Have had wife and I's parents as trustees on our will but they're getting a little older now. We are thinking of changing it over to my wife's sister is she'd get the kids so may as we'll look after the money to. Just wondering what others do or would recommend. We have a lot of IPs and are strongly CF+ so it's a bit for them to look after, we have a lot of trust in her which helps!
Trustee for our Will
- Thread starter HeadsOnBeds
- Start date
First thing is to have a chat with your sister-in-law and ensure that she is happy to take on the role of executor and guardian. With the financial issues, legal obligations of an executor, and kids to look after it is quite a big ask so make sure she is happy with it all.
Marg
You should consider a back up executor and trustee - not the same roles. You may also want to consider a trustee company.
Don't forget to take into acccount the loans on the properties either. Under the conveyancing act the loans are to be repaid out of the property that secures it not where the funds where used - unless the will specifies otherwise.
Don't forget to take into acccount the loans on the properties either. Under the conveyancing act the loans are to be repaid out of the property that secures it not where the funds where used - unless the will specifies otherwise.
Thanks all, some stuff to think about there. In A similar morbid train of thought what do the banks do with my loans for IPs if I pass away? All held in family trusts and cf+. I'm the only guarantor. Will my wife need to re apply?
Death would probably be a breach of the land agreement. Change of trustee will require new loans anyway, if a company then change of directorship would trigger new loan applications. If your wife cannot service the loans might have to be repaid.
Co executors can be a good strategy ie lawyer + sister. Sometimes two siblings. Othertimes NOT as they might never agree with each other. They supervise each other but must be capable of mutual co-operation or it can become a mess. Must make mutual decisions so a deadlock can be difficult. Some solicitors will err for the client view and others may not. A recent client had a co-executor solicitor whose views of the estate differed wildly from the clients. Lawyer wanted to trigger a massive CGT problem and client didnt. He woundnt budge. Very difficult to have him replaced as the will was well written to include him (guess who wrote the will?)
Another client had a solicitor appointed. Unfortunate she had NO IDEA of the tax issues and then distributed trust incorrectly. All cash to one beneficiary and all shares to another without any allowance for the accrued CGT liability at the date of death. Her first trust estate ! A PI claim in the making ! This demonstrates that sometimes a will should also contain clauses which impose obligations to use the deceased's trusted tax and legal advisers. Just because someone is dead doesnt mean that tax planning doesnt work. The haste to wind up a estate by an inexperienced executor can create a tax problem.
Another client had a solicitor appointed. Unfortunate she had NO IDEA of the tax issues and then distributed trust incorrectly. All cash to one beneficiary and all shares to another without any allowance for the accrued CGT liability at the date of death. Her first trust estate ! A PI claim in the making ! This demonstrates that sometimes a will should also contain clauses which impose obligations to use the deceased's trusted tax and legal advisers. Just because someone is dead doesnt mean that tax planning doesnt work. The haste to wind up a estate by an inexperienced executor can create a tax problem.
An example of where death benefit insurance that as a minimum covers all loan payout value is a wise strategy.
In the wills I draft I have a clause urging the executors to get legal, taxation and financial advice. You could require this - but what if they went to HR Block. You could name an advisor - but what if they die before the testator or retire, move firms etc.
I also include an equalisation clause giving the executors the power to take into account non estate assets such as super which may not form part of the estate.
I also include an equalisation clause giving the executors the power to take into account non estate assets such as super which may not form part of the estate.
Thanks guys this is great info. I'm sorting out the life insurance all ready, any tips there? Covering all of the loan payouts might get a little much on the premium side!
If I include my solicitor as a co-trustee what do they charge, does it just become an hourly rate sort of deal?
If I include my solicitor as a co-trustee what do they charge, does it just become an hourly rate sort of deal?
Consider where the life insurance should be paid - if it forms part of the estate then the will is challenged it could be at risk. If in super then it may form part of the death benefits so you should consider a BDBN. Also consider the tax side as income from life insurance could be taxed in the hands of children at adult rates -s102AG ITAA36
