Where there's a Will...

Wills have serious shortcomings...

Issues & Shortcomings with Conventional Wills

•  Wills meet short-term Estate distribution objectives - Executors must distribute assets immediately & fully, but:
•  Wills cannot achieve lasting & inter-generational arrangements without setting up Testamentary Trusts
•  Big risk if relying on your Children to maintain provisions & wealth for your next generation(s)
•  Wills do not easily cater for blended family arrangements
• Wills require Probate (prove validity) – cost, time & process 
• Wills (via Probate) are in the Public Domain & so no “secret” bequests
• Wills can be challenged by disgruntled beneficiaries and others

Bond bypasses Will

Binding and Tax-effective Nominations

•  Multiple Nominees (Vary amounts?)
• Nominees can be anyone
• Survivorship
• Down-the-Line
• Partial Nomination
• Flexible - Change or Revoke

Charities or Non Relatives

• Contested 
• Courts find for family first
• Use bond nomination
• Direct to charity or indvidual 
• Tax Deduction for charitable bequests

Case Study 

• Steve & Sarah are on second marriages and have 2 young children. 
• Steve has another child, 10 year old Kate living with his former partner
• Steve & Sarah use mutual Wills to provide for each other & for their two children.
• Separately a $100k Imputation Bond is set up as a tax-effective investment destined for Kate. 
• The Bond’s proceeds will pass directly (outside of Steve’s Estate) and as a Tax-Free distribution to Kate in the event of Steve’s death. (Also Steve has flexibility beforehand to draw against it for her education & maintenance).

Important Note: This article contains factual information and is not intended to constitute financial product advice or imply any recommendation or opinion about Imputation Bonds (IBs).  Austock Life Limited AFSL 225408 ABN 68 092 843 902 is the issuer of IBs. In deciding to acquire or to hold an IB you should obtain the relevant Product Disclosure Statement and consider its content.