Your clients Betty (62) and Ian (64) Shannon have asked for your advice concerning estate planning. Unfortunately,
Question:
Your clients Betty (62) and Ian (64) Shannon have asked for your advice concerning estate planning. Unfortunately, Ian has liver cancer and only has six to nine months to live.
Betty and Ian have two children, Louise (38) and Nigel (34).
Louise is married to James (42), and they have two children: Tim (11) and Jack (9).
Nigel has just separated from Sarah, to whom he was married for eight years. Sarah and Nigel's divorce has been bitter, and they are fighting over the custody arrangements for their children, Andrew (7) and Gina (3).
Betty and Ian's assets are:
Detail | Owner | Value ($) |
Home | Joint | 1,300,000 |
Share Portfolio (bought in 1981 for ($63,000) | Ian | 800,000 |
Superannuation - Tax Free Component $200,000 - Taxable Component $600,000 - Untaxed Component $200,000 | Ian | 1,000,000 |
Superannuation | Betty | 1,100,000 |
Ian wants to leave his share portfolio to Betty and gift the children $500,000 each from his superannuation fund. However, Ian is conscious that Sarah and Nigel haven't reached a financial settlement and is keen to keep the family assets within the family.
REQUIRED:
- Advise Ian on whether it is appropriate to document his wishes in his will. Analyze and suggest strategies that can provide asset protection for the family.
Assume that Ian dies with appropriate and proper arrangements to distribute his assets according to his wishes. Consequently, Ian's superannuation is paid in full, equally to his two children. Furthermore, the executor of his estate sells his short portfolio and distributes the proceeds to Betty.
Based on the market values as shown in the question, calculate the after-tax cash benefit available to Betty, Louise, and Nigel. Ignore the effects of the Medicare levy in your calculations.
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts