Just because there's knocking** for a testamentary trust statutory will doesn't mean the court will answer

Last week’s post considered a leading statutory (or court ordered) will case that approved a will incorporating testamentary trusts.

The decision in a further case in this area, namely Re RD [2021] QSC 65, highlights however that much will turn on the exact factual matrix as to whether a proposed testamentary trust will is approved by a court.

Relevantly in this case the court had to decide between 2 radically different draft wills submitted, one with 5 testamentary trusts, and the other with none (and all gifts passing directly into the names of the intended beneficiaries). Relevantly, the percentage allocations between each main beneficiary were identical under both 2 wills.

The lawyer proposing the testamentary trust will argued that “a properly advised person in possession of a substantial trust fund, would be concerned to ensure that the substantial inheritance they leave be held in a protected testamentary trust structure for the protection of their chosen beneficiaries”, which would include “asset protection from third parties such as other spouses, or from other sources, whether during the beneficiary’s lifetime, or after their death, if they have already inherited”.

In contrast the lawyer proposing the simple will provided the following context which the court accepted:

1. The main beneficiaries under the wills all argued that they did not believe the incapacitated person would want to have 'tied up' the wealth in a testamentary trust with no fixed entitlement.
2. As the proposed testamentary trusts were wholly discretionary, any benefit that would flow to the intended beneficiaries would be “merely an expectation or hope” (see Bowers v Bowers [2020] NSWSC 109).
3. The potential beneficiaries of the testamentary trusts were much broader than the immediate family – which was contrary to the comments of the lawyer proposing the testamentary trust will that there was a need to ensure that people who were effectively strangers to the incapacitated person, and who had not contributed in any way to his well-being, should not benefit.
4. Although there may have been some asset protection benefits, the testamentary trust will involved:
1. unnecessary complexity in its administration over the lifetime of the beneficiaries;
2. significant costs being incurred by the estate over the lifetime of the trusts, by reason of the fees incurred by the executor and trustee (Perpetual Trustees), in its management of the trusts over a prolonged period of time;
3. uncertainty as to what the beneficiaries might receive from the estate, given the discretionary nature of the trusts, such that they might not receive any more than some proposed specific pecuniary gifts; and
4. uncertainty as to whether there would be sufficient funds in the estate on death to give effect to the proposed specific pecuniary gifts.
5. Therefore, the complexity, additional cost and uncertainty as to what the beneficiaries might receive under the testamentary trust will proposed outweighed any potential asset protection benefits.
6. The draft testamentary trust will also contained a number of anomalies which would have required amendments by the court.

The court ultimately confirmed:

1. The central issue for the court’s determination in statutory will cases is what will would the incapacitated person probably have made, if they had capacity.
2. The cases where testamentary trust wills have been approved, such as the one mentioned in last week's post (Doughan v Straguszi [2013] QSC 295) were distinguishable both because of the facts involved, and because in each case the approval of a will incorporating testamentary trusts was supported by the likely beneficiaries.
3. It was likely that the incapacitated person here would have (if they had capacity) taken into account and given considerable weight to the views expressed by his mother and his father (who both opposed a testamentary trust will).
4. It was therefore unlikely that a reasonable person with capacity, would favour a convoluted will under which five testamentary trusts are imposed on his favoured beneficiaries, as opposed to a straightforward, simple will, benefiting those family members directly.

Separately, the court also confirmed that the execution of a non-lapsing binding death benefit nomination (BDBN) was an act in relation to a financial matter within the meaning of section 33(2) of the Guardianship and Administration Act 2000 (Qld) (see another case explored in previous posts, namely Re SB; Ex parte AC [2020] QSC 139). The incapacitated person's administrator (effectively his enduring attorney) was therefore able to sign the BDBN on his behalf.

The signing of such a BDBN was critical because the bulk of the incapacitated person's assets were held via superannuation and therefore to achieve the estate planning objectives 100% of his superannuation death benefits needed to be paid to his legal personal representative (to then be dealt with in accordance with the statutory will).

As usual, please contact me if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the Rolling Stones song ‘Can't you hear me knocking?'.

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Amending testamentary trusts: a non-zero possibility**?

The ability to amend a testamentary trust after its establishment (and in particular following the death of the will maker) is an area of some contention. Often specialist advisers argue that changing any terms of a will after death is a breach of the rule against delegation of will making powers.

One aspect of the issue that is however very clear is that unless there is a power to vary included in the terms of a testamentary trust, the only way in which to change its terms is by way of a court application.

In all Australian states, there is legislation that empowers the court to vary the terms of a trust. One example of a case in this regard is Robert Thomas Grant as trustee of the Grant Family Testamentary Trust [2013] NSWSC 1603

In this case, a testamentary trust had been setup by the trustee’s late father.

Some years after its establishment, the trustee wanted to obtain finance to make improvements to one of the real properties owned via the trust.

Financiers refused to lend any funds on the basis that the powers of the trustee set out under the testamentary trust did not include a raft of provisions normally expected to be seen in a trust instrument, including the power to lend, the power to open and operate accounts with financial institutions, the power to delegate, the power to borrow and a right of indemnity.

Using a discretion granted to the court in New South Wales to vary a trust instrument where it deems it ‘expedient for the management of the trust’, all the deficiencies identified by financiers were remedied by the court approved variation.

Interestingly, part of the application included a specific power to allow the trustee to unilaterally make future amendments to the terms of the trust. While other cases have refused to include such a power, here the court was comfortable to allow it, on the basis that any amendment would require the consent of all potential beneficiaries. This prohibition was seen as ensuring that the trustee could not do anything to alter the ‘substratum’ of the trust.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the At the drive in song 'Non-zero possibility’.

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A final destination** on 2 trusts becoming 1

Last week’s post considered the amalgamation of 2 testamentary trusts ‘post death’.

A further related issue is where a sole individual beneficiary also becomes the sole individual trustee.

Previous posts have explained how section 104-10 of the Tax Act provides that the change of a trustee is not a CGT event of itself.

There is however in these circumstances effectively a merger of the legal and beneficial interest.

Ford and Lee on Trusts confirms this outcome as follows:

‘’Where legal ownership of trust property passes to a person who is absolutely entitled as beneficiary to the beneficial ownership, the beneficial ownership is extinguished in the legal ownership: Selby v Alston 30 ER 1042; (1797) 3 Ves Jun 339; 341; Re Douglas; Wood v Douglas (1884) 28 Ch D 327; Fung Ping Shan v Tong Shun [1918] AC 403 at 411….

The true reason for extinguishment of the beneficiary’s equitable interest is not merger but the impossibility of a supposed sole trustee being subject to any obligation to himself or herself as a sole beneficiary. This is recognised in judicial dicta which treat merger as a consequence of the absence of an obligation. See, for example, Re Turkington [1937] 4 All ER 501 at 504 where Luxmoore J said:

“…where one finds the legal and equitable estate equally and co-extensively united in the same person or entity, the equitable interest merges in the legal interest, on the footing that a person cannot be a trustee for himself’’.”

While arguably complex, the CGT consequences of the merger depend on whether the sole beneficiary was absolutely entitled at all relevant times. If the answer is yes, then there should be no CGT triggered.

Another example of this trust law rule is under the superannuation laws which prohibit self managed funds having a sole individual trustee and sole member.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the Church song ‘Destination’. Listen here:

When 2 become 1 - and then** some

Last week’s post considered the amalgamation of 2 testamentary trusts ‘post death’ and a Tax Office ruling.

Following that previous ruling there have been more detailed private binding rulings issued by the Tax Office, including Authorisation Number 1013038270642.

The ruling particularly focuses on arguably the leading decision in relation to testamentary trusts and excepted trust income, namely - In Re Trustee of the Estate of the Late AW Furse; A/C Jessica N Delaney and A/C Skye Nea Delaney) v the Commissioner of Taxation [1990] FCA 470 (Furse), which has featured in previous posts.

The ruling confirms that, in a sentence, Furse is authority for the conclusion that provided a testamentary trust meets the requirements of subsection 102AG(2) of the Tax Act (which sets out the requirements to access the concessional taxation regime), income from the trust will be excepted trust income regardless of what other factors are present.

In the ruling here, although one testamentary trust was intending to transfer assets to another, it was confirmed that there were no non-arm’s length dealings in relation to the derivation of trust income. This meant that the anti-avoidance provisions in subsection 102AG(3) would not apply.

In particular, subsection 102AG(3) limits access to the excepted trust income regime where the parties -

‘were not dealing with each other at arm's length in relation to the derivation, or in relation to the act or transaction, (such that) the excepted trust income is only so much (if any) of that income as would have been derived if they had been dealing with each other at arm's length in relation to the derivation, or in relation to the act or transaction.’

The further anti-avoidance provision under subsection 102AG(4) that operates to exclude assessable income derived by a trustee under or as a result of an agreement that was entered into or carried out by a person for the purpose of securing excepted trust income was also held to be irrelevant.

Although all income received from the ‘merged’ testamentary trust would be treated as excepted trust income, the Tax Office confirmed that there was no agreement entered into for the purpose of securing that assessable income as excepted trust income.

Rather it was agreed that the true purpose was to reduce administration and yearly compliance costs.

Furthermore it was noted that if the taxpayer did not enter into the arrangement of merging the two trusts, the trust income from both trusts would be excepted trust income in any event.

In other words, there was no additional tax benefit resulting from the merger, the only substantive benefit was the saving of administration and compliance costs.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** for the trainspotters, the title today is riffed from the J Mascis (of Dinosaur Jnr fame) song ‘And then’. Listen hear (sic):

When 2 trusts become 1**

Following last week’s post I was reminded of a further Tax Office private ruling that looked at the amalgamation of 2 testamentary trusts ‘post death’, namely ruling number 1012622867641.

Broadly the situation was as follows:

1. Two separate trusts were created for two minors using cash sourced from a superannuation death benefit paid when their parent passed away intestate.
2. Primarily to reduce the administration costs, the trustee wanted to merge the two trusts, with the entitlements of the beneficiaries’ in the new trust maintained.

The Tax Act creates access to ‘excepted trust income’ in a range of situations, including where:

‘… the assessable income of a trust estate…in relation to a beneficiary of the trust estate to the extent to which the amount…is derived by the trustee of the trust estate from the investment of any property transferred to the trustee for the benefit of the beneficiary… directly as the result of the death of a person and out of a provident, benefit, superannuation or retirement fund…’

Here the Tax Office confirmed that the combined trust could not change the status of the excepted trust income, primarily because it continued to satisfy the above quoted provisions.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** for the trainspotters, the title today is riffed from the Spice Girls song ‘2 become 1’. View hear (sic):

Avoiding complexities** with testamentary trusts (part II)

Last week’s post focused on a scenario where additional testamentary trusts can potentially be established unnecessarily, particularly where a couple passes away in close proximity to each other.

In this scenario, if each spouse has established a testamentary trust under their respective will, then it is likely one of the testamentary trusts will be commercially inappropriate.

If there is no power under the wills to effectively sidestep one of the trusts (as explored in last week’s post) there may still be the ability to ensure that all assets pass to a single testamentary trust.

An example in this regard is set out in the private ruling released by the Tax Office under authorisation No. 1012603789935.

In this ruling, where two testamentary trusts had been established in a scenario where only one was required, the Tax Office confirmed:

1. Due to the range of beneficiaries under the testamentary trusts and the powers given to the trustees, the assets of one trust could be, at trust law, distributed to the other.
2. While the distribution of assets from the first testamentary trust to the second was a capital gains tax (CGT) event, no CGT was payable due to the longstanding administrative approach adopted under Law Administration Practice Statement PSLA 2003/12 (this statement is explained in more detail in a previous post).
3. Any income distributed from the continuing testamentary trust (even if it was derived from assets that had been distributed to the testamentary trust from the other estate) would be treated as excepted trust income (and in particular, allowing distributions to infant children to be taxed at the normal adult rates).

While the private ruling is obviously only binding on the Tax Office in relation to the particular taxpayer it was issued to, it does provide very useful insight as to the approach that is likely to be taken in similar scenarios.

This said, it is important to also consider the stamp duty consequences of any restructure as there is a significant risk that stamp duty may be payable, again as touched on in a previous post.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** for the trainspotters, the title today is riffed from the Smiths song ‘This charming man’. View hear (sic): 

Avoiding complexities** with testamentary trusts

One issue that potentially arises whenever spouses embark on an estate planning exercise is the prospect of there being testamentary trusts established unnecessarily.

In particular:

1. As there is never a way to know with certainty which spouse will die first, best practice dictates that each spouse establishes a testamentary trust under their respective will (assuming testamentary trusts are otherwise appropriate).
2. If one spouse dies, then often steps are taken by the surviving spouse to remove the testamentary trust from their will, and instead ensure that the remaining estate passes to the testamentary trust established under the deceased spouse’s will.
3. If however both spouses die in close proximity to each other, or alternatively, the surviving spouse fails to update their will, then two testamentary trusts are established (one under each estate).
4. In many cases, particularly where there are young children, the establishment of two testamentary trusts can be unnecessary and cause significant additional complexity and costs.
5. To help avoid this outcome, most specialist estate planning lawyers will ensure that they draft provisions into the wills to allow the legal personal representative of the estate of the second spouse to die to distribute assets directly to the testamentary trust established under the will of the first spouse to die.
6. Depending on the terms of the testamentary trusts, it may be possible to achieve the same outcome without the relevant clause and the post next week will explore a private ruling released by the Tax Office where such an outcome was able to be achieved without any taxation consequences.

** for the trainspotters, the title today is riffed from the Paul Weller song ‘Kosmos’. View hear (sic):

Don't know what you got 'til it's gone** - testamentary trusts and ETY

Thank you to all those who were part of our Estate Planning 2021 webinar this week.

A key question discussed related to the way in which the new restrictions on excepted trust income (ETY) via testamentary trusts operate.

In particular, in the context of a husband and wife preparing wills incorporating Testamentary Trusts, are there any tax consequences that flow from preparing the husband and wife’s wills to reflect that in the event the husband predeceases the wife (for example) the wife’s will provides that her assets will be gifted into the Testamentary Trust previously set up under the husband’s will.

Focusing solely on the ETY position, the new rules unfortunately make it clear that in this situation the income earned on the wife’s assets gifted to the husband’s Testamentary Trust will not give rise to ETY.

The reason for this is that the legislation mandates that the ‘property (must be) transferred to the trustee of the trust estate to benefit the beneficiary FROM THE ESTATE OF THE DECEASED PERSON concerned’ (emphasis added).

View made submissions on the draft legislation on this point (which were ignored ...) as follows:

‘The draft legislation is focused on “the deceased person concerned”, and it is unclear why this restriction is relevant.

For example, for most couples who both implement testamentary trusts, it will be the case that they will die at different times and there will often be a desire to transfer assets between testamentary trusts.

It is clearly the case that the excepted trust income rules should continue to apply in situations where a couple both implement testamentary trusts.

To argue otherwise would again see the proposed amendments extend significantly beyond the stated intent of the announced measure and impact taxpayers in a range of circumstances where there is no inappropriate tax benefit received by a beneficiary.’

** For the trainspotters, the title of today's post is riffed from the Joni Mitchell song ‘Big Yellow Taxi'.

View here: 

Just Can't Get Enough tax wins **

Last week's post explored the more concessional than previously expected approach to superannuation proceeds trusts (SPT) by the Tax Office (see - Don't Stop Believin' - Tax Office & superannuation proceeds trusts **).

In another, possibly related, Private Binding Ruling (see Authorisation Number 1051187537572) the Tax Office provides further clarity about how an SPT can ensure infant beneficiaries access excepted trust income. As usual if you would like a copy of the Private Ruling please contact me.

As mentioned last week, the Tax Office accepts that an SPT can still access excepted trust income where the relevant superannuation death benefit is not paid directly to the deceased member's estate, but instead to their surviving spouse.

Importantly however, as is the case with estate proceeds trusts (to learn more about this structure see our previous post here - Testamentary trusts - is it ever too late?), the amount of income that is excepted trust income is limited to the amount of income that would have flowed to the child from property that would have devolved on the child from the estate of the deceased person under the laws of intestacy (see section 102AG(7) of the Tax Act).

In other words, the Tax Office essentially treats the superannuation death benefit as if it formed part of the estate of the deceased person. This means that in states such as NSW and Victoria the strategy is likely to be unavailable for tax planning purposes given that in those states infant children are not entitled to anything on intestacy if there is a surviving spouse.  

In the Private Ruling the Tax Office also confirms that -

1. in order to access the excepted trust income regime, the infant beneficiary of the SPT must (pursuant to the terms of the trust deed) acquire the trust property (other than as a trustee) when the trust ends (as mandated by section 102AG(2A) of the Tax Act). 
2. excepted trust income is only available for the SPT to the level that would have been derived had the parties been dealing on an arm's length basis (see section 102AG(3) of the Tax Act). Importantly, this requirement is not that the parties themselves have to be arm's length; rather they must act on an arm's length basis. 
3. the income of an SPT will not be excepted income if it is derived, directly or indirectly, under or as a result of an agreement that was entered into or carried out for the purpose, or for purposes that included the purpose, of securing that the assessable income would be excepted trust income. However, if the purpose of deriving excepted trust income is no more than merely incidental, then the purpose is disregarded and the income may still be excepted (see sections 102AG(4) and (5) of the Tax Act). 

** For trainspotters, in 1981, when much of the original thinking around these rules was developed, the Depeche Mode song 'Just Can't Get Enough' was one of the hits of the year. Given the likelihood many readers of today's post were not born in 1981, further learning is available here - https://www.youtube.com/watch?v=_6FBfAQ-NDE

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Don't Stop Believin' - Tax Office & superannuation proceeds trusts **

Previous posts have explored various aspects of superannuation proceeds trusts (SPT).

View the earlier posts at the following links -

http://blog.viewlegal.com.au/2015/06/view-legal-and-superannuation-proceeds.html

http://blog.viewlegal.com.au/2014/09/what-are-superannuation-proceeds-trusts.html

As explained in these posts, historically there was a concern that the Tax Office may adopt a narrow interpretation of the tax legislation and mandate that the superannuation death benefits pass directly from a super fund to an SPT in order to access the excepted trust income concessions.

This was because, section 102AG(2)(c)(v) of the Tax Act allows infants to access excepted trust income where the transfer of funds to the SPT is 'directly as the result of the death of a person and out of a provident, benefit, superannuation or retirement fund'.

In Private Ruling Authorisation Number 1012994963374, the Tax Office confirms it will accept that property transferred to the benefit of a minor by the widow or widower sourced from superannuation moneys originally paid to the widow or widower (ie not to the SPT), will still fall within the requirements of the Tax Act (and in particular section 102AE(2)(c)(ii)). As usual if you would like a copy of the Private Ruling please contact me.

In support of this interpretation the Tax Office references comments in the Canberra Income Tax Circular Memorandum (CITCM) 884 published in 1981 to confirm its view that superannuation monies are to be treated as if they formed part of the estate of the deceased person, even if there is an ‘interposed step’ where the funds pass through the hands of a surviving spouse.

This means that the requirement set out in section 102AG(2)(d)(ii) of the Tax Act will be met and in turn the assessable income of the SPT will be excepted trust income. Section 102AG(2)(d)(ii) ensures access to excepted trust income where funds are transferred to the trustee for the benefit of the beneficiary by another person out of property that devolved upon that other person from the estate of a deceased person and was transferred within 3 years after the date of the death of the deceased person.

** For trainspotters, in 1981, when the CITCM referenced here was released, Journey's song Don't Stop Believin' was one of the hits of the year. Given the likelihood many readers of today's post were not born in 1981, further learning is available here - https://www.youtube.com/watch?v=2NQIPVqLMUg

Image courtesy of Shutterstock

Superannuation and skirting the shoals of bankruptcy **

The Federal Court's decision in Cunningham (Trustee) v Gapes (Bankrupt) [2017] FCA 787 (Federal Court, Collier J, 13 July 2017) (Cunningham) is vital guidance for all advisers in relation to the interplay between superannuation death benefits and the Bankruptcy Act 1966.

In particular, the case highlights the fact that a superannuation death benefit paid via a deceased estate to a bankrupt beneficiary is divisible amongst the creditors of the bankrupt.

At a minimum therefore, advisers should consider advising clients who have at risk potential beneficiaries to utilise a binding death benefit nomination (BDBN). The BDBN should mandate that any death benefit is paid directly from the superannuation fund to a beneficiary at risk of bankruptcy.

Testamentary trusts

One additional strategy that should be considered in the context of deceased estates generally, and specifically in relation to superannuation death benefits, is the use of comprehensive testamentary trusts.

As readers will be aware, 1 of the key reasons that testamentary trusts are often recommended is due to the asset protection offered by the structure generally, and in particular where a potential beneficiary is at risk of suffering an event of bankruptcy.

This approach can help protect beneficiaries, regardless of whether a BDBN is in place, or where a BDBN is implemented and mandates payment of the death benefits to the legal personal representative for distribution under the will.

Importantly, testamentary trusts also provide significant flexibility from a tax planning perspective, as compared to the benefits being paid directly to the bankrupt beneficiary. Previous posts have explored a number of the tax planning issues in relation to testamentary trusts (see for example Taxation consequences of testamentary trust distributions - Part I, Taxation consequences of testamentary trust distributions - Part II and Testamentary trusts and excepted trust income).

Unfortunately, we have seen a number of examples recently where no testamentary trust has been incorporated under a will, with superannuation death benefits passing directly to the estate and then in turn to a bankrupt beneficiary. In other words, creating the exact same factual matrix as existed in Cunningham.

Key issues to remember

In summary, the key issues to be aware of in this type of situation are as follows:

1. Where a beneficiary is bankrupt at the time of the death of the willmaker, the bankruptcy legislation mandates that the bankrupt's entitlements are to pass to their trustee in bankruptcy. 
2. If there are any assets remaining after the bankruptcy has been discharged, then the beneficiary is entitled to those assets. 
3. The right to due and proper administration of the deceased estate is an asset that forms part of the bankrupt's estate, and therefore also vests in the trustee in bankruptcy. 
4. If an executor of an estate seeks to avoid assets passing to a trustee in bankruptcy where a beneficiary is entitled personally under the will, the executor will themselves be personally liable. 

Importantly, each of the above issues can be legitimately avoided by the appropriate structuring of a testamentary trust into a will, prior to death.

Where testamentary trusts are not included under a will, best practice dictates that the executor should obtain a formal declaration from each beneficiary, before making distributions to them under the will, whereby each beneficiary confirms that they are in fact solvent.

If a beneficiary refuses to provide the declaration, then further searches should be made by the executor to minimise the prospect that the executor might become personally liable to a trustee in bankruptcy.

A case study example

One example of a factual scenario we have been recently asked to assist with that highlights the importance of advisers working collaboratively in this area to deliver value to clients is as follows:

1. An accountant had provided a written recommendation to a willmaker that testamentary trusts should be included in their will for asset protection purposes - this advice included a specific recommendation in relation to 1 beneficiary who had a history of financial misadventure in business activities. 
2. The advice was provided to the willmaker's long-standing, although unspecialised, lawyer who dismissed the recommendation for testamentary trusts on the basis that it was an 'unnecessary complication that accountants and financial planners push as part of their product sales'. 
3. At the time of the willmaker's death, the relevant son was indeed bankrupt. 
4. In working to discharge their duties, the executors of the will asked us to assist in obtaining probate of the will and also confirm that they were obliged to pay the bankrupt beneficiary's entitlements to the trustee in bankruptcy. We were able to obtain probate and also confirm the duty that the executor was obligated to pay to the trustee in bankruptcy. 
5. The executors also sought advice from specialist litigation lawyers as to whether the accountant or the lawyer could be potentially liable for failing to ensure that the willmaker included a testamentary trust in their will. 
6. The specialist litigation advice suggested that the prospects of recovering any damages were in fact quite low for the bankrupt beneficiary. 
7. The primary reason for this was that if a testamentary trust had been used, then the bankrupt beneficiary would have simply been 1 of many potential beneficiaries, and the only 'asset' that they would have received would have been the right to due administration of the testamentary trust. This right to due administration would arguably have no monetary value and therefore the damages awarded on suing the lawyer and accountant would have probably only been nominal. 

The above conclusion was not ultimately tested through the court system. It would therefore seem an unnecessarily risky approach for advisers to dismiss the benefits of testamentary trusts for bankrupt beneficiaries on the basis that they may not be liable if their advice is later shown to be inappropriate.

Conclusion

The need to take active steps to protect assets and wealth, as well as concerns with the overall effectiveness of the steps taken, are not new concerns.

Arguably however, those concerns have never been taken more seriously by a greater number of people than they are currently, particularly in relation to superannuation death benefits.

The recent case law in this area is a timely reminder of the need to ensure comprehensive asset protection strategies are implemented as part of an integrated tax and estate planning exercise.

As usual, if you would like copies of any of the cases mentioned in this post please contact me.

The above post is based on the article we had published in the Weekly Tax Bulletin.

** For trainspotters, ‘skirting the shoals of bankruptcy’ is a line from a song named ‘Accountancy Shanty’ by Monty Python from their 1983 movie ‘The Meaning of Life’, watch here – https://www.youtube.com/watch?v=7YUiBBltOg4

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