This presentation is designed to provide information of a general - PowerPoint PPT Presentation

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 TM Love Found - Estate Lost

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”. TM Love Found - Estate Lost

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? TM Love Found - Estate Lost

Case Study Case Study – – Two Two SINGLES SINGLES become one become one COUPLE COUPLE George & Mary George & Mary TM Love Found - Estate Lost

Case Study Case Study – – Two Two SINGLES SINGLES become one become one COUPLE COUPLE Individual Financial Details George (78) Mary (72) Item Assets Income Item Assets Income ------------------------------------------------------- ------------------------------------------------------- Home $575,000 - Home $750,000 - Contents $ 10,000 - Contents $ 10,000 - Car $ 20,000 - Car $ 40,000 - Bank A/cs Bank A/cs $ 60,000 $ 60,000 $ 2,400pa $ 2,400pa Bank A/cs Bank A/cs $200,000 $200,000 $ 9,000pa $ 9,000pa Shares $100,000 $ 5,000pa Shares $150,000 $ 7,500pa Tax Refund - $ 2,000pa Tax Refund - $ 3,200pa Alloc. pension $150,000 $ 9,000pa Age Pension - $12,000pa VicSuper pension - $20,000pa Age Pension - $13,800pa -------------------------------------------------------- -------------------------------------------------------- Total $915,000 $52,200pa Total $1,150,000 $31,700pa ------------------------------------------- ------------------------------------------- TM Love Found - Estate Lost

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. • 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. TM Love Found - Estate Lost

Case Study Case Study – – Two Two SINGLES SINGLES become one become one COUPLE COUPLE Combined Financial Details 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 Mary Bank A/cs Bank A/cs $195,000 $195,000 $ 8,775pa $ 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 TM --------------------------------------------------------------------------------------------- Love Found - Estate Lost

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. TM Love Found - Estate Lost

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. (ie Tailored to your individual circumstances). Any other agreed issues. • 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. TM Love Found - Estate Lost

Who can challenge your will ? Who can challenge your will ? In Victoria, it can include: • A surviving husband or wife. • A surviving domestic partner • 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. TM Love Found - Estate Lost

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 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 only and there was no provision for his stepchildren. A successful challenge was made by the stepchildren TM Love Found - Estate Lost

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. 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. TM Love Found - Estate Lost

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. TM Love Found - Estate Lost

Your Invitation ... To arrange an Initial Discussion with specialist retirement adviser ... adviser ... Robert Latimer ... call (03) 9814 9333 TM Love Found - Estate Lost