1. CUTTING EDGE ESTATE PLANNING TECHNIQUES
NSW 8TH ANNUAL TAX FORUM
CUTTING EDGE ESTATE PLANNING TECHNIQUES

2. Introduction You can rule from the grave Estate Planning Revenue Issue
Family Law
Ownership of assets
Asset protection

3. The Family Constitution
What is it?
Objective purpose
Parties
Process
Issues to be covered
How to make them work
Relevance
Binding agreement - deed

4. Strategies for Preparing a Family Constitution
Approach
Central structure
Double trusts
Family law/ Lineal Issue trusts
Shareholder/director control
Provision when child dies
Communication
Income entitlements

5. Case Studies Bill and Colleen Operating business family managed
Parents wish to retire
Pass the baton to the next generation
Structure
Pre and post DOFA

6. Bill & Colleen Pre DOFA
Bill
Colleen
50 %
50 %
Widget Pty Ltd

7. Post DOFA & Deaths of Bill & Colleen
6 Next Generation – Shareholders / Directors
Widget Nominees Pty Ltd
Bill & Colleen
Will Trust
Widget Family
Trust
100%
Ord Shares
Div. Access Shares
Widget Pty Ltd

8. Case Studies Geoff and Mary Large family investment
Parents wish to protect the next generation
Maintain and grow investment
Structure
Pre and pose DOFA

9. Shopping Centre Co Pty Ltd
Geoff & Mary Pre DOFA
Geoff
Mary
1 Share
1 Share
Geoff & Mary
Nominees Pty Ltd
Steve Nominees
Pty Ltd
Geoff & Mary
Family Trust
Steve
Family Trust
50%
50%
Shopping Centre Co Pty Ltd

10. Geoff & Mary – Post DOFA Shopping Centre Pty Ltd Geoff Next Gen L
Next Gen T
Mary
(Shares)
(Shares)
(Shares)
Next Gen Nominees Pty Ltd Independent Director G & M Nominees Pty Ltd
(Trustee)
Next Gen T
Family Trust
(Trustee)
G & M Family
Trust
(Beneficiaries)
Steve
Next Gen L
Family Trust
50%
50%
Shopping Centre Pty Ltd

11. Case Studies Alex and Pat Major operating business
Independent management
Property investments
Control the issue
Structure
Pre and post DOFA

12. Operating Business Pty Ltd
Alex & Pat Pre DOFA
A & P Family
Trust
Alex
Pat
(Dividend Access)
(Ord)
(Ord)
Holding Co Pty Ltd
100 %
Operating Business Pty Ltd

13. Alex & Pat – Post DOFA A & P Nominees Pty Limited (Trustee)
Next
Gen 1
Next
Gen 2
Next
Gen 3
Next
Gen 4
(Shares)
A & P Nominees Pty Limited (Trustee)
(General Partner)
Alex
Pat
Next
Gen 1 FT
Next
Gen 2 FT
Next
Gen 3 FT
Next
Gen 4 FT
Alex
Pat
A & P Limited Partnership
(Ord)
(Ord)
(Dividend Access)
Holding Co Pty Ltd
100 %
Operating Business Pty Ltd

14. Benefits Achieved in the Case Studies
Family agreement for managing the business
The ownership and control protected under Linear Issue structure
Agreed flow of income
Adoption of capital distribution policies
Use of independent directors/arbitrators to avoid conflicts, non-commercial and differing social objectives
Segregating ownership and control of core assets from the investments of Next Gen members

15. Benefits Achieved in the Case Studies
Decision making and control was with the family group as a whole
Minimal adverse tax and stamp duty consequences
Family law issues
Family members to discuss critical issues in fair and reasonable manner
The professional advisers to add value

16. Benefits Achieved in the Case Studies
The addressing of relationships after the death of the parents
Accepted by family members as a formal agreement and legally binding
A mechanism in place to ensure that the estate plan was effective