Advanced Estate Planning: Financial Advice and Recommendation Report

This report provides comprehensive estate planning advice for Nathan and Rebecca Wallace, focusing on securing their family's future and managing their assets effectively. The report analyzes their current financial situation, including their ages, children, and existing assets like a salon business, bank accounts, an investment property, and a family trust. Recommendations include selling the salon, using proceeds to pay off the mortgage, and investing in superannuation funds to maximize retirement savings. The report also addresses asset management, tax implications, and the importance of wills. It includes detailed financial projections and considers the non-concessional cap limits for superannuation contributions. The advisor suggests strategies to optimize their financial position and provides a framework for fee structure, ensuring the couple's financial security and effective estate planning.

Running head: ADVANCED ESTATE PLANNING
Advanced Estate Planning
Name of the Student:
Name of the University:
Author’s Note:

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Letter of Advice
Nathan and Rebecca Wallace
Address line 1
Address line 2
Date
Dear Nathan and Rebecca
I would like to extend my greetings to you Nathan and Rebecca and I am thankful to you
that you have considered our services for advising you for your planning process. Our meeting
which was conducted last week was fruitful as I got an insight on the facts of your case, your
current situation, goals and objectives. Such information would provide great assistance in
planning for your estate and the proceeds which you will be deriving from the estate. I would
also like to know whether you have filled the questionnaire which I provided last week as the
same would provide further information regarding your current scenario and also assist me in
providing appropriate recommendations to you. The different questions which are included in the
Questionnaire is aimed to reveal wide range of information regarding you guys. Therefore, it
very imperative that you effectively provide all relevant information for your case.
This letter of advice would be including certain suggestions which would be focusing on
the goals and objectives which you have stated in the fact sheet. In addition to this, the letter
would also include financial projections which would provide you a better understanding of the
financial implications of the advice. Please take your time to read this letter of recommendation
and supporting material carefully to ensure the details are correct and every aspect is considered.
If any details are incorrect or have been omitted, please bring them to our attention prior to our
next appointment. I would also like bring about your attention that this letter would also include
a structure for our fees and commission which should also be considered by you.

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Role of Advisor
I am aware that you are planning to formulate an appropriate plan for your estate. In
addition to this, I also understand that you would be requiring tax implications and different
financial implications regarding the recommendation which is suggested by me. I also would be
informing you that I have appropriate licensing and knowledge of different regulations and
market conditions to appropriately give advice to you guys. In addition to this, my role would be
to provide advise regarding the estate which you have inherited. I would also assure you that we
are registered and are qualified for providing such services and the registration is under
Government of Australia.
Scope of Advice
The advice which would be provided from our end would be focusing on the estate
planning and the same would be considering different types of assets which you possess for the
assessment. From what I am able to understand, the primary goal behind the estate planning is to
effectively secure your family’s future and ensure that the needs of the family is taken care of
effectively. I would be explaining detail implications of the financial aspects of my advice and
how the same would have an impact on you and your plans. In addition to this, I would also
highlight certain limitations which might be associated to the advice provided. It is to be noted
that I would also suggesting alternative actions which can be taken by you. In addition to this, I
would also be highlighting tax implications and other financial implications of the products
which I would be recommended. It is to be also noted that our services would be limited to
advising for estate planning purposes and any activity which is not considered within the aspect
of estate planning would be out of scope of our services.
Current Situation
As per your current scenario, both of you are of 65 years of age and have been together
for last 37 years. The fact sheet also states that you have three children and all of them are
established. In addition to this, you also have two grandchildren who will also be considered in
the planning process. It is also clear that both of you want to retire but need an effective estate
plan which can meet your future needs and help in securing both yours and your children’s
futures. On the basis of the financial information regarding both you are provided shows that

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both of you handled your own business or profession. The letter of recommendation is
formulated in such manner that it considers your current situation while at the same time
considers your future needs in order to effectively formulate strategies which can support their
future needs effectively.
As per the information provided, Rebecca, you operated a hair saloon business and the
business was entirely run by you making you the sole proprietor of the business. The salon is in
North Coogee which you are planning to sell off to one of your clients and retire from the
business entirely. The business of the salon is taken on lease along with the equipment used in
the salon and you intend to sell the same to your client. On the other hand, Nathan, you operate
as a boiler-maker and you also operate as a sole proprietor and contracts companies for providing
your services. As per your information, Nathan you have an average net income of $ 120,000
after considering all the expenses in a year. In addition to this, there are other assets which you
hold and the same will also be considered as a part of your estate and therefore would be
included in the planning process. As per information provided by you, you have bank account
which has a value of $ 150,000 and also have ownership of an investment property which is
valued at $ 1 million. In addition to this, you have a trust established in the name of Wallace
Family which is done in order support the future needs of the family. The value of the trust is
estimated to be $ 2.5 million considering the portfolio of shares and properties which is included
in the trust. Moreover, Nathan and Rebecca both of you also have insurance policies in your
name and one in the name of each of your children. The fact sheet further states that both of you
do not have a will as of yet a you have not considered the same. These are the basic information
which is available to me regarding your current scenario and it is to be noted that the advices
which I would be providing would be based on this information. However, I would give you an
option of making amendments in your plans if any changes take place in your scenario. In such a
case, we would fix a meeting and make the necessary revisions so that the plans are appropriate
to your needs effectively.
Recommendations
After considering all aspects of the case which is provided by you, I would be recommending
the following measures which you can take in terms of effective estate planning

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Recommendation 1
In case you Rebecca, you are intending to sell off your salon business which is leased and
along with the equipment of the salon. The proceeds which are acquired from such a sale would
be used for paying off the mortgage on the family home in Dalkeith which is of $ 300,000. The
remaining proceeds from the salon business can be invested. In such an aspect, I would
recommend that you invest the remaining of the funds in superannuation fund which can
effectively meet your retirement requirements. I am of the opinion that you settling the mortgage
on the family home by using the proceeds from the salon business is an appropriate move. The
surplus proceeds can be invested in a super fund which would effectively meet your future
requirements. As per the financial information which is provided by you, it is unclear whether
you have a coverage or not. However, in any case, I would be suggesting that you take a
coverage of superannuation for both you and Nathan. This would protect your interest and ensure
an appropriate standard of living in future. Alternatively, you also have an option of making
investments in bonds which can generate appropriate returns for you. In such a case, the major
consideration which needs to be considered is the taxation impact on the contributions. As per
the provisions and guidelines of Australian Tax Office (ATO), you can contribute up to a non-
concessional cap limit before the same becomes taxable. The non-concessional cap limit is set
for $ 180,000 as both of you are above the age of 65. I would be advising that you should invest
in a super fund which is of balanced nature so that all your needs can be managed effectively.
Now I would I advise that you invest the proceeds into an appropriate super fund and ensure that
your contribution does not exceed $ 180,000 which would then mean than no additional tax
needs to be paid. A sample projection of the contribution to the super fund case scenario is
shown below:
Application of Proceeds from Salon
Particulars Amount
Proceeds from Sale of Salon
$500,00
0
Less: Payment of Mortgage
-
$300,00
0
Sum Remaining
$200,00
0

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Less: Contribution in Super Fund 180,000
Tax Implications Nil
Surplus Funds $20,000
The above table effectively shows that Rebecca can effectively sell the salon and I have
estimated the amount of proceed to be $ 500,000 out of which $ 300,000 would be used to pay
off the mortgage loan of family home and the remaining of the funds can be used for investing in
super funds and the maximum contribution to non-concessional cap should be $ 180,000 so as to
ensure that there are no tax charges in extra contributions. The only limitation in this area which
I faced was regarding the estimation of salon value which you will be receiving. If the same was
provided to me, I would be able to forecast your position better and maybe it would have
changed my recommendation. In your case, Nathan, I would also suggest that you also take a
coverage for superannuation fund and you can actively provide a portion of your net income to
the fund as you are continuing with your profession and have no intention of retiring in the
meantime. The reason I am suggesting a super fund instead of an investment bond is mainly
because super funds often provide much more benefits such as health coverage and TPD
protections. Therefore, I am certain that super funds would effectively meet your needs. In
addition to this, contribution to super funds would also help in retirement planning process for
you guys and thereby also secure your future.
Recommendation 2
As per the information which is available to me regarding the different assets your joint
hold makes it a necessity that you need to appropriately manage the assets. Tax is a major
consideration in estate planning, and strong governance relating to the tax aspects of estate
administration can help manage the risks. The assets which are jointly or singly under your
possession forms an important part of the estate planning process and the same is always
considered before any recommendations can be suggested to the clients. Therefore, I have
considered all aspects where you can attract taxes as per the taxation rules. A projection of the
assets and liabilities of both Rebecca and Nathan is shown below:
Different Assets and Liabilities of Rebecca and Nathan
Asset Owner Value Liabilities Net value Notes

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Personal assets
Family home Joint NA $300,000.0
0 NA
Business Rebecc
a NA $ - NA
Personal assets total $ - $300,000.0
0 $ -
Investment assets – non-superannuation
Trust Joint $2,500,000.0
0 $ - $2,500,000.00
Bank account Joint $
150,000.00 $ - $
150,000.00
Investment assets total $2,650,000.0
0 $2,650,000.00
Net worth $2,650,000.0
0 $2,650,000.00
The above table shows the different assets and their respective liabilities for the family.
In this aspect, the information which you provided did not contain an appropriate value of the
family home for which you will be paying off the mortgage. In case these valuations were
provided appropriately then an accurate estimation of the net worth of the business can be
provided. The total assets which forms the estate would be attracting taxes and the same needs to
be incurred by couple. It is recommended that proper governance over the assets of the business
need to be established so that assets are managed properly. There is also an insurance coverage
which you have taken separately for yourself and also for your children. This should also be
considered in the planning process for asset management strategies. As per the facts sheet you
have taken an insurance coverage of $ 500,000 for each other while you have also taken
insurance policy for your children which is 1 million strips each. I have also considered these
aspects as insurance coverage provide tax deduction and therefore this would be reducing the
overall taxes which arises on the estate. Therefore, the only recommendation which I can suggest
in respect of assessment management is proper governance of the same.
Recommendation 3
The third recommendation which I would be suggesting is also regarding the assets
which are either singly owned or jointly owned.by you. The main purpose of the estate plan is to
act as a succession plan as well in case of any unforeseen circumstances takes place. Estate
planning may be considered as part of your overall succession plan and it considers important
aspects such as legal, taxes, financial; aspects of the clients. As per the information which is

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gathered from the fact sheet you have provided, both of you do not current have a will. I would
recommend that you formulate a will either jointly or singly so that the succession plan is smooth
for you. If you maintain a valid will than the assets can be easily distributed among your children
and grandchildren in an effective manner.
As per the regulations which are established in Australian Law, when a person dies who
has a legal will can nominate individuals who would inherit all the assets and estate of the
former. The assets are distributed according to the inheritance laws of the states and territories of
Australia. I would now explain the consequence if you do not produce a legal will and the same
would impact the entire family. There is a situation called intestacy which can cause imbalance
in distribution of the estate due to higher rates of tax payable by some beneficiaries. This is a
situation which can develop major conflicts in the family over the estate. However, the effect of
the taxes depends on the marginal tax rates which is applicable on the individuals. This situation
can be completely avoided if a proper and valid will is maintained from the first place. A proper
will would provide your children to make appropriate plans for managing the tax implications in
case of any unforeseen circumstances which can take place in future. In addition to this, if a
proper will is maintained by you guys then there would be no friction between the children in
relation to inheritance which they will be receiving from the estate. In addition to this,
introduction of a valid will would also secure the position of the children in terms of any
accidents takes place. The children would be inheriting the family home, trust which is under the
name of Wallace and also proceeds from superannuation funds which Rebecca and Nathan are
recommended to invest in. Therefore, I would recommend that you contact your lawyers and
formulate a proper will so that the succession can be done smoothly without any hassle.
Recommendation 4
In order to obtain full control over your estate I would like to provide Power of Attorney
to each other so that in the event of death of any one of you, the other gets control over the estate
and then can actively manage the estate and its assets. This is to be done by you so that it gives
control over the estate and also over the succession plan. In the event both of die, then I would
suggest that you give another family member power of Attorney so that the succession plan can
be undertaken in an effective manner.

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The above discussion and recommendations are all formulated considering the fact sheet
and other information which you provided to me. In case there is any other changes in the current
scenario which you have then the entire estate plan would change and the same would be
requiring revision. I want you to thoroughly go through the estate plan and this letter of
recommendation and in case of any clarification of amendments, we can set up a meeting to
discuss the issue and make the necessary changes in the plans.
I thank you for choosing to use our services and will contact you within the next two weeks to
answer any questions you may have.
I look forward to helping you to implement these strategies and being of continuing assistance.
Yours faithfully,