Unit 12 Estate Planning and Family Breakdown

Unit 12 Estate Planning and Family Breakdown - 1/24/2012...

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1/24/2012 1 Unit 12 Estate Planning and Family Breakdown Estate Planning Learning Outcomes Discuss objectives in estate planning and potential client considerations Explain the role of financial advisors in estate planning Discuss the effect of ownership method on the assets distribution after death and the instruments used to specify asset transfer Explain the concepts of estate assets and non-estate assets 2 • Explain the asset distribution consequence of dying intestate • Explain how to construct a valid will and limitation in using a will for estate planning • Discuss the advantages and disadvantages of using testamentary and discretionary trusts for estate planning • Discuss who may receive superannuation benefits of a deceased • Explain different types of power of attorney Estate Planning • A broad interpretation of ‘estate planning’ encompasses the asset acquisition, growth, protection, as well as transfer • Effective estate planning – Ensure assets are protected and distributed according to the wish of client, even after death – Minimise the tax liabilities in the wealth transfer process and in the hands of the recipients • Information required for estate planning helps to “know the client” better and informs other aspects of financial planning 4 The Estate Planning Process 1. Identify and prioritise the client’s objectives 2. Assess current and likely future circumstances 3. Ascertain adequacy of short and long-term funding for achieving objectives 4. Assess options and identify impediments 5. The strategy — formulate the estate plan 6. Implement the estate plan 7. Ongoing review 5 The Role of Estate Planning Advisors Financial advisors need to stay within the limits of the financial advice licence Estate planning often need to include •a taxation advisor to address immediate and potential taxation issues •a legal practitioner to prepare the necessary documentation and provide legal advice • an accountant to attend to day-to-day taxation and accounting issues 6
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1/24/2012 2 Information Needs in Estate Planning • Estate territoriality and client citizenship • Client representation • Family accountabilities: – bloodline – former spouses and partners – other family/tribal accountability – personal network other than family – other accountabilities: this can include matters such as friendship, community, etc • Commercial, corporate, tribal and foreign law responsibilities Estate Planning (Succession) Objectives • Succession of control • Succession of management • Succession of ownership • Preservation of capital • Delivery of substantial income stream to succeeding generations • Establishing equity across blended families and generations Establish the Outcomes • Financial objectives — financial stability for the client, the family and successors as appropriate by: – protecting assets from third party claims – managing the interests of vulnerable beneficiaries
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Unit 12 Estate Planning and Family Breakdown - 1/24/2012...

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