Tax Effective 3-Generation Testamentary Trust Mirror Wills

 

You are building two Tax Effective Mirror Wills. They each contain a 3-Generation Testamentary Trust. In the first instance, you leave everything to each other. After you both die, you leave everything to the same beneficiaries. (To save time you can instead build the Couples Bundle which also includes the four Powers of Attorney.)

Not leaving everything to each other? Then build two separate single Wills instead.

The Wills protect your family from losing their inheritance from tax, bankruptcy and divorce.

And to the taxman, I leave…

Every year, Australian taxpayers voluntarily pay the government millions of dollars in ‘death taxes‘. The 4 defacto death duties are:

1. Capital Gains Tax
2. Stamp Duty
3. Income tax
4. Up to 32% in non-dependency Superannuation tax

Are you going to be one of them? Proper Estate Planning ensures that your estate goes to those you care about. Not the Tax Man.

3-Generation Testamentary Trusts

Professor Brett Davies invented Testamentary Trusts in 1994. In 1997 he then invented the 3-Generation Testamentary Trust. The 3-Generation Testamentary Trusts’ additional advantages include:

1. better tax advantages
2. generally, pay no tax on the estate income for 80 years
3. works for three generations: spouse, children and grandchildren
4. discretionary of nature: a beneficiary can choose not to set up any trusts
5. wound up when no longer required
6. each beneficiary gets their own 3-Generation Testamentary Trust
7. the children when acting unanimously can divide up the class of assets differently. Say you have $1m in shares, $1m in property and $1m in cash. One of your children can take all of the shares. The other the property. The remaining child takes the cash. There is no CGT and stamp duty.

32% Tax on Super going to adult children

After you and your spouse die your adult children pay 17% or 32% on your Super.  That is a non-dependancy tax. It is on your concessional superannuation. Our Super Testamentary Trust, which you get in these two Wills, seeks to reduce this tax to zero.

Divorcing children

The Divorce Protection Trust delays or stops any capital or income going to the beneficiary who is suffering from divorce or separation proceedings. It is designed to reduce the opportunity for the Family Court to get its hands on your money.

The Divorce Protection Trust sits dormant in the Will until needed. The Divorce Protection Trust activates for the benefit of the married person and that person’s children and grandchildren. It removes that person’s power to control the trust while they are suffering from the separation.

The Divorce Protection Trust benefits the current and succeeding generations. This helps protect the assets from the Family Court.

Free storage and monitoring of your signed Wills

You can store a signed Will at home, at the bank or with the Executors. Alternatively, you can store your signed Wills with a law firm that specialises in Will storage. There is no cost to you. After you have signed your Wills, email us on how to store your Wills for free.

Once your signed Wills are put in that law firm’s safe custody they are monitored. That law firm monitors death notices. When you die the law firm holding your original Will uses its best endeavours to get the original Will into your executor’s hands. They also help and support your executors on how to administer the deceased estate and help set up the many trusts contained in your Will. The storage of your Will is a free service.

You are building two Testamentary Trust Mirror Wills. They automatically include:

1. 3-Generation Testamentary Trusts – reduces CGT, income tax & stamp duty for up to 80 years from the date of death
2. Superannuation Testamentary Trust – stops the 17% or 32% tax on Super going to adult children
3. Bankruptcy Trusts – if a beneficiary is bankrupt
4. Divorce Protection Trust – if a child separates stops Family Court taking your money
5. Maintenance Trust – if the beneficiary is under 18 or vulnerable
6. Special Disability Trusts – so your loved ones continue to get Centrelink
7. Guardianship clauses if any beneficiary (including children and grandchildren) are under 18