Sam decided to SUPER charge her estate plan!
Sam recently messaged us on LinkedIn… it was a Friday
Hi Caroline, I’m thinking of getting a Testamentary Trust done, do you do them?
You bet we do and here we call them SuperWills!
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Caroline Cavanagh here your estate planning lawyer with a twist!
I’m also an investor, writer, crossfit enthusiast and money coach.
After developing my practice, I realized that most clients were unaware of the benefits of Testamentary Trusts!
In fact, most lawyers don’t even understand them or discuss them with their clients.
Stay with me here, I am passionate about the opportunities they offer everyday Australian families to build and preserve wealth for the next generation.
I have made it my mission to help you understand what a Testamentary Trust is all about.
What is a SuperWill
A SuperWill is our name for Will that allows a Testamentary Trust to come into operation when the Will maker passes. From now on we will just call them a TT for short.
A TT is a legally protected environment kind of like your Superannuation, if you get personally sued, no one can attack your Super but the downside is you have to wait until your retirement age to draw an income from your current super fund. Your beneficiaries get protection and income – all during their whole lives once you are no longer with them!
A SuperWill allows you to:
Appoint another Trustee to oversee the TT if you don’t think your family members will have the skill or financial wisdom to steer the ship.
Preserve assets for your bloodline only
Allow income to be shared amongst family members so as to minimise tax
Allow children under the age of 18 to receive $18,200 (current threshold) per year tax free
Provide for beneficiaries with support needs
build generational wealth for your family
Please refer to our two case studies below to explore what the benefits look like in a real life setting.
Cost?
A SuperWill is a great investment to insure your family, it contains a Trust Deed so it does come at a higher price point than a normal Will. For one person the cost of insuring over a million dollars in assets for three generations is about the same as insuring a $50,000 vehicle for one year. Consider the benefits and decide if it’s a good fit for your family.
So ….. what about Sam?
· We sent Sam my fixed fee quote and a link to start her Will Online
· Sam uploaded the required details
· By the Monday we had her instructions and a file set up
· Sam paid her deposit retainer via EFT into our trust account
· We commenced drafting within one business day
· We had a consult via Teams to confirm all the important details
· Sam’s drafts were emailed out to her
· Execution was completed with witnesses on site at her home office
· Sam returned the documents by Express post for safe custody with our office
· The turnaround was 8 days
Sam was one happy client ticking that off the To-Do List and knowing the inheritance she would leave her two young adult sons was secure.
How do I work with you to write a SuperWill
· We have five simple steps waiting for you…
· The time most clients need to work with us is about 1.5 – 2 hours in total including the gathering of materials we will need from you.
· We can deliver the service in about one week or we have an express service if you need it.
Your Will be done! (Our process, your client journey)
Step 1: Tell us more about your family circumstances via our Portal (20-30 minutes)
Step 2: Discovery Call (10 - 20 minutes) - we listen and make sure we understand exactly what you want
Step 3: Onboarding - what we need from you (10-15 minutes)
Step 4: Review of drafts with Caroline on a call (10-15 minutes)
Step 5: Execution of documents at your home or office (10 - 15 minutes)
We ask for your trust, we know the value and we Will deliver!
Want to read more about SuperWills? Visit our special report here.
We look forward to working with you!
Start your Will Online here.
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Case Study 1:
Rob has a life insurance policy of $ 1.5 Million. He writes a SuperWill providing a TT first for his wife Sue then his two children Kath, Kim and Kerry who are triplets in prep. Rob and Sue owe $500,000 on their mortgage when Rob sadly passes.
Sue receives into the TT $1,500,000. Sue is the Trustee of her TT and the beneficiaries are herself and the three chidlren. Sue withdraws out of the trust $500,000 and pays off the mortgage. The balance of $1M is invested in consultation with a good financial planner and is generating 8% per year or $80,000 per year after fees. Sue is also working part time earning $40,000.
Sue distributes from the TT $18,200 each to Kath, Kim and Kerry who pay no tax on this income of $54,600.
Sue distributes the balance to herself $25,400 so her taxable income is now $65,400.
Had the assets come to her through a standard Will her income would have been $120,000
At the current tax rates in Australia the TT will allow Sue to share income with the children and Sue will save in the first year alone:
$54,600
x
0.325
(current tax rate for Sue’s income bracket)
$17,745
These funds can then be used for private education or other family expenses. When the girls get older and have their own children, the grandies can also receive income from the TT.
Start your Will Online here.
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Case Study 2:
Jim and Bev are in their 70’s.
· They have a beautiful daughter Tess who is married to Mark.
· Tess and Mark have two daughters in their early twenties, Eve and Stacey.
· Jim and Bev already have Wills in place leaving everything to each other and then to Tess.
· They estimate their estate is worth about $ 800,000.
Jim and Bev find out about SuperWills and have free estate plan review.
They discover their current Will is a standard Will so they decided to write a new Will. The plan is the same but this time the inheritance for Tess is through a TT.
A year later Jim and Bev tragically pass away after a catastrophic motor vehicle accident.
Tess receives her inheritance into the TT which she controls $800,000. She is not familiar with investments so she consults a good financial planner who helps her get a portfolio in place. She begins to use the income to help her daughters with their student expenses, University fees and accommodation.
Three years later Tess and Mark end up separating. They have a net matrimonial asset pool of about $2 Million. They have both worked hard to build this up and thought a 50/50 share would be a fair outcome.
Both parties retain lawyers and the negotiations begin. During disclosure Tess must provide the particulars of her inheritance portfolio but it is considered a resource and does not form part of the asset pool available for division.
Thankfully her parents had good legal counsel and left her inheritance to her in a TT.
Had the assets come to her through a standard Will her $800,000 would be part of the matrimonial pool.
More cases are being litigated over this very point on inheritances which by and large come into matrimonial pools due to standard Wills in place.
These funds can then be used for private education or other family expenses. When the girls get older and have their own children, the grandies can also receive income from the TT.
Start your Will Online here.
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FAQ’s
My estate and assets are simple, I’m not super rich, is a SuperWill worth it?
· You may have more to pass on that you realise. Your net worth is growing and you may have a life insurance policy that will be payable upon your passing, all of this needs to be weighed and considered.
· The divorce rate is 40-50% and tax rates are not going down!
I don’t have time to find a lawyer and go to appointments
· We service our clients remotely from the comfort of your home or office
· Depending on the complexity of your affairs we can complete the work for you in one to two weeks.
Can my beneficiaries take funds from the trust to pay down a mortgage
· Yes this is possible, but the funds cannot be put back into the trust, a loan might be a better option.
I have no experience as an investor and I’m terrible with money!
· You can consult experts to help you with that side of things, the real question to ask is do you think the outcome is worthwhile.
Is a SuperWill worth the additional cost up front?
· That is a question only you can answer, but as a comparison, think of the $1,500 you might spend each and every year insuring a vehicle worth $50,000 for an accident that may never happen and in reality rarely does. A SuperWill is a one off fee that will insure your asset pool for three generations. We think there is some serious value here.
Are there any ongoing costs ?
· The Trustee must arrange for tax compliance each year and will need an accountant for this. The Trustee may also want to retain a financial planner for advice on investments to maximise the capital growth and income.
I’m still not sure if a SuperWill is right for me?
· Book a free discovery call, I will listen to your Q’s and do my best to answer them. If I don’t think a SuperWill is worth the investment I will tell you.
How much is a SuperWill?
· For most SuperWill’s we offer a fixed fee but please book a free discovery call with me, I will ask you some questions and then confirm a quote so there are no surprises and you can make a decision going forward.
· Single from $1,500 + gst
· Couple from $2,500 + gst
Start your Will Online here.
