1 The Need for estate planning Flashcards

0
Q

Identify the three key professionals involved in an estate plan

A

Accountants
Solicitors
Financial advisors

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1
Q

Describe the importance of estate planning

A

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

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2
Q

List the seven processes for designing an estate plan

A
Client objectives
Circumstances
Funding
Options and impediments
Strategies
Implement
Review
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3
Q

List the four client concerns

A

Relationship risk
Capacity
Retirement income support
Family support

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4
Q

List seven reasons that a poorly planned estate plan can come about…

A

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

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5
Q

Role of accountants

A

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

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6
Q

Role of Financial Advisors

A

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

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7
Q

Role of solicitors

A

Draft legal documents
Will and power of attorney
Buy/sell agreements
Assist with obtaining grant of probate

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8
Q

What does estate planning process require (three)

A

Detailed analysis of clients current situation
Understanding of client current needs
Regard for client wishes when they die

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9
Q

Four reasons why clients may seek professional help

A

Minimize tax
Provide financial security
Develop continuity of asset ownership
Implement plans to achieve their objectives

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10
Q

What does the estate planning process mirror?

A

The financial planning process

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11
Q

List the four objectives of estate planning

A

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

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12
Q

List four circumstances

A

Assess current and likely future circumstances
How assets are controlled or owned
Circumstances of the beneficiaries
Beneficiaries at risk

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13
Q

Four funding considerations

A

Funding available?
Existing assets
Wealth accumulation plans
Insurance cover

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14
Q

Two Options and impediments considerations

A

List options available to meet clients objectives

Impediments - lack of funding, inappropriate structures, ages of recipients, vulnerability of recipients

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15
Q

List seven components of estate plan strategy

A
Client's current position 
Concerns the client may have
Objectives the report is addressing
Assumptions made
Details of strategies
Review date
Disclosures and disclaimers that are relevant
16
Q

List three implementation steps

A

After acceptance, recommendations must be implemented
Documentation may be required at this stage - wills, EPOA, buy sell agreements etc
Make it clear who is responsible for what action

17
Q

Two points about review

A

Estate plans should be reviewed regularly - 12 - 18 months

A change in circumstances may effect the chosen strategy

18
Q

Ten questions for clients

A

Who look after their affairs if they lose capacity
Will up to date and cover all contingencies (simultaneous death)
Beneficiaries with special needs
Hold assets outside the jurisdiction
Power of attorney
Who controls family trust on death
How is Super dealt with on death
Interested in giving to charities
Interested in tax effective succession planning
How will business interests be effected on death