Income Tax Return Documents

wills and estate planning - ITR 

Estate Planning

WILLS

It is very important that your wishes and intentions concerning the distribution of your assets and the administration of your Estate after your death, is undertaken by a person or persons who you trust and who shares your sense of fairness and obligation. Failure to make a valid Will, can result in your assets being distributed to persons whom you never intended and can be administered or managed by persons with a significantly different attitude to fairness and responsibility than you. A Will properly prepared by a professional with the experience and wisdom to address such matters, can overcome these potential problems. A Will does not have to be a complicated document, but it is required to use language that is clear and unambiguous. 

Furthermore, current Estate Planning strategies that have become well settled in the Law, can provide protection for the inheritance of your family against the unjust claims of a person or persons whom you never intended to derive a benefit out of your deceased Estate, such as creditors or estranged spouses of a beneficiary of your Estate, through the creation in your Will of a testamentary trust. Unlike family or discretionary trusts, a testamentary trust does not come into existence until you die and the Will incorporating this type of trust, is accepted as your true and lawful last Will and Testament. 

A properly drafted Will can also be the method by which you might pass control of a business or other investments in a manner that gives you some greater assurance that your valuable business assets and investments, that have culminated over time from you expending considerable time and effort and money to achieve, do continue to benefit your dependants and others in whom you intend to derive a benefit. 

It is also important that you review any existing Will you might have had prepared, to ensure that it continues to reflect your underlying wishes and intentions and makes adequate provisions for those who might have a claim against your estate following your death. Changes in the law or changes in legal concepts also can allow for measures to be taken to ensure that your beneficiaries enjoy the optimal tax benefits of the inheritance of your estate, without unnecessarily leaving your estate in a state or structure that unintentionally requires greater tax to be paid than may ordinarily be required.

ENDURING POWER OF ATTORNEY

 An Enduring Power of Attorney is a document under which you appoint one or more persons to manage your legal and financial matters whilst you are alive but have become incapacitated through a mental or physical condition or may be travelling overseas or interstate at a time when important documents are required to be signed in original form on your behalf to advance a personal or business transaction. An Enduring Power of Attorney can be expressed in restrictive terms or in broad unlimited terms, according to the extent of trust and confidence that you have in the person or persons appointed as your Attorney.

As none of us know when we might be struck down with a physical or mental infirmity and/or have a need to go overseas or interstate, the appointment of an Enduring Attorney is highly recommended for every adult person irrespective of their financial status, age or state of health.

The consequences of not making a voluntary appointment of an Enduring Attorney when you have the capacity to do that voluntarily and relatively easily, can give rise to your legal and financial affairs having to be administered by a member of your family or a complete stranger. The legal process required if you do not make a voluntary appointment of an enduring Attorney of your own choosing, is a relatively complex process including an application being made to a Tribunal at considerable costs and expense and with a significant burden being placed upon the Tribunal Appointed Administrator of your affairs to regularly account to the Tribunal or a statutory body of each and every legal and financial undertaking made by that administrator on your behalf during successive periods of time. 

Such a burden and imposition can be avoided by a voluntary appointment by you of an Enduring Attorney of your choice and in a relatively inexpensive manner.

ENDURING POWER OF GUARDIANSHIP

 In recent times, the appointment of a person or persons of your choosing to be empowered to make decisions on your behalf in respect to medical treatment, hospitalisation, life preservation protocols and lifestyle decisions generally when you have lost the capacity to ,make those decisions yourself or have lost the power of communication through physical or mental infirmity, is now undertaken voluntarily through the making of an Enduring Power of Guardianship. 

As with the Enduring Power of Attorney, the making of an Enduring Power of Guardianship is not limited to persons of any particular generation or age group or financial status, as we can all suffer from a mental or physical infirmity at any time and sometimes without adequate prior notice to enable you to voluntarily put an adequate process or decision-making power in place with full effect.

Although the making of an Enduring Power of Guardianship is highly recommended, a person who has particularly strong philosophical or spiritual beliefs concerning the type of medical treatment that he or she wishes to have conducted upon them, can also make a very specific declaration of his or her wishes concerning such medical treatment or life preservation measures through having a document prepared and known as Advanced Health Directive. This document can be relatively specific as to the types of medication, life preservation protocols and other clinical treatments that might be either approved or denied by you depending on your personal view as to preserving or prolonging your life or, alternatively, allowing nature to take its course in the progressive decline in your life. 

SUCCESSION PLANNING FOR DISCRETIONARY OR FAMILY TRUSTS

 A Family or Discretionary Trust is often established at a time when the purposes and objects of the Trust are relatively new and the 'life' of the Trust is expected to be of long duration.

As one's mind turns to Estate Planning, it must also naturally extend to include succession planning of business or investment entities that we control and supervise during our lifetimes but which, by their very nature, do not cease to exist just because we have died. 

Accordingly, it is important to have your family or discretionary Trust Deed reviewed at the same time as you are reviewing your Will, to determine what provisions are included in the Trust Deed for the passing of control of the Trust following your death. Invariably, a Trust may have been formed by a professional person who no longer advises you and who, in any event, may have drawn certain assumptions concerning succession provisions in the Trust Deed of which you may be completely unaware. It is highly recommended that you take advice upon the succession provisions of any Trust Deed for a discretionary or family trust that is controlled by you, so that you can make an informed decision as to whether the succession provisions meet your current expectations and reflect the capacity of persons who may be presently named as your successor. 

A relatively simple Deed of Variation of Trust is often all that is necessary to bring a Discretionary of Family Trust to a status that more appropriately reflects your current family or business circumstances. 

SELF-MANAGED SUPERANNUATION FUND

 The self-managed superannuation fund is a relatively common structure under which many people manage their future retirement investments. The current state of the law is such that it is both prudent and sensible to give some thought to the tax implications of passing your member benefits in a self-managed superannuation fund to members of your family in the most tax effective way.

It is important to understand that your member benefits in either a Retail or Master Trust or Industry Superannuation Fund or a self-managed superannuation fund do not constitute your personal asset and do not automatically form part of your estate when you die.

The law allows you to make a binding death benefit nomination under which you can instruct the Superannuation Trustee to pay your member benefits to one or more beneficiaries or to the legal personal representative of your Estate to be dealt with in the same manner as with other assets of your Estate following your death. Although a superannuation trustee has a degree of discretion as to the beneficiary or recipient of your member benefits in the superannuation fund following your death, generally most superannuation trustees will give due notice and accord to your written nomination of beneficiary of your member benefits in the fund. Although the current law generally only permits a binding death benefit nomination under a Retail or Master Superannuation Fund to endure as a binding nomination of your wishes for 3 years following it being made, a member of a self-managed superannuation fund may be able to make a non-lapsing binding death benefit nomination to the self-managed superannuation trustee that is consistent with the intentions of the member under his or her Will.

PROFESSIONAL DUTY AND RESPONSIBILITY

 It is part of the professional duties and responsibilities to you as a client of Aspen Corporate that you are provided with this summary information and given our high recommendation that you discuss with us a regular review of your estate planning strategies. Such review may include consideration of each of these documents/strategies upon which it might be appropriate for you to receive and take advice from Aspen Corporate and either your own Lawyer or Estate Planning Lawyers in whom we have trust and confidence. 

Speak to your Aspen Corporate advisor today to discuss wills and estate planning.