Estate planning is more than just having a Will, it is about protecting your wealth and your family. A well thought out estate plan, transitions the right funds into the right hands, at the right time if you were to pass away.

Below is a case study which demonstrates the importance of having your Estate Planning structured appropriately. 

Case Study - Don and Helen

Don is married to Helen and they have 3 children – Joy, Jasmine and James. Don was previously married and has 1 child from that marriage - Chloe.

Chloe has suffered from years of drug addiction and has been in and out of recovery.

Joy is a self employed Neurosurgeon, Jasmine’s marriage is rocky and James has had ongoing financial issues.

Don and Helen want to ensure that they are each looked after first.

Don and Helen want to ensure that all 4 children participate equally in their Estate.

The Estate is worth around $4 million.

What happens after Don and Helen pass away?

Don and Helen pass away within a few months of each other. They have simple Wills. This is what happens with their Estate:

  • Chloe takes her $1M and within 12 months is doing the worst she ever has and has none of her inheritance left.

  • Joy takes her inheritance and uses it to reduce debt on the family home. 12 months later she is sued for a complex operation that went wrong and realises her inheritance will be lost in the lawsuit.

  • Jasmine’s husband takes the opportunity to leave and is asking for 50% of the inheritance in the property settlement.

  • The family discovers that James is actually an undischarged bankrupt and a majority of his inheritance is lost to creditors.

If Don and Helen had left the Estate via Testamentary Trusts this is what could have happened:

  • Chloe’s Trustees purchase a modest home for her and pay all utilities directly. They give her a very small living allowance. If Chloe needs rehab they will pay for this. 

  • Joy and her Trustees invest the funds and use it to pay her children’s private school fees. Joy distributes $18,000 per annum to each of her four young children, which they receive tax free and use to pay a bulk of their private school fees.

  • Jasmine’s Trustees invest the funds on her behalf. The Family Court Judge has not applied spouse maintenance to her ex husband, but also have been unable to take any of the Trust assets.

  • James’ Trustees invest the funds wisely on his behalf. While some of the income may be garnished, the capital remains intact until after he is discharged as bankrupt.

How Ulton Wealth Management can help

Our role in Estate Planning varies depending on your needs and the complexity of your personal and/or financial situation. We work hand in hand with you and your Solicitor to ensure the right outcomes are achieved.

If you would like further information about Estate Planning issues take a look at our video library or get in touch with one of our expert Wealth Advisors in our Ulton Wealth Management team today.

*not their real names, but case study is real.

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