1 The Need for estate planning Flashcards
Identify the three key professionals involved in an estate plan
Accountants
Solicitors
Financial advisors
Describe the importance of estate planning
Estate planning is an important part of financial planning
Lifetime decisions have a large impact on estate planning
Tax planning and financial planning are relevant for estate planning
List the seven processes for designing an estate plan
Client objectives Circumstances Funding Options and impediments Strategies Implement Review
List the four client concerns
Relationship risk
Capacity
Retirement income support
Family support
List seven reasons that a poorly planned estate plan can come about…
Absence of a will
Poorly drafted will
Plan not reflecting circumstances of beneficiaries
Lack of thought on ownership structures
Potential challenges
Tax consequences
Lack of regard of debt of client and related entities
Role of accountants
CGT Analysis
Prior year, date of death tax return and any estate tax returns
Tax payable on super benefits in event of death
Identification and documentation of business structures of the client including any liabilities
Role of Financial Advisors
Structure and ownership of business and investment assets
Wording of business and other agreements
Choice of super fund
Choice of trustee and appointee of
Discretionary trust
Binding nominations by SF members to trustees
Ownership and beneficiaries of life ins and other ins
Review negatively or highly geared assets
Decisions regarding future control of assets
Forgiveness of debt
Role of solicitors
Draft legal documents
Will and power of attorney
Buy/sell agreements
Assist with obtaining grant of probate
What does estate planning process require (three)
Detailed analysis of clients current situation
Understanding of client current needs
Regard for client wishes when they die
Four reasons why clients may seek professional help
Minimize tax
Provide financial security
Develop continuity of asset ownership
Implement plans to achieve their objectives
What does the estate planning process mirror?
The financial planning process
List the four objectives of estate planning
Identify and priorities objectives
Who does client want to benefit
What priority to each beneficiary
Specific objectives - eg supporting a spouse, education, vulnerable relatives, family business
List four circumstances
Assess current and likely future circumstances
How assets are controlled or owned
Circumstances of the beneficiaries
Beneficiaries at risk
Four funding considerations
Funding available?
Existing assets
Wealth accumulation plans
Insurance cover
Two Options and impediments considerations
List options available to meet clients objectives
Impediments - lack of funding, inappropriate structures, ages of recipients, vulnerability of recipients