Nick is an accountant and has a $1m life insurance policy in place owned by his wife Michelle. Nick also has $800 000 held in his superannuation account with a non-binding death benefit nomination in place leaving 50% of the funds to his two adult children and 50% to his brother Scott who has a gambling issue. The couple’s home is jointly owned by Nick and Michelle, as is the couple’s share portfolio. Nick also owns a holiday home owned as tenants in common with Scott. They inherited the holiday home from their parents. Nick has a will in place that provides for the establishment of a testamentary trust upon his death and Nick is seeking to maximize the amount of his estate that is able to be held in the testamentary trust. Discuss the following issues:
(a) How is each of Nick’s assets likely to be distributed upon his death?
(b) What modifications would be required to help Nick achieve his objective of maximizing the amount of his estate held in the testamentary trust?
(c) What potential problems could be faced by the brother upon the distribution from Nick’s superannuation fund and can you suggest any solution? 

(d) Michelle is an only child and is worried about the state of her elderly parents’ health. She is particularly worried that her dad might be in the early stages of dementia, although no formal diagnosis of this has been made. What estate planning strategies would be appropriate for Michelle’s parents?

Answer rating: 100% (QA)

PART A Superannuation Funds 800000 Share of Nicks children 50 400000 Share of Scott 400000 After Nic... View the full answer