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Access appropriate tools for simple planning

Media Release
07 Dec 2016

While estate planning is increasingly necessary for most Australians, meeting those estate planning needs usually requires simple solutions, especially for older Australians, says Matt Walsh, General Manager Life and Super at Australian Unity.

“Estate planning can be a minefield, exposing older Australians to legal commitments they are unused to, or do not fully understand.

“The same people, however, also have concerns that the long term arrangements they want to put into place may not be carried out after they die.”

Mr Walsh used the example of grandparents who wish to bypass a generation and leave a bequest to grandchildren for when they are older.

“Setting up legal structures such as testamentary trusts and appointing Trustees can be confronting for many, even though they may be the best solution to achieve a complicated outcome for a complex blended family.

“If the requirements are straightforward, such as leaving a lump sum to infant grandchildren for when they reach maturity, simpler solutions such as investment bonds can be a much better approach.

“If they are in place while the grandparents are alive, they also have the benefit that they cannot be over-ruled by any subsequent challenges to a Will.”

Mr Walsh said that challenges to Wills are a major concern for older Australians and are an increasing reality.

“People who have accumulated wealth and have set ideas on what they want to happen to it, are understandably concerned when they read of Wills being overturned by challenges.

“A major benefit of investment bonds is that they can be taken out in the name of the benefactor with ownership being passed to a child on their death or when the child reaches a nominated age.

“Once an investment bond is set up it’s a fait accompli. In addition to offering a great deal of flexibility in estate planning, it offers tax advantages for the beneficiary.

“For the child, it’s a very tax effective way to be given capital which they cannot access until they are older, which is accumulating returns without the high rate of child tax coming into play on earnings within the bond, or affecting their personal tax when they start work.

“Additional contributions can also be made year by year on behalf of the beneficiary if an ongoing plan is set up.”

Mr Walsh said that Lifeplan investment bonds have all the advantages of a diversified “fund of funds” investment approach, with a wide range of investment strategies and products being offered within the investment bonds.

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Matt Walsh

General Manager - Life and Super

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Select Income FundAustralian Unity Property Fund

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