Intergenerational Wealth Transfer Case Study of Curve Clients who recently met with us

Intergenerational Wealth Transfer Case Study of Curve Clients who recently met with us

Mary and Bob have worked hard all their lives. They have been successful in their chosen careers and, after raising their three children, they are now winding back their working hours and looking forward to retirement. One of their kids is already married with a child and another on the way. A second child looks like they might be heading towards marriage and their third child, who has always been the wild one, has been traveling the world for the past two years seeking all sorts of adventure.

Mary and Bob have seen a Financial Adviser in the past but have not done so recently. Their wills were last updated about ten years ago when all three children lived at home and attended secondary school.

Given their modest living expenses and their large asset base, it is likely their children will inherit a substantial estate.

Mary’s mother is in her 90’s and, as one of two children, Mary will share in her mother’s estate which consists of the family home and a substantial share portfolio her late father built up over many years, equal in value to the family home. The family refer to it as Pa’s money and are so proud of what he did as it has provided the income to place Mary’s mother in a lovely care facility where she has been very happy for the past four years.

Bob’s mother passed away seven years ago and he inherited money from the sale of her home. Bob has always wanted to honor this gift by using it to help his children buy their own homes, which he knows their grandmother would love the thought of. Bob has this money in a separate bank account and is not exactly sure how it should be gifted when the time comes.

Their current wishes are that their three children benefit equally from their estate and any grandchildren benefit also. Mary in particular is adamant that they will fund their grandchildren’s private school fees and wonders how she can rest assured money will be available in the future to do this if, by that time, she and Bob have both passed away.

As a child Bob experienced the breakdown of his parents’ marriage which was bitter. He knows that 30% of all marriages in Australia end in divorce and is concerned that if one or more of his children’s marriages fail after they have inherited their estate, then the wealth they have left their children may be at risk.

Meeting with Curve Wealth

We met with Mary and Bob and discussed their goals and objectives with them. We also explored their concerns and wishes around the treatment of their estate.
We are putting together a strategy for them which covers:

Reviewing their superannuation funds and advising them how to structure their pension income stream to cover living expenses and ensuring they do not exceed the balance caps.

Utilising a family trust and an investment company to hold wealth outside of superannuation as an intergenerational family wealth vehicle. This structure is tax efficient, provides the flexibility to support individual family members if required and provides a greater degree of protection to the wealth of the family bloodline in the event of a divorce.

In conjunction with the family lawyer, reviewing the estate planning of Mary and Bob, including the inclusion of a testamentary trust.

The objective of the plan is to provide a plan for Mary and Bob to fund a happy and fulfilling retirement, set up an enduring legacy for their children and grandchildren which honor’s the sacrifices Mary, Bob and their parents made for the family and protects it for the future.

Contact us at Curve Wealth if you would like to know more. You can call us on 03 9588 9000 or email us at [email protected]

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