Family Wealth Structure

Discussion in 'Wills & Estate Planning' started by Mill, 29th Mar, 2020.

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  1. Mill

    Mill Well-Known Member

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    Hi All,

    I am looking into what structures might be best appropriate to hold family wealth for generations.

    Discretionary trusts have a lot of good features including CGT discount, income distribution flexibility etc but vesting after 80 years kind of defeats the aim of holding assets for generations.

    The company structure would suit the longevity however you lose the CGT discount. Maybe that isn't a big deal for holding mostly dividend stocks. I kind of see it as setting up a private investment company (ie non-listed LIC)

    Currently I'm looking at a "HOLDING COMPANY PTY LTD" that owns ASX listed shares. Mostly reinvests dividends while accumulating then pays me distribution during retirement.
    A DFT "FAMILY WEALTH" owns the shares of HOLDING COMPANY. But this still presents issue of the DFT vesting.

    The idea would be to pass on the control of a trust/company to my future children. Have some kind of rules that only allow small % of income to be distributed, no selling shares, small % of income given to charity.

    I'd hate to spend my life acquiring all these assets, then on my death it is all sold and distributed. I'd like to leave a legacy to look after my family and donate to charities/community.

    Any thoughts?
     
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    There are many different ways such a thing could be structured.
    Own name and then a Testamentary Discretionary Trust (TDT) in the will
    DT hold shares with dividends to a bucket company with shares in own name and shares left to TDT
    - as above but shares of bucket company held by TDT
    - SA DT
    - Company with shares held by yourself and willed to TDT
    - DT which vests upon your death and then into your estate and TDT

    plus many more.

    You need to consider taxation aspects as well as the estate planning and control.
     
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  3. newfound

    newfound Member

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    Just curious -- what is "SA DT"? Discretionary trust set-up in South Australia?
     
  4. Trainee

    Trainee Well-Known Member

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    Terry, is there legislation or case law on SA DT?
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    More complex than that
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Legislation
     
  7. Trainee

    Trainee Well-Known Member

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    Do you have a link to the specific legislation and section?
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Off the top of my head it's in the property act
     
  9. thu555

    thu555 Well-Known Member

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    I believe discretionary trust in SA is not bounded by the 80 years like discretionary trusts in other states. Is that right?
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Not really.