Review for Accountants & Financial Planners
April, 2017

Estate Planning and family trust assets...

Two minute scenarios...

When a client has a family trust, their estate planning sometimes needs some 'tweaking'.

Scenario One... Mark and Ellie

Scenario: Mark and Ellie had Wills done a while ago leaving their business to their daughter Zoe, and their home to their son Alex. The rest of the assets are to be split equally between Zoe and Alex.

What's the issue? The Wills are ineffective. The business is owned by their family trust, of which Mark is the appointor. They can't leave Zoe the business either through Mark's Will or Ellie's Will.

Solutions: Mark needs a new Will drafted nominating Zoe to take over the appointor role of the family trust. The family trust deed must allow for this to happen, and can be varied if necessary.

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Scenario Two... we want to leave an equal share

Scenario: There are other assets in the family trust in addition to the business.

What's the issue? If Mark gives Zoe control of the family trust through his Will, she will get control of all of the assets owned by the trust. Mark and Ellie want Alex to share in those assets.

Solutions: Mark can nominate Zoe and Alex as co-appointors of the family trust in his Will so that they take over control of it on Mark's death. Will that work?

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Scenario Three... specific assets

Scenario: Mark and Ellie want to ensure Zoe will get the business she has been working in for so many years, while also looking after Alex.

What's the issue? If the two children become co-appointors, that could mean Zoe ends up running a business half (effectively) controlled by her brother. That may not suit her.

Solutions: Mark could have a separate Option Deed prepared. The deed would specify that Zoe has an option to buy the business from the family trust upon Mark's death. The Will would be drafted such that the value of this would form part of Zoe's inheritance.

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More information for clients

Please feel free to forward this insight on Different Types of Wills to your clients. Or if they would like to discuss how we can help them please call 03 8621 9000 or email with their details and we will contact them, obligation free.

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