Index ademption 59–60 age pension 253–262; see — avoiding 60 also aged care; Centrelink administration in intestacy 51 and estate planning; aged care 283–293; see also Centrelink and private residential aged care trusts and companies — accommodation payment — assets test 256–258, 289–291 261–262 — Aged Care Assessment — defi nition of assets 257 Team (ACAT) 285–286 — downsizing residence 258 — case studies 288, 289 — exclusions from assets — Commonwealth home 257 support 286 — exclusions from income — eligibility 284–286 test 255 — estate-planning — granny fl at interest implications 292–293 258–262 — fees and charges 288–291 — income and assets tests — fl exible care 287 255 — gifting assets ahead of — income, defi nition of 255 residential care 291–292 — marital status 254 — homeCOPYRIGHTED care packages — meansMATERIAL testing 253, 286–287 255–258 — residential 287, 288–292 — ordinary income test — transition to 283–284 255–256 — types of care 286–287 — qualifi cation for 254–262 Aged Care Assessment Team — residential care and (ACAT) 285–286 288, 289

305

bindex 305 21 June 2019 12:00 PM The Australian Guide to Wills and Estate Planning age pension (continued) business succession and estate — reverse mortgage and 278 planning 229–239 — transferring assets before — case studies 235–236 death 259–260 — children, equal treatment agreements, fi nancial, and of 234–236 cohabitation see — considerations, other cohabitation and fi nancial 232–236 agreements — importance of 229 appointor 98, 101, 111 — involuntary departure succession of 114–116 agreements 231 assets, estate see estate assets — life insurance 231, 244 — memorandum of wishes bankruptcy 7, 36, 110, 111, 237–238 124, 132, 137 — ownership and disposal benefi ciaries see also 236–238 families, blended; special — partners and needs, benefi ciaries shareholders, surviving with; superannuation 230–231 death benefi t; trust, — shareholder and superannuation death unitholder agreements 232 benefi t; trust, benefi ciary- — structures 229, 236–238 controlled testamentary; — succession agreements, testamentary trust forms of 231–232 — adjusting entitlements — taxation 238 68–69 — voluntary departure — case studies 70, 71 agreements 231–232 — disputes among 71 — refusal of gifts 67–68 capital gains tax see tax, — s pendthift, trust for capital gains 140–141 Centrelink see also age — timing of gifts 66–67 pension; disability blended families see families, support pension (DSP) blended — protective trusts 146, business succession 148–149 agreement and life — special disability trusts insurance 244 149, 150

306

bindex 306 14 June 2019 8:16 AM Index

Centrelink and estate — trust, designated private planning 253–262; see 264, 265, 266 also age pension — trust, testamentary, — age pension 253, application of provisions 254–258 to 272 — case studies 259–260 challenges to a will see — deprivation rules 258, also estate assets; will 260 contents; wills — gifting rules 258, — agreements not to 89 291–292 — case studies 87–88, 89 — granny fl at interest — defeating a claim, 258–262 strategies for 90 Centrelink and private trusts — disentitling conduct and companies 263–282 87–88 — asset for Centrelink — duress 92, 93 purposes 264–265 — estrangement, effect of — assets, determining value 92–93 of 270 — fraud 92, 93 — associates 269 — invalidity of will — attributable stakeholder 92–93, 94 268–270 — process of 83–84 — case studies 267, 268 — promises made 88–89 — company, designated — protecting from 81–94 private 264, 265, 266–267 — provision, lack of — control, surrender of 84–89 271–272 — provision, myths — control test 265, 266–267 regarding 91–92 — estate-planning — testamentary capacity 92 consequences 273 — time limits on 90–91 — liabilities, allowable — undue infl uence 92, 93 270–271 — validity 92–94 — relatives 269, 270 charities — share, pensioner’s 265 — tax deductible 73–74 — source test 265, 267–268 — tax exempt 72–73 — succession of trust 263 — in wills 72–74 — treatment of 264 — as trusts 101

307

bindex 307 14 June 2019 8:16 AM The Australian Guide to Wills and Estate Planning children see also families, disabilities, benefi ciaries blended; trust, child with see special needs, support; trust, estate benefi ciaries with proceeds; trust, disability support pension superannuation (DSP) 146, 148 death benefi ts; trust, divorce 7, 22, 226; see also testamentary families, blended — case study 159 — joint tenant property — taxation of 125, 135, — will revocation 79 157, 158–159, 160–163, downsizing 280 163–167 — Centrelink implications cohabitation and fi nancial of 280, 281 agreements 225–228 — binding 225–226 elder law — ending 226 — age pension 253–258 — estate-planning — aged care 283–293 consequences 227–228 — Centrelink and estate — invalidity 22–227 planning 253–262 — requirements for 226 — Centrelink and private — separation declaration trusts and companies 227–228 263–282 — timing of 225–226 — defi nition 253 — ultimate benefi ciaries 225 — estate planning 251–296 Commonwealth home — granny fl at interest support 286 258–262 Cultural Bequests Program 73 — mortgages, reverse 275–292 death, superannuation and estate assets 11–18 see superannuation and — blended families 23 death; taxation and — case studies 13–14, 23, debts and liabilities, payment 61–2 of 43–44 — CGT consequences of deeming rules, Centrelink’s gifts 61, 62 67–68 — CGT on disposal of deprivation rules 150, 258, 173–177 260 — components of 11–14

308

bindex 308 14 June 2019 8:16 AM Index

— distribution of 45, 59 executors 39–53; see also — distribution of, altered executors, professional; 59–60 funerals — documentation of 14 — appointment of 56–58 — encumbered 61 — assets, locating 41–42 — estate vs non-estate 12 — case studies 44–45, 49–50 — investment, gift of 59–62 — death of 51–52 — locating 41–42 — debts and liabilities, — non-estate assets 18, 68, payment of 43–44, 56–57 114 — defending will against — ownership 13–14, 31 challenges 44 — protecting 42 — disposal of body 58 — tenants in common vs — distributing estate 45 joint ownership 15–17 — distributing estate — testamentary trust, effect residue 57–58 of 16–17 — duties 40–47 estate planning 3–10; see also — funeral, arranging 41, 58 Centrelink and estate — more than one, planning; trusts; will appointing 47–48 contents; wills — notifi cation of authorities — advisers 8–9 45–47 — ambiguity, avoiding 7 — powers of 58 — case studies 6, 13–14 — probate, applying for — Centrelink and estate 42–43 planning 253–262 — professional, appointing — defi nition 3–4 48–51 — features of 5–10 — protecting assets 42 — fl exibility 6 — removing 52 — importance of 4–5 — role 39–40 — information needed for — powers 58 9–10 — special requests 58–59 — objectives 31 — taxation 44 — purpose of 253 — will, locating 40 — review, importance of executor, professional 48–51 7–8 — attributes of 50–51 — tailoring of 5–6 — cost 49–50

309

bindex 309 14 June 2019 8:16 AM The Australian Guide to Wills and Estate Planning executor (continued) — to charity 72–74 — case study 49–50 — deeming of 67–68 — reasons for appointing 48 — failure of 59–60 — investment 59–62 families, blended — refusal 67–68 — case study 143, 144 — timing 66–67 — estate assets 23 granny fl at interest 258–262 — mutual wills 143–144 guardians, appointment in — trusts and 140, 141–142, wills 64–66 225 family see also benefi ciaries; home care packages 286–287 families, blended blended families; trusts, income, splitting 135–136 family; trusts, insurance, income protection testamentary; will 245–246 contents; wills insurance, life — disputes see challenges to — as an asset 29 a will — case studies 22 — family structure 4–5 — intestacy and 22 — fi nancial agreements for insurance, life 241–246 225–228 — amount needed 245 fl exible care 287 — benefi ts of 241–242 funeral, arranging your 247–250 — business succession — executor’s role 41, 58–59 planning 231 — expenses 248–249 — case studies 242, 243, — personal details record 244 247–248 — importance of 241 — pre-arranging 250 — need for 243–244 — service contents 249 — partner, for life 242–243 — in superannuation gifting rules, Centrelink 258, 244–245 291–292 intestacy 19–25, 35; see also gifts in will see also estate wills assets; personal chattels; — administration 51 will contents — case studies 22, 23 — CGT consequences of — cause of 20 61, 62

310

bindex 310 14 June 2019 8:16 AM Index

— consequences of, marriage, effect on will of unwanted 21–24 78–79; see also families, — defi ned 19 blended — dependants with mortgages, reverse 275–282 disabilities 24 — advantages of 278–279 — executor, lack of 22 — alternatives 279–281 — infl exible rules 21 — amount owed 277–278 — insurance, effect on 22 — asset disposal 280–281 — non-estate assets 23 — borrowing from family — safeguards, lack of 280 24–5 — Centrelink entitlements — tax consequences 24 278, 280, 281 — unintended distribution — defi nition of 275–278 of property 21 — default 277, 279 — unintended recipients 22 — disadvantages 279 — downsizing 280 joint ownership 15, 16–17, — estate-planning 29 implications 281 — case study 17 — eviction 279 — separation, effect of 17 — negative equity guarantee 276 life insurance see insurance, life personal chattels, distribution life interest 6, 123, 142, 257, of 7, 12, 21, 47, 59, 258, 260 62–63, 292–293 lifetime planning 203–250 powers of attorney — business succession and 205–224 estate planning 229–239 — advance care planning — cohabitation and (ACT) 211–212 fi nancial agreements — advance care planning 225–228 (SA) 214–215 — funeral, arranging your — advance care planning 247–250 (VIC) 215–218 — insurance, life 241–246 — case studies 208, — powers of attorney 221–224 205–222 — defi nition 205–206

311

bindex 311 14 June 2019 8:16 AM The Australian Guide to Wills and Estate Planning powers of attorney (continued) — low vs high level 287 — enduring vs general — Refundable 207–208 Accommodation Deposit — joint or several authority (RAD) 289 208–210 — means-tested fee 289 — jurisdictional questions reverse mortgages see 220 mortgages, reverse — legal and fi nancial decisions 206–207 separation 7, 79, 87, 131, — m edical treatment 191, 227, 254; see also decisions, by state divorce; families, blended 210–218 — case studies 17, 22 — revocation 219–220 settlor in a trust 98, 99 — supervision 219 special needs, benefi ciaries — types of 206–210 with 48; see also trust, — use of 219 protective; trust, special — witness requirements 221 disability (SDT) probate, applying for 42–43 — case study 13 property settlement, — intestacy 23 family law, benefi ts of stakeholder in a trust, testamentary trust 134 attributable 268–270 — defi nitions 269–270 residential aged care 287 superannuation 4, 5; see — accommodation bonds 291 also superannuation — accommodation payment death benefi t; trust, 289–291 superannuation death — asset assessment, main benefi ts residence inclusion in — dependants 70 290–291 — fund trustee 70 — basic daily care fee 288 — in wills 70–71 — case studies 288, 289 — insurance cover in — Daily Accommodation 244–245 Payment (DAP) 289 — taxation 70 — fees 288–291 superannuation death benefi t — gifting assets ahead of 70, 190–201; see also 291–292 superannuation; trust,

312

bindex 312 14 June 2019 8:16 AM Index

superannuation death tax, capital gains (CGT) benefi ts — case studies 176–177 — asset, non-estate 190 — cost base, calculating — binding nomination 172–173 188–191, 200 — death and 171–177 — case studies 190, 196– — defi ned 172 197, 200 — estate assets, on disposal — challenges to decisions of 173–177, 280–281 184, 198–199 — residence disposed of two — considerations 183–184 years after death 177 — decisions made 183, — residence, exemption of 186–187 main 175–177 — dependants 184, 186 tax, income — documents 184 — on earnings from — fi nancial dependency 185 deceased estate in — interdependency 185 administration 178–181 — legal personal — on earnings from representative 185–186, deceased estate after 195–197 completion administration — nominations 187–191 179–181 — non-binding nomination — responsibility for 188 178–181 — payment of proceeds 167 — return 181 — recipients 183, 184–186 taxation and death 171–181; — self-managed funds, see also tax, capital gains future control of 199–200 — CGT, application of 171 — taxation 192–197 — income earned in — taxation of income administration 171 stream 194–195 tenants in common — taxation of lump sum ownership 15, 16 194 testamentary capacity 20, 24, — trust deed, fund 191–192 33–35, 60, 75, 78, 83–84, — trustee discretion 186– 92–93, 98 187, 197 — case studies 34–35 — will 184 — mental illness and survivorship, right of 15 34–35

313

bindex 313 14 June 2019 8:16 AM The Australian Guide to Wills and Estate Planning trust, benefi ciary-controlled — case study 159 testamentary 123, 125; see — features of 159–160 also trust, testamentary; — surplus income 160 trust deed; trustee; trusts — tax benefi t 158–15 — advantages 132 trust, discretionary 101, — allocations 135–136 109–117, 121–122 — asset protections 132 — advantages of 110–113 — benefi ciaries, defi nition — allocations, unpaid of 128–130 116–117 — blended families 140, — asset protection 110–111 141–144, 225 — case study 69 — case studies 133–134, — charitable giving 135–136, 143, 144 112–113 — considerations 142–143 — consent requirements — creditor protection 116 132–133 — defi ned 109 — disadvantages 137 — disadvantages 113 — lifespan of 130, 131 — estate-planning — mandatory or not 128 implications of 113–119 — minors 125, 135, 157 — fl exibility 112 — multiple 130–131 — income splitting 111–112 — mutual wills 143–144 — loans owed by 116–117 — structure of 141 — succession of controlling — spendthrift benefi ciary roles 114 140–141 — tax 111–112 — succession 131 — trustee 111 — taxation 135–137 — trustee deed review 114 — trust deed 127 trust, estate proceeds 157, — vs simple will trust vs 160–163 125–137 — capital requirement trust, capital-protected 139, 161–162 140–141 — case study 162–163 trust, child support 157, — features 161–163 158–160 — funding 162 — assets, transfer of 160 — tax benefi t 161 — capital requirements 160 trust, express 109–122

314

bindex 314 14 June 2019 8:16 AM Index trust, family 109–117; see also — case study 155 trusts, discretionary; trusts — Centrelink and 149 — assets 68–69 — disability criteria 151 — case studies 13–14, 69 — donor exemptions 149, 150 — loan accounts in 68–69 — estate-planning trust, fi xed see trust, unit implications 154–155 trust, hybrid 117, 119–120 — means test exemptions — estate planning 149–150 implications 121–122 — parameters 150–151 — loans and unpaid — principal benefi ciary entitlements 121–122 exemption 149–150 — structure 120 — reasonable care and — trustee 122 accommodation needs trust, investment 263 151–152 trust, proceeds 157–168 — regulatory requirements 153 — child support 157, — severe disability 150–151 158–160 — surplus income 153 — estate proceeds 157, trust, superannuation death 160–163 benefi ts 157, 163–167 — superannuation death — benefi ciaries defi ned 165 benefi ts 157, 163–167 — case study 166–167 trust, protective 139, 144–149 — capital requirement — Centrelink treatment 165–166 146, 148–149 — creating 167 — control of 147–149 — determination of fund — disability and trustee 164 vulnerability 145 — income distribution 165 — fi nancial needs and — taxation of children funding 145–146 163–164 — purpose of 144–145 trust, testamentary 17, — terms of 146–147 123–138; see also trust, — trustee 147 benefi ciary-controlled trust, special disability (SDT) testamentary trust; trust 139, 149–155 deed; trustee; trusts; — arm’s-length requirements — application of provisions 153 to, Centrelink’s 272

315

bindex 315 14 June 2019 8:16 AM The Australian Guide to Wills and Estate Planning trust, testamentary (continued) — appointment of new 121 — capital-protected trusts — discretionary trusts 109 124 — professional 48–51 — defi ned 123–124 — powers of 58 — difference from — powers, source of 103 discretionary trust 125 — removal 101, 121 — discretionary life interest — roles 99–100 124 — special requests 58–59 — family law, in 134 trustee, superannuation fund — protective trust 124 see superannuation — simple vs benefi ciary- trust deed 102–103; see also controlled 125–137 trusts; trustee — superannuation proceeds — amending 105–106 trust 123 — contents 103 — use of 124–125 — review 114 — trust deed 125 — unit trust 117–118 trust, unit 101, 109, 117–119 — varying the terms of 106 — a dvantages 119 trustee in bankruptcy 111 — disadvantages 119 trusts 97–168; see also trust, — estate planning benefi ciary-controlled implications 121–122 testamentary; trust, — loans and unpaid capital-protected; entitlements 121–122 trust, child support; — ownership 118 trust, discretionary; — structure 118 trust, family; trust, — succession 121 hybrid; trust, proceeds; — transfer of units 119 trust, protective; trust, — trust deed 117–118 special disability; — trustee 122 trust, superannuation — unitholders 99, 102, death benefi ts; trust, 103, 109 testamentary; trust deed; — vs discretionary trust trustee; trust, unit 117–118 — appointor 98, 101, trustee 98, 99–100; see also 111, 115 trust deed — assets 29, 104 — a ppointment in will 56–58 — bank account

316

bindex 316 14 June 2019 8:16 AM Index

— benefi ciaries 98, — case studies 61–62, 69, 100–101, 102 70, 71 — Centrelink treatment of — equalisation clause 235 263–272 — executors and trustees, — deed 102–103, 105–106 appointment of 56–58 — elements of 104–105 — family trust assets 68–69 — express 102, 104–105, — gifts, failure of 59–60 109–122 — gifts, refusal of 67–68 — fi xed see unit trust — gifts, timing of 66–67 — fl exible 123–138 — gifts and loans 71 — guardian 99, 101–102 — guardians, appointment — infl uences on 103 of 64–66 — intention 104 — personal chattels 62–63 — inter-vivos (created by — personal details 55 deed) 98, 99, 157 — revocation of previous — lifetime of 105 will 55–56 — nature of 97 — superannuation 70–71 — objects of 104–105 will kits see wills: homemade — ownership 97, 99 wills 27–94; see also intestacy; — parties to 98–102 will contents; challenges — reasons for 98 to a will — resettlement 106, 115 — altering 75–81 — settlor 98, 99 — advisers, disclosure to — subject matter 104 88–89 — taxation 106–107 — assets, ownership of 31 — trustee 98, 99–100 — benefi ciaries, — types of 97–98, 109–122 circumstances of 30 — vesting date 105 — case studies 34–35, — will see testamentary 61–62, 69, 70, 71, 76, 144 trusts — challenges to 44, 81–94 — codicils 75, 76, 77 will contents 55–74; see also — contents 55–74 estate assets — divorce, effect of 79 — adjustment clause 69, — destruction of 78, 80 70–71, 200, 234 — estate-planning — asset distribution 59–62 objectives 31

317

bindex 317 14 June 2019 8:16 AM The Australian Guide to Wills and Estate Planning wills (continued) — planning 29–37 — executors 39–53 — purpose of 29, 205 — fl exibility, need for 30–31 — reasons for not preparing — homemade 35–36 19–20 — information needed for — reviewing 281 30–31 — revocation 55–56, 77–79, — invalidity of 92–93 80 — legal requirements — special disability trusts 32–35, 92–93 154–155 — limitations 29 — storage 76, 80–81 — locating 41 — testamentary capacity — marriage, effect of 78–79 20, 24, 33–35, 60, 75, 78, — missing 78 83–84, 92–93, 98 — mutual 143–144 — trust loan and allocations — new 75–76 116–117 — non-estate assets 18 — updating 59–60

318

bindex 318 14 June 2019 8:16 AM bindex 319 14 June 2019 8:16 AM bindex 320 14 June 2019 8:16 AM bindex 321 14 June 2019 8:16 AM bindex 322 14 June 2019 8:16 AM