Wealth planning across the ages

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May 31, 2022
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Article published by RJS Wealth Management Pty LtdPrevious Australian generations have grown to expect that retirement meant ceasing work and living comfortably on the age pension. Apart from the family home and personal belongings there were usually no substantial assets to leave behind for children or other family members. But superannuation has changed all of that.The Super impactBecoming compulsory more than 20 years ago, superannuation guarantee payments have exponentially grown retirement funds. Leaving many to believe that a combination of superannuation and pension payments will support their lifestyle. The increase in retirement funds and the squeeze on Government funding and caused the accessibility of the age pension to be more difficult. And this is expected to continue as the Baby Boomer generation retires, applying more pressure to the Governments purse. This leaves clear responsibility on the newest generationof retirees to be at least partially self-funded. But the good news is, with an abundance of retirement income products available, individuals now have more choice in how their retirement nest egg is tax effectively managed. In many instances, this increase in wealth has amplified the number and value of assets and personal belongings. Resulting in older generations leaving quite an estate to distribute when they pass.A WillIt can be confronting to think about who gets what when you’re no longer here, so it’s easy to ignore this vital piece of the estate planning puzzle. However, the upside of being properly organised now is that your loved ones will have certainty and clarity about your wishes after you have gone. And in many instances, some of the arrangements can be pre-prepared to protect assets (ie. Testamentary trusts).Inexpensive will kits are available, but without the guidance of an estate planning professional, you run the risk of leaving gaps in the strategy. It’s not too costly to have these important documents properly drafted, executed and stored by a solicitor. It is best to be safe than sorry.Put your trust in a TrustYou can use your Will to establish a testamentary trust. This is a type of legal arrangement which becomes operational upon death. These trusts offer flexibility regarding the distribution of income and assets, and the structure can provide tax advantages too.Testamentary trust structures are most commonly used to protect the interests of beneficiaries with special needs, such as being a legal minor or in poor health. They can also be used by will-makers who have complex family, financial or business arrangements.Dependent child pensionsThese can be quite a tax-effective way for a dependent child to inherit a parent’s superannuation and any linked life insurance. To make sure that a child pension can be activated when it’s needed, the superannuation fund needs to have already noted the child as a beneficiary to their parent’s account. As not all superannuation funds provide this option, it pays to seek advice in this area.These are just a few of the things that need to be consider when transferring wealth between generations. We know it can be an unpopular topic but it’s crucial to protect your assets. So talk to an RJS Wealth Management Professional about a tailored protection plan for you. This article is published by RJS Wealth Management Pty. Ltd. ABN 24 156 207 126. RJS Wealth Management Pty Ltd is a corporate authorised representative (No. 438158) of Actocue Pty Ltd ABN 32 128 604 419 ASF and Credit Licence No. 323729. Registered tax advice is offered through RJ Sanderson & Associates Pty Ltd ABN 71 060 299 783. This article contains general information only. In preparing this information, RJS Wealth Management did not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, a person needs to consider (with or without the advice or assistance of an adviser) whether this information is appropriate to their needs, objectives and circumstances. RJS Wealth Management Pty Ltd does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, RJS Wealth Management Pty Ltd does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither RJS Wealth Management Pty Ltd nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.

June 1, 2022

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