Estate Planning Fact Sheet

The key to ensuring that your Will and other estate planning arrangements achieve your wishes is to regularly review the appropriateness of those arrangements in light of:

• Changes that occur in your own or any beneficiary's circumstances;
• Changes in the ownership of assets and the transfer of wealth into superannuation; and
• Changes in the law.

Set out below are examples of certain changes that have occurred in recent years that may affect the appropriateness of your estate planning arrangements:

• In late 2004 trustees of family trusts and family companies became bound to follow Family Court orders in certain circumstances;
• In 2006 bankruptcy laws were amended to potentially bring assets into the bankruptcy net that were previously protected from a bankruptcy trustee;
• In 2007 significant changes to superannuation and taxation laws were implemented including the introduction of new annual contribution limits, how superannuation death benefits are taxed (particularly so far as adult children are concerned) and the eligibility of adult children to receive an income stream funded by superannuation death benefits;
• A 2006 Court decision has raised doubts on the effectiveness of discretionary trusts as asset protection structures; and
• An increasing trend towards the use of Wills with testamentary trusts designed to protect beneficiaries' inheritances from ex-spouses in family law property settlement claims and from creditors in the case of a beneficiary's personal bankruptcy.

Overlaying these changes has been a significant shift of wealth and assets away from personal ownership to family (discretionary) trusts and superannuation (particularly self managed superannuation funds). This shift has generally diminished the importance a Will once had to determine ownership of assets on death and instead has emphasised a need to carefully consider who has effective control over those trusts and other structures on the death of the founder of the trust etc., to ensure that the founder's estate planning objectives are met.

Contact us if you would like to discuss your particular situation further.

Rebekah Bassano│Associate
E rbassano@prestonlaw.com.au
P 4052 0707

or email: info@prestonlaw.com.au