Pass your assets to your family with peace of mind

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People often want to pass assets to their kids, but who’s really sure that their children will receive them? It’s a conundrum, you cannot anticipate the circumstances at the time of your death. What happens if things change and your part of a blended family? And how do we ensure that  grandchildren are looked after?


A traditional Will has these vexing questions that complicate the passing of assets to named beneficiaries. Once assets pass to the person nominated, they can be exposed to liquidators and family law courts. In addition, the transfer might create a large tax liability on income or capital gains, where children are minors and did not earn the income.


There is no one easy way to handle these questions, but an alternative might be found with the use of a testamentary trust. A Will directing assets to a testamentary trust can have some huge benefits, depending on your circumstances.


Testamentary trusts benefit from no CGT or stamp duty liability on the transfer of assets after death. Your children will be free to keep, share or sell the assets within the family group. Traditional Wills restricts these options to the new owner.


Beneficiary children won’t own the assets directly. In the case of a family law court or liquidation proceeding, the assets held in a testamentary trust will not normally be at risk. Income or capital gains paid to a minor from a testamentary trust, is taxable at adult tax rates, and benefit from the tax free threshold. Without a testamentary trust, income paid directly to child beneficiaries is taxed at very high minor tax rates, mostly 47%.

Related:  Dealing with blended families in super


When a surviving spouse remarries, a testamentary trust can be used to protect assets for the children.  Should the surviving spouse die, assets can be retained for the original children and are protected from the new partner and new family.


Remember that a testamentary trust, where appropriate, should be part of your will. It comes into effect upon your death. Your will, with testamentary trust should list your assets, and name the people who are to control them.


What can you do?


If you would like to know more about finance, click here to know more about Chan & Naylor services. Leave your details here and we will schedule your free consultation. We’ll contact you to explain more.


Whether you are a beginner, seasoned investor or business owner, we give you guidance to maximise the financial areas of your life. We provide an integrated, tailored solution for your superannuation, taxation, property investment, asset protection, estate planning and more.

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Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.



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