Estate planning : a practical guide for estate and financial service professionals PDF
Preview Estate planning : a practical guide for estate and financial service professionals
ESTATE PLANNING A PRACTICAL GUIDE FOR ESTATE AND FINANCIAL SERVICE PROFESSIONALS FOURTH EDITION MICHAEL PERKINS DipLaw (SAB) Supreme Court of New South Wales TEP, Society Trust Estate Practitioners Partner, Perkins Fahey, Lawyers (Sydney) Lecturer, Faculty of Law, University of Technology Sydney Lecturer, School of Accounting and Finance, Charles Sturt University, Bathurst ROBERT MONAHAN LLB (Syd) Supreme Court of New South Wales TEP, Society Trust Estate Practitioners Accredited Specialist (Wills and Estates) Law Society of New South Wales Principal, Monahan Estate Planning, Sydney Lecturer, Faculty of Law, University of Technology Sydney LEXISNEXIS BUTTERWORTHS AUSTRALIA 2015 LexisNexis AUSTRALIA LexisNexis Butterworths 475–495 Victoria Avenue, Chatswood NSW 2067 On the internet at: www.lexisnexis.com.au ARGENTINA LexisNexis Argentina, BUENOS AIRES LexisNexis Verlag ARD Orac GmbH & Co AUSTRIA KG, VIENNA BRAZIL LexisNexis Latin America, SAO PAULO CANADA LexisNexis Canada, Markham, ONTARIO CHILE LexisNexis Chile, SANTIAGO CHINA LexisNexis China, BEIJING, SHANGHAI CZECH REPUBLIC Nakladatelství Orac sro, PRAGUE FRANCE LexisNexis SA, PARIS GERMANY LexisNexis Germany, FRANKFURT HONG KONG LexisNexis Hong Kong, HONG KONG HUNGARY HVG-Orac, BUDAPEST INDIA LexisNexis, NEW DELHI ITALY Dott A Giuffrè Editore SpA, MILAN JAPAN LexisNexis Japan KK, TOKYO KOREA LexisNexis, SEOUL LexisNexis Malaysia Sdn Bhd, PETALING JAYA, MALAYSIA SELANGOR NEW ZEALAND LexisNexis, WELLINGTON Wydawnictwo Prawnicze LexisNexis, POLAND WARSAW SINGAPORE LexisNexis, SINGAPORE SOUTH AFRICA LexisNexis Butterworths, DURBAN SWITZERLAND Staempfli Verlag AG, BERNE TAIWAN LexisNexis, TAIWAN UNITED KINGDOM LexisNexis UK, LONDON, EDINBURGH USA LexisNexis Group, New York, NEW YORK LexisNexis, Miamisburg, OHIO National Library of Australia Cataloguing-in-Publication entry Author: Perkins, Michael John. Estate planning: a practical guide for estate Title: and financial service professionals. Edition: 4th edition. ISBN: 9780409339482 (pbk). 9780409339499 (ebk). Notes: Includes index. Estate Planning – Australia. Subjects: Estates (Law) – Australia, Inheritance and succession - Australia. Other Monahan, Robert William. Creators/Contributors: Dewey Number: 346.94052 © 2015 Reed International Books Australia Pty Limited trading as LexisNexis. First edition 2005; second edition 2008; third edition 2011 This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Typeset in Electra LT and Gill Sans. Printed in China. Visit LexisNexis Butterworths at www.lexisnexis.com.au FOREWORD Professionals entering estates practice, whether on the first rungs of their career ladder or as experienced professionals transferring from another area of practice into the private wealth administration arena, could do no better than grab themselves a copy of this new, revised edition of Michael Perkins and Robert Monahan’s established textbook on estate planning. Targeted at the aspiring estate planner, the fourth edition of Michael Perkins and Robert Monahan’s textbook places the client and his or her needs at the very centre of the planning process. In our modern multicultural society, those needs are becoming increasingly diverse and complex; people are living much longer, and are often much wealthier than in the past. Estate planning must continue to evolve in line with these changing demographics in order to satisfy individual and family objectives. Tax mitigation on death has for many years been one of the main drivers for efficient and effective planning for clients. As an out and out practitioner, with over 30 years of experience in an offshore jurisdiction, I think I can safely say that the days of tax mitigation being the prime motivator in arranging a client’s affairs are giving way to a wider array of drivers as we enter this new age of global fiscal transparency. Nevertheless, the impact of inheritance taxes on a family’s wealth remains a key consideration in estate planning as the professional adviser continues to ensure that a person’s estate will pass in accordance with their wishes and that adequate provision is made for spouses, partners, children and grandchildren. The professional estate planner will also recognise the need to consider the extended lifetime needs of individuals and their families too, especially as we all live longer and the attendant expenses such as health care and other agerelated costs, and their drain on retirement income, become a reality. Each individual’s financial, personal and family circumstances will be different and in order to assist in meeting their objectives advisers and planners need to be appropriately qualified and skilled. For example, investments, insurance and non-financial assets may well feature in an estate plan which is likely to evolve as circumstances (family, financial etc) change. The diligent and client-focused estate planning professional will meet regularly with the client to ensure that the ‘plan’ remains up to date and in line with the individual’s current objectives. So the estate planner needs to be not only knowledgeable, experienced and skilled but must also be aware of the limits of their competence. As a result, the ability to develop and access a wide, multi-disciplinary network becomes all the more vital if the estate planner is to meet their client’s needs. In this multi-disciplinary environment it is vital that estate planners observe the highest level of professional standards — integrity, commitment and competence — in their dealings with clients. When I first entered the profession, many years ago, my old boss drummed home to me that the ‘client is king’, certainly as far as our organisation and his employees were concerned. This client-centric approach has always worked well for me and it is a practice which I have followed since those early days of my career. Putting the interests of the clients before our own, and observing the duty of care which we have to those clients, is an onerous responsibility. In order to fulfil our responsibilities we need to be, and to remain, technically competent. The fourth edition of Estate Planning offers a comprehensive and practical introduction to the technical world of the estate planner. Rosemary Marr TEP Vice President of STEP Chair of STEP WW’s Professional Development Committee FOREWORD TO THE THIRD EDITION Estate planning. The word conjures up an image of management of a wonderful old house and grounds, a timeless treasure that is a home for generation after generation. The estate is the platform for life, which is lived in different ways, with a different drama by each generation. By providing a solid, dependable and sustainable platform, life can be lived well and passed on to others. The estate planner is a solid, thoughtful designer who supports the foundation for the family to live and thrive across generations. This book by Monahan and Perkins fits nicely with this image of the estate planner as designer and sustainer for successive lives. The process of estate planning is a triumph of faith for a family. Knowing that creating family wealth is a sign of power and success, but is regarded by society (‘shirtsleeves to shirtsleeves’) as greatly ephemeral, the idea of safeguarding family wealth across generations is decidedly futile. But what would the world look like if a family could not pass on wealth to the next generation? Would parents work hard and take huge risks, dedicate their lives to something that they could not pass on to their children? Would children feel as tied and connected to their families if it was a short-term relationship where they could not expect to inherit something, even if just a share of a family vacation home? Let’s shift our attention a bit and think about the profession of estate planning. It is practised by legal and financial professionals, with the major aim to safeguard as much financial wealth for the family from taxation, and also to keep the family wealth from being quickly dissipated by the next generation. This is both a financial/legal and an interpersonal venture. Its success has to do with the structure that is set up, but also the behaviour of the next generation of family members. From a financial, legal and tax point of view, large assets must be placed into complex structures to deal with the regulations and needs of multiple constituencies. The family must be able to pass on governance and control, the assets must be managed to control substantial operating businesses and complex investments, and the people must feel that the choices that are made are fair and reasonable to all members of the family. This is a difficult and complex undertaking that must take into account all manner of legal, financial and interpersonal factors. Monahan and Perkins have designed a guide to these factors that is both clear and comprehensive. The family element comes first, as only the family can define clearly a set of goals and aspirations for the plan. Then come experts who take the ambiguous values and desires, and make them work technically. Monahan and Perkins have a clear sense that estate planning is not a transaction; one with a beginning, middle and end whose outcome is a clear, written plan. While there is a plan and it is clear and written and an outcome, it is a process which involves all sorts of engagement and input from different places. Their account never loses sight of that, and communicates nicely how it is done. They have a great ability to keep us in touch with the whole system of players and factors, and to look at parts without losing the larger picture. Their guide looks at each element, but in their introductory and concluding chapters they put things into context as a larger system. Every profession has one part of the whole to attend to, but they cannot operate without having an eye on the greater whole. This guide helps people from all the individual professions understand and envision the larger meaning of estate planning for the lives of a family. Finally, their view of the family is a human one, not a technical one. They understand that estate planning is a sign of trust from the older generation to the younger, where the younger generation must be stewards of the vision, values and mission of their elders, who gave them a gift, but also that the legacy must change and evolve over generations. They show faith and a focus on the people in the family who are the planners and beneficiaries, and how the technical plan is a design for the life and future of a living system. It is a wonderful achievement. Dennis T Jaffe, PhD Professor of Organizational Systems and Psychology Saybrook University
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