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This presentation is designed to provide information of a general nature only and should not be taken as advice or a recommendation. Whilst every care has been taken to ensure the accuracy of the enclosed information, no warranty of reliability or accuracy is given. Before making investment decisions we suggest you consult your financial planner or adviser.

Second marriages account for Second marriages account for nearly 20% of all marriages... nearly 20% of all marriages... ... and 60% of divorces ... and 60% of divorces – – twice twice the rate of first marriages the rate of first marriages

Love Found - Estate Lost

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New relationships ... New relationships ...

• Can provide new energy and a

greater sense of purpose.

• Re-awaken our emotional side.
• But there’s a risk that … “love is blind”.
• And we often avoid, defer, or ignore

the tough, “hard to talk about” issues. the tough, “hard to talk about” issues.

• We often say nothing for fear of “rocking the boat”.
• Must recognise that each person brings a different history and

background to the new relationship.

• Remember the “Iceberg Principle” – there’s more to each of us

that what you see.

• While the heart’s in “gear”, the brain can be

in “neutral”.

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Religion, politics ... Religion, politics ... and money and money

QUESTIONS TO CONSIDER …

• We’ve agreed to keep our finances separate, isn’t that enough?
• Do I need to re-do my will?
• How will my Age Pension be affected?
• Doesn’t a “pre-nuptual agreement” show a lack of trust?
• And isn’t it just for the rich and famous?
• I don’t want MY estate going to HIS children.
• Where do we live? His place, her place, or someplace else?
• Do we really need to get married?

Love Found - Estate Lost

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Case Study Case Study –

– Two

Two SINGLES SINGLES become one become one COUPLE COUPLE

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George & Mary George & Mary

Case Study Case Study – – Two

Two SINGLES SINGLES become one become one COUPLE COUPLE

George (78)

Item Assets Income

• Home

$575,000

• Contents

$ 10,000

• Car

$ 20,000

• Bank A/cs

$ 60,000 $ 2,400pa

Mary (72)

Item Assets Income

• Home

$750,000

• Contents

$ 10,000

• Car

$ 40,000

• Bank A/cs

$200,000 $ 9,000pa

Individual Financial Details

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Bank A/cs $ 60,000 $ 2,400pa Shares $100,000 $ 5,000pa Tax Refund

• $ 2,000pa
• Alloc. pension

$150,000 $ 9,000pa VicSuper pension

• $20,000pa

Age Pension

• $13,800pa
• Total

$915,000 $52,200pa

• Bank A/cs

$200,000 $ 9,000pa Shares $150,000 $ 7,500pa Tax Refund

• $ 3,200pa

Age Pension

• $12,000pa
• Total

$1,150,000 $31,700pa

Case Study Case Study – – Two

Two SINGLES SINGLES become one become one COUPLE COUPLE Issues & Agreement – George & Mary …

• Agree to live in Mary’s home & rent out George’s home.
• All ongoing, joint living expenses to be shared 50/50, with a joint bank

account being opened, initially with $10,000 (ie $5,000 each) to pay expenses.

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• Joint bank account to be topped up on a 50/50 basis as required.
• Both George and Mary will lose the Age Pension, with George paying

$12,000pa to Mary (from his rental income) as an “income adjustment”.

• Enter into a Binding Financial Agreement & re-do their wills.

Case Study Case Study – – Two

Two SINGLES SINGLES become one become one COUPLE COUPLE

Item Assets Income ($pa)

• Home (Mary)

$750,000

• Contents (Joint)

$ 15,000

• Car (Mary)

$ 40,000

• Car (George)

$ 20,000

• Joint

Joint Bank A/c $ 10,000 $ 0pa Mary Bank A/cs $195,000 $ 8,775pa

Combined Financial Details

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Mary Bank A/cs $195,000 $ 8,775pa Shares $150,000 $ 7,500pa Tax Refund

• $ 3,200pa

Age Pension

• $ 0pa

$19,475pa George Rental Property $575,000 $17,000pa Bank A/cs $ 55,000 $ 2,200pa Shares $100,000 $ 5,000pa Tax Refund

• $ 2,000pa
• Alloc. pension

$150,000 $ 9,000pa VicSuper pension

• $20,000pa

Age Pension

• $ 0pa

$55,200pa

• Joint Total

$2,060,000 $74,675pa

Binding Financial Agreement (BFA) Binding Financial Agreement (BFA)

• Don’t you trust me ?
• We love each other, isn’t that enough?
• Re-marriage revokes your previous will.
• Some relationships are one-sided and

manipulative. manipulative.

• A conversation about money, with a

view to entering into a Binding Financial Agreement, is actually a sign of a mature, open relationship, NOT a lack of trust.

• A Binding Financial Agreement puts your mind at rest, freeing

you up to then enjoy your new relationship.

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What does it do? What does it do?

• Specifies how property and financial

resources will be arranged should you separate.

• States the assets and financial resources

each partner brings to the marriage or relationship. Any other agreed issues.

• Any other agreed issues. (ie Tailored to your individual circumstances).
• Only legally enforceable if each party to the agreement gets

independent legal advice.

• Agreement should be “reasonable” and take into

account the possibility of changing circumstances.

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Who can challenge your will ? Who can challenge your will ?

In Victoria, it can include:

• A surviving husband or wife.
• A surviving domestic partner

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• Children of the deceased (and in some cases, step-children

and grandchildren).

• Other people who were dependent on the deceased.
• Those who the deceased was dependent upon.

Case Study Case Study -

• Example 1

Example 1

A couple, each married for the second time with adult children from the prior marriage. They made identical Wills leaving all of their assets to the other and if the other did not survive, then 50 percent to husband's children and 50 percent to

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survive, then 50 percent to husband's children and 50 percent to wife's children. The wife died and her whole estate went to her husband. The husband made a new Will leaving all his estate to his children

• nly and there was no provision for his stepchildren.

A successful challenge was made by the stepchildren

Case Study Case Study – – Example 2 Example 2

During the five months before he died, Michael was seriously ill. Specifically, he suffered from brain tumours, was partially paralysed and had difficulty communicating and speaking.

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and speaking. When Michael died, his children were shocked to discover that he had signed three separate wills during this time. His last will left the bulk of his estate to his new wife of only six months and only a small amount to his children. A successful challenge was made to the will but again, expensive legal fees were incurred.

Steps Involved ...

• 1. Initial Discussion (1 hour, No Cost)
• 2. Financial Strategy Report.
• 3. Joint meeting with solicitor.
• 4. Preparation of tailored Binding Financial Agreement

by a solicitor specialising in this field.

• 5. Separate legal advice required before signing.

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Your Invitation ...

To arrange an Initial Discussion with specialist retirement adviser ... adviser ...

Robert Latimer

... call (03) 9814 9333

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