Estate Planning
Other than the family home, superannuation is likely to be one of your largest
assets in the lead up to retirement.
Estate planning is a cornerstone of comprehensive financial planning. Ensuring that your assets are managed and distributed according to your wishes, providing for your loved ones, and protecting your hard-earned wealth for generations to come. Although we are not lawyers, at Donmont Capital we facilitate your estate planning needs as we understand the pains of not having an appropriate setup.
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How Are Your Super Beneficiaries Set Up?
Within Super there are two ways a beneficiary can be set up: Binding Nominations and Non-Binding Nominations. A Binding Nomination is a legal instruction that directs the trustee of your superannuation fund on how to distribute your superannuation benefits in the event of your death without any discretion. Similar to a Binding Nomination, a Non-Binding Nomination also provides direction on how to distribute your superannuation benefits, however it serves as a guidance to the trustee, rather than a legally binding instruction. Due to this type of nomination involving trustee discretion, the superannuation fund has the discretion to determine how to distribute the member’s superannuation benefits in accordance with the fund’s governing rules, relevant legislation and other considerations.
Most funds will default to Non-Binding Nominations due to their flexibility and simplicity, so it is essential to ensure that your current structure is appropriate for what you need. Get in touch with us today to find out more about your current setup.
Discretionary Trusts
Discretionary trusts are a powerful tool in the realm of financial planning, offering individuals and families a flexible and tax-efficient way to manage their assets and wealth.
A discretionary trust, also known as a family trust, is a legal arrangement where a trustee holds assets on behalf of a group of beneficiaries and has discretion over how income and capital are distributed among beneficiaries.
These trusts can be beneficial from an asset protection standpoint by separating trust assets from the personal assets of beneficiaries and can also provide tax planning opportunities by allowing trustees to distribute income and capital gains among beneficiaries in a tax-effective manner. In addition, discretionary trusts are valuable estate planning tools as their flexibility allows individuals to preserve and transfer wealth to future generations as they can adapt distribution strategies to changing family circumstances over time.
Please keep in mind that there are many considerations to take into account when considering a discretionary trust and you should seek advice from a legal professional to ensure that the trust structure aligns with your goals, objectives and legal requirements.
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Simple Will
A simple will is a basic legal document that outlines how you want your assets to be distributed after your death.
It typically includes instructions for naming an executor, designating beneficiaries, and appointing guardians for minor children if necessary. This is typically suitable for straightforward estates and uncomplicated family situations.
Mutual Will
Mutual wills are two separate wills made by two people, often spouses or partners, with nearly identical provisions, often to protect the interests of children from previous relationships.
The key feature of mutual wills is that they contain an agreement between the parties not to change the terms of the will without the other’s consent. This means that after one party dies, the surviving party is bound by the terms of the mutual will and cannot change them unilaterally.
Testamentary Discretionary
This can be derived from and Account-Based Pensions or, less commonly, Annuities.
Investment Income
Trust Will A testamentary discretionary trust will is a more complex type of will that includes provisions for setting up one or more discretionary trusts upon the testator’s death.
These trusts give the trustee discretion over how and when to distribute assets to the beneficiaries, providing flexibility and asset protection.
The testator typically appoints a trustee to manage the trust and may specify criteria for distributions, such as age or need and can be useful to distribute income t beneficiaries who may not be capable of managing inheritances on their own.
