Empowering Family Legacies

Executive Summary

HK Partners successfully provided comprehensive estate planning services to a family with substantial assets, including a thriving private business and a diversified property portfolio.

Through extensive consultations, the family identified key goals, including appointing trusted executors and trustees, protecting the wealth they created, minimising taxation, and ensuring smooth succession to future generations. Additionally, the family wanted to be able to focus on their chosen careers while maintaining their harmonious family relationships.

Our approach included working with expert lawyers to ensure their Wills and associated estate planning documents met the family goals.

Ultimately, our involvement in the estate planning process enabled the family to achieve their goals and focus on their individual aspirations with confidence.

The family and their goals

The family ran an outstanding private business for over three decades and built a substantial investment portfolio of Sydney apartment blocks and commercial property investments.

After assisting the family with taxation and business planning advice for many years, we assisted with their estate planning in conjunction with specialist estate planning lawyers whom we introduced to the family.

HK Partners facilitated meetings with the parent’s and estate planning lawyers where the parents’ broad goals were discussed as were the various technical options available for the family within their estate plan.

Following those discussions, the parents identified key goals for their estate planning. They were:

• To appoint trusted independent people to be their executors and trustees to manage and grow their assets for the benefit of the family.

• To appoint family members who were in the best position to make lifestyle and health decisions for them in the event they were unable to do so in the future.

• As far as possible, ensure the intended family members were the ultimate beneficiaries of their estates.

• For their assets to be invested to grow over the decades ahead and provide a rising income stream to supplement individual family members employment or business income.

• Allow family members to borrow at interest from the estate to buy family homes.

• To legally minimise taxation and to protect the assets of the estate over the generations.

After providing for each other, the parents wanted future beneficiaries to be their children, grandchildren, and great grandchildren. They had worked hard to build up their assets and wanted them to remain in the family.

In particular, the parents wanted to limit the possibility of future creditors successfully claiming the family’s assets. This included future spouses following relationship breakdowns or future business creditors.

Importantly, enduring attorneys and enduring guardians were also to be appointed as part of the estate plan in case the father or mother were unable to make financial and lifestyle decisions for themselves. Our clients made it clear that, in these circumstances, they wanted to stay living in the family home as long as possible and not to be put into aged care.

Strategic, tailored estate planning

With these goals in mind, the estate plan included Wills drafted to provide their children and future generations with taxation advantages as well as asset protection advantages.

In this case, after due consideration, the parents felt that independent, professional attorney’s, executors and trustees, who were experienced businesspeople and investors were best placed to manage the family assets for the decades ahead. This included, one of the HK Partners Lead Advisers and one of the clients’ lawyers.

The parents felt that appointing, trusted independent advisors in these key roles meant that their children, who were not experienced in these areas, could focus on their chosen fields knowing that their assets were professionally managed.

Additionally, having independent advisors in these roles meant the responsibility for managing family assets, along with the associated pressures, were removed and the family could focus on being a family rather than worrying about investment, taxation and associated legal matters.

The parents ultimately believed this would help to create a more harmonious family environment and reduce the chance for disputes and bickering which they had read about in the press and heard about from their friends.

Lifestyle Decisions

In terms of who should make their lifestyle decisions, should the parents be unable to make them for themselves, they felt their children were best placed to make those decisions on their behalf. These decisions could involve where they live, what doctors they should see, who should provide their care and difficult decisions about their final stages of health care.

Navigating the clients’ circumstances

Unfortunately, the father passed away at a relatively early age because of an industrial illness and, some years later, the mother was diagnosed with dementia.

However, the difficult transition was made much easier having appointed enduring guardians to make lifestyle decisions on behalf of the mother, while the independent enduring attorneys, made the financial decisions.

The family guardians worked with the independent attorneys to arrange for professional 24-hour care at home and daily visits by the family physiotherapist to assist with exercise, maintaining balance and a good range of movement.

Additionally, groceries were purchased, the rates were paid, newspapers continued to be delivered and the gardens maintained.

Enduring Guardians and Attorneys

Had enduring guardians and attorneys’ not been appointed, the NSW Public Trustee may have been appointed to take care of the family finances including employing the outside assistance and paying the numerous bills associated with keeping the mother at home.

Additionally, the Public Guardian may have also been required to make lifestyle decisions about where the mother was to live, what doctors to see and even critical life ending decisions.

While public servants performing these roles undoubtedly do the best they can, they cannot be expected to adequately take the place of those people handpicked to take care of the person financially and personally. As a result, the easiest and most practical option for Public Trustees can be to put the person into an aged care facility – something the parents specifically wanted to avoid for as long as possible.

Successful Result

Involving HK Partners in the estate planning process has been a success for the client as they had their key goals met namely:

• Appointing trusted people to manage their assets and finances and make lifestyle decisions on their behalf when they became unable,

• Ensuring the intended family beneficiaries benefitted from assets they built up from hard work over many years,

• Protecting their assets from unforeseen creditors in the decades ahead,

• Minimising taxation, and

• Keeping the family together and allowing them to focus on their individual goals and aspirations knowing that their assets were being independently managed. Additionally, they had HK Partners available as a sounding board for their future personal financial decisions.

Conclusion

In conclusion, the partnership between HK Partners and our esteemed client exemplifies the significance of proactive estate planning and holistic financial services. By meticulously addressing the family's objectives and leveraging our expertise, we crafted a robust estate plan that safeguarded assets, minimised taxation, and prioritised family harmony.

The unfortunate events that followed— the father's premature passing and the mother's dementia—underscored the importance of prudent planning. Through the appointment of enduring guardians and attorneys, we ensured the mother's care and financial management aligned with her wishes, averting potential challenges associated with public trusteeship.

Our client's success story highlights the transformative impact of comprehensive estate planning and underscores the value of proactive financial guidance. Moving forward, HK Partners remains committed to supporting our clients' long-term financial well-being and empowering them to navigate life's uncertainties with confidence and peace of mind.