Estate Planning Services

A considered and appropriate estate plan provides vital peace of mind to most people. A wide variety of issues can arise in preparing an estate plan and an ever increasing range of skills and experience is necessary to achieve the right outcome. Aitken Lawyers has helped many generations of clients to achieve just that.

Aitken Lawyers has extensive experience in these areas from basic estate planning to the requirements of complex high net worth individuals with complicated business structuring, trusts and rural interests. Andrew Aitken is an expert in this field with over 25 years experience and he is assisted by Claire Owen who also has specialist experience in expat matters, foreign assets and overseas estate planning requirements.

As the world becomes a more complex place, clients’ affairs have followed suit so there is no substitute for experience and expertise which, even extending to estate disputes, business succession and appropriate use of Memorandum of Wishes, Aitken Lawyers can provide.

When reviewing a client’s estate planning needs, there are a number of matters that require consideration including:

• Wills (including use of Testamentary Trusts)
• Powers of Attorney
• Forms of Enduring Guardianship
• Superannuation (and Binding Death Nominations)
• Advance Directives (Living Wills)
• Trusts
• Tax Efficiency
• Potential Estate Disputes
• Probate

Wills (and testamentary trusts)

A Will, whether simple or complex, is a most important personal document the importance of which should not be underestimated. Significant issues for discussion with clients inevitably will involve appointment of executors, beneficiaries, gifts and life estates.

A testamentary trust is a type of discretionary trust set up in a Will. Its key benefits are tax efficiency, asset protection and flexibility. Its commencement is triggered by the testator's death. Testamentary trusts are a tax effective way for parents or grandparents to fund children's or grandchildren's education, food, clothing and other expenses after their deaths.

Testamentary trusts are very flexible in their uses and applications.

The income is usually distributed on a purely discretionary basis by the trustee each year, in whatever shares the trustee desires among a pool of beneficiaries. Minors can receive income as beneficiaries of a testamentary trust taxed at the usual adult marginal rate after the tax free threshold of $6000.00 is exceeded. Thus a tax free income from the trust of $6000.000 each year can be directed to each minor's education or any other worthwhile purpose. By comparison, the usual unearned income of a minor is limited to a $416.00 tax free threshold and after that, the tax rate starts at 66%.

As testamentary trusts can run for up to 80 years in New South Wales, their benefit can last many generations. When wound up, the trust may be drafted to allow the trustee a discretion to nominate who among a pool of named beneficiaries will receive the capital or alternatively, it can be drafted so these entitlements are fixed from the beginning.

Another significant advantage of a testamentary trust is that it can serve to protect the assets of an estate where the beneficiary/s are pursued by creditors in bankruptcy proceedings as the assets are not owned by the beneficiary/s but by the trust instead.

In circumstances of divorce, the level of protection offered by testamentary trusts may be less. The Court has shown a willingness to include assets of a testamentary trust as those of the party to the Family Law proceedings (particularly where the party is also a trustee of the testamentary trust) and deal with the property of the testamentary trust in the same way as property of the marriage. However, appointing different or multiple trustees and fixing entitlements in respect of other beneficiaries can offer additional protection.

Powers of Attorney

Essentially this document deals with financial and property matters to authorise another person or persons to make decisions and execute documentation in this regard, on the client’s behalf. This document can apply now (for example, if the client is overseas or unwell) and can be drafted as an Enduring Power of Attorney so that it would apply in the event that the client loses capacity through unsoundness of mind. One or more persons can be appointed to either act jointly or severally and it can also specify alternate appointments.

Forms of Enduring Guardianship

This document allows a person to appoint one or more person(s) and also alternate appointees to make personal and lifestyle decisions on behalf of another person in the event that that person loses capacity. Decisions can be made in respect of:

• Deciding where a person might live.
• Consenting to medical and dental treatment.
• Engaging personal services for a person.
• To decide what healthcare a person will receive.

It can also include specific directions and authorisation to the appointee(s) in respect of a person’s wishes in certain circumstances, such as when a person would wish to receive palliative care only and not life sustaining treatment, for example, in the event that a person is in a persistent vegetative state.

Advance Directive

An Advance Directive is more commonly referred to as a Living Will. This document works together with a Form of Enduring Guardianship and sets out a person’s express wishes and directions to medical practitioners in respect of circumstances where a person does and does not wish to receive certain medical treatment.

Trusts

When considering a client’s estate planning requirements, it is important to review trusts under which the client is a beneficiary and/or has control through appointment as a trustee (or director of a corporate trustee) and/or as an appointor. The future control of a trust is often dealt with in a Will or otherwise, as part of an overall estate plan. As trusts in New South Wales can run for up to 80 years, those Trust Deeds that were drafted some time ago are often no longer up to date with the current legislation and require amendment to deal with the same and also to bring them in line with the client’s current and future needs.

Tax Efficiency

Tax efficiency is always a consideration when reviewing estate planning. In particular, consideration needs to be given to Income Tax, Land Tax, Stamp Duty and Capital Gains Tax which can arise in all areas of estate planning and trusts.