Peter and Maree came to see us seeking advice on how to manage their finances in the context of some complex family dynamics. The couple had married later in life and both had children from previous marriages. Until now they had kept their financials separate but Peter had been given a terminal diagnosis. He was very keen to ensure that any assets he had would go directly to his wife when he died. He was trying to find a solution to this but was unaware of what his options may be.
Whilst they both had Wills, the entirety of his significant share portfolio was in his name. The key issue here is that estates can be challenged. Anyone can appeal and the estate is required to pay the legal bills. This structure left his wife open to the risk that the lawyers could get more out of the estate than she would.
The solution we suggested was to not include the share portfolio in his Will and change the ownership of his share portfolio into joint names. In this ownership structure, the remaining assets are transferred directly to the surviving partner. By simplifying things for Peter and Maree we were able to provide them with peace of mind. Peter was now reassured that his wife’s future income needs were protected. As always, we also recommended Peter and Maree to seek expert advice from an accountant about the tax implications of making these changes.
The interesting thing here is that Peter and Maree weren’t even aware that estate planning was a thing. We all have different areas of expertise, and we don’t know what we don’t know! By taking the share portfolio out of the Will and having it in joint names it is also highly likely that the estate will not need to apply for probate. Probate is a mechanism in which estates with more than $50,000 in assets must have the Will certified by the Supreme Court. This process causes delays of three to six months and can cost up to $4,000.
Sometimes you don’t know what your problems are. It is hugely satisfying to be able to help our clients identify potential issues and to come up with solutions. Peter and Maree now have the correct ownership structure for their circumstances. We have been able to plan an investment portfolio that will provide for income needs, emergencies, and also some long-term wealth creation.
When it comes to financial planning it is important to know that the law has evolved to recognise all family dynamics. There can be complex considerations at play.
We can act as an advocate and central coordinator helping you to integrate the services of aligned professionals whose contributions may assist in the preservation of your wealth today, as you plan for the legacy you pass on to your family.
If you would like to review your circumstances, please get in touch.
General Advice Warning
The information provided in this article is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 and Dobbrick Financial Services (Ipswich) ABN 86 100 184 521 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
