Were it not for niche, in-house skills, Charles’ beneficiaries would have had to hand over a substantial amount of tax.
In life, Charles* was the epitome of financial success. The astute businessman with a strong mind, independent nature – even in his elderly years – and poised financial acumen amassed an estate in excess of $20 million throughout his 100-year-long life.
So it goes without saying that, when he died, the administration of Charles’ estate was never going to be a simple task.
Equity Trustees National Manager, Teghan Rawson, says that Charles was acutely aware of what could happento his financial legacy if he didn’t seek expert estate assistance from an established company like Equity Trustees before he died.
“Initially, during his later years, we provided Charles with a ‘total care’ service, assisting him with paying bills, collecting rent and managing relationships with property managers,” Teghan says. “Later, on his death, we acted as executor of his estate. He left specific wishes relating to his funeral, which we carefully carried out on his behalf.”
Charles also left behind 13 investment properties and a large share portfolio. There were over 50 beneficiaries listed in Charles’ will, including a mixture of charities and individuals.
“The way in which an executor manages estate assets can impact the amount of tax payable. One wrong move in terms of an early distribution or not correctly isolating particular assets can result in taxation consequences that either the beneficiaries or the estate could be liable for.
“Given that there were multiple categories of beneficiaries for taxation purposes and a high level of income being received by the estate, careful planning was required by our specialist in-house tax team to maximise the benefit for each beneficiary.”
When a person dies and leaves assets such as shares or managed funds to a foreign resident (or beneficiary that is an exempt entity (non DGR-charity) it triggers a CGT event K3.
This regulation is aimed at preventing assets with embedded capital gains escaping the taxation system. A professional firm such as Equity Trustees can help implement strategies designed to manage potential tax liability such as carrying forward any unused capital losses at the date of death.
There’s a real benefit of appointing an executor that is going to be around in perpetuity to make sure your funeral, financial needs and other matters are conducted in the way you intend them to be conducted.
With no immediate family around to ensure his wishes were carried out, if Charles’ didn’t have a company like Equity Trustees acting on his behalf, his funeral may not have been everything he had wanted; his large estate may not have been carefully managed; and the beneficiaries of his will may have needlessly lost thousands of dollars in the form of a large tax bill.
Equity Trustees are also independent and not a beneficiary of the estate. “Our priority is the client. We have no other interests. We simply act to make sure that a person’s wishes are carried out in the way they intended.
“In life, Charles had peace of mind knowing that he had an experienced, independent trustee company working for him, with the in-house expertise in tax to ensure that his final wishes were carried out after he died.”
*Name changed to protect privacy