Question
Shaun and Dimity are in their mid-fifties and have three children from their marriage: Matthew, aged 23; David, aged 17; and Isobel, aged 15. Shaun
Shaun and Dimity are in their mid-fifties and have three children from their marriage: Matthew, aged 23; David, aged 17; and Isobel, aged 15. Shaun has been married before and has one child from that marriage Annabel, aged 26. Annabel has no contact with her father and blames him for the financial hardships that her mother has experienced since their divorce.
Shaun is employed as an architect while Dimity is a fashion consultant. The couples assets, at current market value, consist of the following:
Asset | $ |
Home and contents | 1050000 |
Bank account | 30000 |
Shares | 130000 |
Holiday home | 680000 |
Managed funds | 40000 |
Life insurance policy | 800000 |
Self-managed superannuation fund total (Shaun and Dimity 50/50) | 550000 |
Superannuation account Dimity | 60000 |
The couple raises the following issues.
- All of the couples assets are jointly owned between Shaun and Dimity.
- The couple gave Annabel$180000to establish a business 3 years ago on the basis that she has no further claim on Shauns estate. However, the couple is convinced that Annabel will nevertheless contest Shauns will upon his death.
- Shaun's life insurance policy is owned by Dimity.
- Dimitys individual superannuation fund contains a$150000life and TPD policy and Dimity has decided to retain this account in order to preserve the insurance policy. Dimity completed a binding death benefit nomination 4 years ago nominating 100% to be paid to Shaun in the event of her death. Both Shaun and Dimity have completed binding death benefit nominations within their SMSF.
- The couple each has a will in place leaving everything to each other. They have each nominated their son David as executor of their respective estates. Shaun and Dimity have appointed each other as their respective general power of attorney.
- Dimity's mother, aged 90, owns an apartment in Queensland. However, the mother is in an aged care facility and in bad health and is no longer living in the apartment. The mother is looking to leave the property to Dimity. The property cost$130000in 1989 and has a current market value of$510,000.
- The couples son, David, has been married for the past 3 years but he and his spouse have experienced marriage problems for some time. Shaun and Dimity would like to gift David$80000to use as a deposit on a house but, given the marriage problems, do not want the money to be lost in a divorce.
- The couple would like the family assets distributed in a tax-effective manner upon their death.
Shaun and Dimity are looking to review their wills and seek some advice from you on how best to structure their estate-planning needs. You are required to analyse the couples situation and detail relevant issues and recommend advice that the couple should consider. (15 marks)
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