Safeguarding Wealth and Family Harmony in the Estate Plan - 5 program recorded conference highlights series

Program 1:  Intergenerational Business Estate Planning

The image of the family scions battling each other for control of the family business is not purely the stuff of television fiction, but a real issue for many families as their parents age. This session will examine the importance of estate planning for family businesses, the major issues that need to be managed and dispute risk minimisation, including:

• Considering and meeting family expectations and concerns - the planning process and who should be involved
• Advice for helping the older generation “let go”
• Current structures, control mechanisms and processes and how to ensure validity and enforceability through to the next generation
• Using shareholder and family agreements to achieve desired outcomes
• Practical components of a staged succession process
• Managing equalisation and accounting issues
• Lessons from real life examples and cases

Program 2:  Factoring Parental Loans into the Estate Plan

Parents are increasingly putting their hand in their pocket to assist their children as the price of houses rises and the economy experiences a downturn. The formalisation of this arrangement is essential in the context of asset protection and estate planning. This session will examine what needs to be included in a parent/child loan agreement and how to factor in existing loans on the death of the lender, including:

• Gift or loan and legal presumptions
• Drafting a loan agreement - key clauses
• Repayments and other terms
• Should the lender take security?
• Taxation and other financial considerations
• Treatment of parent to child loan agreements by the family and civil courts
• Factoring loan agreements into estate planning
• The consequences of the death of the lender
• Record keeping and other tips

Program 3: Protecting Vulnerable Family Members in the Estate Plan

Particular types of inter-vivos and testamentary trusts provide a very important vehicle for the ongoing support and protection of vulnerable family members, and give comfort to the parents of children with special needs. This session will highlight key factors in advising on, establishing and managing these types of trusts, including:

• The suitability of trusts for vulnerable and special needs family members
• Considerations for establishing an inter-vivos or testamentary trust
• The difference between protective trusts and special disability trusts and the characteristics of each
• Statutory requirements for a Special Disability trust including purpose and eligibility
• Financial and taxation considerations, including pension impacts for both the donor and beneficiary
• Trust control issues and decision-making capabilities of the beneficiary
• Tips for guarding against undue influence and other vulnerabilities
• Trust assets including superannuation proceeds
• Accounting requirements, administration and ongoing management.

Program 4: Choosing the Right Executor to Implement the Estate Plan

Choosing the right executor can be difficult, and getting rid of the wrong executor can be even harder. This session will examine the key considerations in executor choice and provide a guide to manage executors when they fail to live up to obligations and expectations, including:

• What attributes should the ideal executor have?
• The risks of appointing family members and other interested persons
• A spotlight on executor compensation and calculation
• Unexpected taxation consequences of choosing a non-resident executor
• Does an executor need to get along with the beneficiaries?
• What constitutes unacceptable behaviour of an executor and what are the potential consequences?
• Challenging the actions of an executor
• Tips and traps in applications for executor removal
• Cases and examples including Prothonotary of the Supreme Court of NSW v Whit [2023] NSWSC 264; Jortikka v Haukka [2023] VSC 20; Re Boglis [2022] VSC 309

Program 5:  Protecting Family Trusts from the Ex-Laws

Relationship breakdowns are difficult enough, but the wider family members can also be impacted when a family trust and its assets become a target in proceedings in the Family Court. This session provides proactive advice and strategies for protecting family trusts from potential claims, including:

• Relevant provisions of the Family Law Act pertaining to property of the parties
• Jurisdiction of the Family Court when it comes to characterising and dealing with trusts
• Trusts - an asset or financial resource? Why it makes a difference and an analysis of relevant cases
• The ability of the Family Court to “bust the trust”
• What aspects of control and contribution does the court look at?
• Can a prior Binding Financial Agreement prevent consideration of a trust in divorce proceedings?
• Strategies for minimising the vulnerability of discretionary trusts including drafting tips
• Cases including Rigby & Kingston (No 4)[2021] FamCA 501; Woodcock & Woodcock (No 2)[2022] FedCFamC1F 173; Barrett & Winnie [2022] FedCFamC1A 99