Very often we speak to Individuals and Families that have done well for themselves but may not of received the correct advice or current advice around areas which include
Below is a typical case study that we see with Families with where they are currently exposed and how we provide a holistic solution.
The Jones family resides in Melbourne, Australia. The family includes Michael (62 years old), Sarah (60 years old), and their two sons, Peter (34 years old) and David (32 years old). Michael and Sarah have accumulated significant wealth over the years, including a family home, an investment property, a share portfolio, and superannuation. Their combined net worth is around AUD 8 million.
Despite their substantial wealth, they have done little to secure it. Their assets are held personally, and they have traditional wills that leave their assets directly to their sons. They contribute to their retail superannuation funds but have limited control over these investments as do Peter and David.
1. Assets could be at risk from creditors or legal disputes.
2. Potential for their wealth to be diminished by taxes.
3. Inadequate provision for their wealth to be transferred efficiently and securely to their sons.
Michael and Sarah establish a Leading Member Family SMSF, allowing them to consolidate their superannuation and take control of their investment strategy. They maximise their contributions within the allowed limits, moving wealth into a more tax-efficient environment. Also, they plan with Peter and David to consolidate their retail superfunds into the Family SMSF to give them greater control over their investments but more importantly to facilitate a more protected and tax effective way of intergenerational wealth transfer.
They transfer their investment property and share portfolio into a Leading Member family protection trust. This provides protection against potential creditors and allows for tax-effective distribution of income from these assets among family members.
They implement a SMSF Will within their Family SMSF, ensuring their superannuation benefits will be distributed according to their wishes.
In their wills, Michael and Sarah include Testamentary Trusts for each of their sons. These trusts will provide a tax-efficient and protected inheritance for Peter and David. They also establish their Enduring Power of Attorneys and Advanced Health Directives to provide complete peace of mind if either of them become incapacitated
Michael and Sarah focus on growing their wealth through their Family SMSF along with their 2 sons, investing in a balanced portfolio of shares, property, and fixed interest. They utilise the flexibility of their Family SMSF to adjust their investment strategy as market conditions change.
They also use their Family SMSF to purchase a commercial property. Rent from this property flows directly into the Family SMSF, boosting their superannuation balance.
Upon retirement, Michael and Sarah start a pension from their Family SMSF using their portion of the fund. They plan to live off the income generated by the pension and continue to let the capital grow.
Upon their passing, the assets within the Family SMSF, family protection trusts, and testamentary trusts provide a robust, tax-efficient mechanism to pass wealth to Peter and David.
By using a strategic combination of a Leading Member Family SMSF, family protection trusts, and testamentary trusts in their wills, Michael and Sarah have significantly enhanced the protection, control, and growth potential of their wealth. They can look forward to a comfortable retirement, knowing their wealth will be efficiently and securely transferred to the next generation.
Financial services are provided by SMSF Wealth Pty Ltd ABN 57 663 011 309 which is a Corporate Authorised Representative 1304606 of SMSF Wealth Licensing Pty Ltd ABN 93 663 532 312 AFSL 547749
Disclaimer: The information and any advice contained on this website is general in nature and does not take into account the objectives, financial situation or needs of any particular person. You need to consider whether the information is appropriate to your needs, and where appropriate, arrange an appointment to seek professional financial advice from a financial adviser prior to acting on this information.
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