Family succession planning: common 15 mistakes Matthew Dunstone Matthew Dunstone is an Authorised Representative of RI Advice Group Pty Ltd

1 Disclaimer Important Notice RI Advice Group Pty Ltd, ABN , holds Australian Financial Services Licence Number and is licensed to provide financial product advice and deal in financial products such as: deposit and payment products, derivatives, life products, managed investment schemes including investor directed portfolio services, securities, superannuation, Retirement Savings Accounts. The information presented in this seminar is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. RI Advice Group strongly suggests that no person should act specifically on the basis of the information contained herein but should obtain appropriate professional advice based on their own circumstances.

2 RI Advice Group: our credentials Experienced –Over 30 years experience –Over 80,000 clients –Over $10b under advice Professional personal advice Advice underpinned by quality research and technical teams Over 110 offices nationwide Global company

3 Agenda What is Family Succession Planning ? 15 most common mistakes - Family Succession Planning What can go wrong ? - Peter Brock ‘s legacy The cost of getting it wrong Taxation considerations Other important considerations Our Family Succession Planning service

4 What Is Family Succession Planning? Ensuring that, no matter when: … the right assets (in quantum and form)... … go to the right people (where and to whom)…... at the right time … …in the right manner (i.e. free from disputes)… … net of the right tax (as little as possible).

5 15 most common mistakes – Family Succession Planning  Not leaving a Will –45% of Australians die without a Will *  Not providing for your dependants - dependants not ‘adequately provided for’ from your estate may contest your Will  Being ambiguous * Australian Bureau of Statistics

6 15 common mistakes… FIVE THOUSAND DOLLARS ($25,000) to the sons of my husband’s brother whose name I believe is XXXX, my husband having lived in the town of XXXX Germany. An ambiguous Will

7 15 common mistakes… 4.Not specifying debts to be paid 5.Not taking tax into account - capital gains tax - tax on superannuation benefits paid to non-dependants 6.Writing an ‘informal’ Will

8 7.Not nominating Guardians 8. Bequeathing assets you don’t ‘own’ - jointly owned assets - property held in trust, - business partnership property, - proceeds of life insurance policies, - your superannuation 9.Assuming your super will bypass your estate 15 common mistakes…

9 10. Using beneficiaries as witnesses - avoid having beneficiaries or their spouses witness your Will 11. Appointing a beneficiary as executor 12. Not granting adequate power to executors

10 15 common mistakes… 13.Not communicating with your executors and beneficiaries 14.Not making provision for a residue 15.Not keeping your Will up-to-date –estate assets and non-estate assets change –families and family dynamics change –needs and responsibilities change –laws change –goals and objectives change

11 What can go wrong ? Peter Brock’s legacy: a ‘Panorama of chaos’ During his racing career Peter Brock was firmly in control as his many victories clearly demonstrated But ……upon his death (September 2006), his family found that he had lost control of his personal financial affairs

12 What can go wrong ? Peter Brock’s legacy: a ‘Panorama of chaos’ He lived a complicated personal life He left a complicated estate with no clear, unambiguous will – he in fact left three Wills! Led to Supreme Court proceedings at great financial and emotional expense to his family

13 The cost of getting it wrong Family disputes Legal fees Delayed distribution Unhappy beneficiaries Tax liability

14 Taxation considerations Keep accurate records Offset capital gains against losses Bequeath CGT assets to low marginal tax beneficiaries Consider use of testamentary trusts Specify donations to be net of tax - or to go to an approved foundation or registered charity CGT implications for non resident beneficiaries

15 Whilst only 55% of us have Wills, a far lesser portion have Wills that are as effective as they could be. For instance... Blended Families You should consider trusts as they can provide for your: children new partner non-blood children the ‘ex’ spouse/partner Other important considerations

16 Superannuation Death Benefit Nominations may also be used to direct your superannuation monies appropriately binding v non-binding nominations Other important considerations

17 Our Family Succession Planning service Protect your loved ones with a plan with: the right funds for lifestyle maintenance, children’s education, debt cancellation in the right hands - partner / spouse, children, grandchildren, charities, minimise tax at the right time – a mix of immediate, medium and long term needs

18 Our Family Succession Planning service Part of a comprehensive review of your financial situation: –now –and your family’s future We work with a panel of lawyers who are specialists in the field of family succession planning ** ADD TO or AMEND THIS SLIDE as appropriate for our service

19 Our Family Succession Planning service Questions?

Thank you for attending Matt Dunstone - General Manager RI Surrey Hills 400 Canterbury Road, Surrey Hills