, POAs and Medical POAs online. Please contact me or my lawyers for help as you build the documents.

Keep control. Protect your clients.

Send this email below to your clients.

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Dear client,

Every year, Australian tax payers voluntarily pay the Tax Office millions of dollars in “Death Taxes”.
I am going to make sure you are not going to be one of them.
Proper Estate Planning ensures that your estate goes to those you care about, and not the Tax Man.

Does the “Simple Will” protect your family?

Many people believe that their affairs are simple. You may wish to simply leave everything to your spouse, and if they die before you, then to your children. Simple. Right? Unfortunately, this is rarely the case.
There are pitfalls of preparing a “Simple Will”. A “Simple Will” may seem to fulfil your needs on the surface, but there are often many other issues that you may not have considered.
I am going to make certain that your estate goes to your family and loved ones – and not the Tax Man.

Will the Tax Man smile when I die?

Imagine $1.5 trillion “up for grabs!” That is the projected total value of estates from Australians who die in the next 20 years. The question is, who gets that money: the Tax Man, Trustee Companies or your family?
Careful planning reduces Capital Gains Tax, Stamp Duty, income tax and the 17% or 32% superannuation tax on adult children. A 3-Generation Testamentary Trust and Superannuation Testamentary Trust provides the best protection for your family.
A 3-Generation Testamentary Trust is the most effective safeguard to put into your Will to dampen the effects of Capital Gains Tax and Stamp Duty.

This is an example of a Will without a 3-Generation Testamentary Trust:

Tom always wanted to build his retirement home on the canals where he had purchased a block a few years ago. Unfortunately, Tom died before realising his dream to build on the block.

As a dutiful husband, Tom left everything to his much-loved wife Jenny.

Little did Tom know, but Jenny never shared Tom’s vision to live by the canals. Their 2 children did share Dad’s vision. Jenny decided to give the children the block of land. After all, it was now interfering with her aged pension and pharmaceutical entitlements.

The gift made the children excited. The block had increased in value to $175,000. However, the children were less excited when they got a Stamp Duty bill of over $4,200.

Later, Jenny gets a notice from the Tax Office to pay Capital Gains Tax of $28,000.00 on the “disposal” of the block. (“But I just gave it away!” she lamented)

The nightmare continues when Centrelink advises Jenny that the gift reduces her entitlements because of the Non-Abandonment rule.

Tom could have put 3-Generation Testamentary Trusts into his Will. Tom’s Will then leaves everything to his wife, children and extended family. Tom also makes his wife Trustee of the 3-Generation Testamentary Trust. Jenny controls the assets but does not own the assets for tax purposes.

Does that mean that Tom’s estate goes to Tom’s mother-in-law and Uncle Harry? Do the children have control over what Jenny does with her husband’s estate?
No, to both questions.

Jenny has full control of who gets what from the estate. With a Testamentary Trust, Jenny can give everything to herself or give some things to the children, grandchildren or any of the extended family as she so wishes. With her Accountant’s help, Jenny can take advantage of the lower income tax rates paid by some members of her family. Now that is flexibility.

Flexibility: 3-Generation Testamentary Trust?

In the above case, Jenny could have merely distributed the block to her children through Tom’s Will. Even if the transfer took place years after Tom’s death, the transfer is direct from Tom to his children. Therefore:

• No stamp duty is payable because Jenny did not own the land – she merely controlled the land in the Testamentary
• There is no “disposal” of the asset. Therefore, Jenny does not have a Capital Gains Tax bill – CGT Generation Skipping.
• Alternatively, the asset could have been kept out of Jenny’s hands to protect her Centrelink

Stop government meddling?

Mutual Power of Attorneys and Cascading Power of Attorneys

Sadly, your spouse gets Alzheimer’s disease at 61 years of age. Your children have left home. You decide to sell the large family home. You want to buy a smaller home closer to amenities that can help your spouse.
The family home is in both your names. Your spouse no longer has the legal capacity to sell the home. While there are many different types of Power of Attorney, you have none. Therefore, your only option is to apply to a government instrumentality for permission to sell the home.

During this Tribunal procedure, your children are asked to swear in court as to whether you are a “spendthrift”. Other people such as friends, other family members and even nosey neighbours may be contacted by the government to see whether they support your application. At the hearing, you are cross- examined as to whether you are a “good person” to look after the affairs of your partner.

Eventually, this government department tells you that you are allowed to sell your home. However, it can direct that you hold your spouse’s half of the proceeds in a separate bank account. If you need to buy toilet paper for your partner then you may need to provide a receipt.
Without all the proceeds of the sale of the home, you cannot afford to buy another property.
Overcome the government’s meddling with both a Mutual Power of Attorney and a Cascading Power of Attorney.

What do I do now?

Please contact me. I will build the estate planning documents you need with our lawyers.
These estate planning documents include:

1. 3-Generation Testamentary Trust Wills
2. Power of Attorneys
3. Medical Power of Attorneys

The cost for Estate Planning is $……………. This includes everything you need to fully prepare your entire Estate Plan.

Kind regards,

Your Name