Very often we speak to Australian and International Family Offices that are successful in building Family Wealth but may not of received the correct advice or current advice around areas which include:
Below is a typical case study that we see with Australian and International Family Offices with where they are currently exposed and how we provide a holistic solution.
The Stewart Family Office manages the wealth of the family, which includes an Australian-based agricultural business and a real estate development company, with total assets valued at AUD 40 million. The family consists of Robert (67 years old), Amelia (65 years old), and their three adult children: Emily (36 years old), Olivia (34 years old), and Liam (31 years old).
Family assets and businesses are held in outdated trusts, established over 20 years ago. Their SMSF has an old trust deed, and all family members have their superannuation in this fund. All family members have simple wills which leave assets directly to the surviving family members.
1. Current outdated trust structures and SMSF deed may not provide optimal asset protection and tax efficiency.
2. Inadequate control over the SMSF due to outdated trust deed.
3. Potential tax inefficiencies and risks due to outdated estate planning.
4. Lack of a formal and comprehensive succession plan for both the assets and the family businesses.
The first step involves reviewing and updating the trust deeds for the family trusts to Family Protection Trusts and the SMSF to a Leading Member Family SMSF to ensure they comply with current legislation and best serve the family's needs. This includes provisions for changing trustees, adding and removing beneficiaries, and distribution rules.
The businesses are restructured under the updated Family Protection Trusts, providing greater protection against personal creditors and potential legal disputes. A formal succession plan is put in place, mapping out the transition of the family businesses to Emily, Olivia, and Liam. A split-trust option is incorporated into each Family Protection trust so the when the trust assets pass down to the adult children, it splits into 3 sub-trusts, giving the children and their bloodline families the control to manage their own portions.
As Robert and Amelia now have perpetual Family Protection Trusts with a line of succession of Leading Member Appointors, the family wealth can seamlessly pass down to the next generation, without going to the estate and being challenged in family provision claims. The wills are also updated to include Testamentary Trusts for each of their children. Upon their passing, the trusts will provide a tax-efficient, protected inheritance for Emily, Olivia, and Liam along with that of their bloodline for generations to come.
By updating their outdated trusts and SMSF deed, the Stewart Family Office has created a comprehensive plan that provides comprehensive asset protection, tax efficiency, a detailed succession plan, and a robust estate plan.
Disclaimer: The information and any advice contained on this website is general in nature and does not take into account the objectives, financial situation or needs of any particular person. You need to consider whether the information is appropriate to your needs, and where appropriate, arrange an appointment to seek professional advice prior to acting on this information.
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