Activity 1
Jack and Jill are married old age pensioners. They have investment assets worth $240,000 and they own their home. Jill dies. Her will leaves her share of the investment assets to Jack. What estate planning issues should the couple have considered prior to Jill’s death?
(Describe a range of client needs and circumstances relevant to estate planning).
Activity 2
a) In what circumstances can it be claimed that a will is invalid?
b) What happens if a court finds that a will is invalid?
(Explain key legislation and regulation requirements relating to : wills; intestacies; attorney ships or guardianships; probate and administration; trusteeships including investment and obligations of the trustees; investment of trust assets; taxation and tax obligations as they relate to the administration of trust).
Activity 3
Explain why the policies and procedures of a financial planning practice should require financial planners to maintain regular communication with clients for whom the practice has provided estate planning advice. (Describe organisational policies and procedures required when providing and documenting estate planning advice).
Activity 4
Describe some of the things a financial planner would normally consider when it comes to client dispute resolution.
(Describe the internal and external complaints resolution procedure).
Activity 5
Typically, there are four ‘estate events’. These are: Temporary disability; Permanent disability; Terminal illness; and Death.
An estate planning service offered by many personal trustee organisations is the provision of a vault service to enable their clients to store certified copies of important documents.
Outline the sort of documents that might be stored in such a vault in anticipation of the death of a family member.
(Outline estate planning products and services offered by personal trustees organisation and the fees & charges that apply).
Activity 6
Consider the example of a couple with a child who has an intellectual disability. They naturally worry what will happen to the child after their death. One of the ways to deal with the child’s financial security is to set up a testamentary trust. In this way the testator (the person making the will) can direct how the assets will be used after their death.
When considering who should be the trustee, the parents have the choice of appointing an individual known to them or a private trustee company.
Outline the advantages and disadvantages of each option.
(Outline the role, responsibilities and authority of the senior personal trust officer including: management and supervision responsibilities; organisational expectations; limitation of personal authority in giving investment advice).
Activity 7
Many professional codes of conduct relating to estate trustees cover standards of conduct. Discuss the standard ‘diligence in public administration’.
(Discuss the professional code of conduct, where applicable, in the personal trustee sector).
Activity 8
Janet was aged 17 when she was involved in a serious road accident as a passenger in a vehicle. As a result of the accident Janet suffered significant physical injuries along with a traumatic brain injury. These injuries have had serious impacts on all aspects of her life.
Janet has been through extensive rehabilitation over the six years since the accident and has progressed well in recovering from her injuries. However, residual mental and physical disabilities will have an impact on her for the rest of her life.
Janet was awarded substantial compensation amounting to $2.5 million for the injuries she received in the car accident. Janet and her family were concerned about her managing the large amount of money she received, and especially about her being financially abused (for example, being encouraged by other people to buy large items for them).
Discuss how Janet might be assisted by a personal trustee.
(Describe the role of, and how and when to contact, key internal and external specialists relating to the personal trustee sector).
Assessment -2 (Case Study)
Q-1
a) What issues arise when Ian dies in 2008 and the value of the property is assessed at $345,000?
b) Did the creation of the life interest defeat the potential inheritance claim of X?
Q-2 Was there a better way to achieve Ian’s estate plan wishes?
Assessment -3 (Communication Skills Assessment)
Consider the reading of a will. A common question asked in estate planning is whether the Executor of an estate has a duty to hold a “reading of the Will” where the deceased’s family and friends are gathered together and the deceased’s Will is then read aloud. Although scenes such as these are played out in numerous American movies, there is no requirement to have a reading of the Will in Australia.
Now consider this scenario:
Maria passed away at age 93. She was survived by three daughters, 14 grandchildren, and 23 greatgrandchildren. Her eldest daughter pre-deceased her and left Maria five grandchildren and seven great-grandchildren. Maria’s estate plan, which was created before her eldest daughter passed away, indicated that she wanted her estate to pass to her surviving daughters. While it is likely she had a rationale for doing this instead of a per stirpes distribution (equal share) where one-fourth of her estate would have passed down to the descendants of her pre-deceased daughter, she never shared this plan with her family.
When her estate plan was made known after her passing, a family fight ensued. Several of the grandchildren of her deceased daughter accused two of Maria’s surviving daughters of manipulating Maria to cut out their branch of the family tree.
Despite being a historically close family, Maria’s family fractured and many of her descendants have stopped speaking to each other.
This is not an uncommon situation.
Now consider the communication issues related to the scenario.
Describe some ways that better communication could have averted the outcome of the scenario.